The Mortgage and Protection Event timings and locations:
3rd November – AJ Bell Stadium, Manchester
4th November – Cranmore Park, Birmingham
10th November – St Mary’s Stadium, Southampton
11th November – StoneX Stadium, London
Back as a face-to-face event for the first time since 2019 in Covid safe environments, we look forward to providing an opportunity for mortgage and protection advisers with the ambition to grow their business: to build market, product and provider knowledge; to deepen relationships with lenders, insurers, ancillaries and other advisers; to learn how to run a business better, and ultimately to increase both customer satisfaction and their bottom line.
Our programme includes a raft of richly educational sessions from the chairman’s address from Kevin Roberts, director at Legal & General Mortgage Club, at all four events about the economic overview – a look at the economy in general and the mortgage and housing markets in particular, with specific regional focus offered by Lee Hopley, director of economic insight and research at UK Finance.
The next session entitled Working together – improving broker/lender relationships and processes to deliver optimum customer outcomes will be led by
Jeremy Duncombe, managing director at Accord Mortgages, followed by a session on the ever-critical topic of remortgaging given the almost £40bn of potential term-ends in January 2022 with a protection angle offered by Andy Walton, protection proposition director at Mortgage Advice Bureau.
Neil Wyatt, sales director at Mortgage Brain, will be leading the next session called Driving efficiencies in a post-pandemic market outlining how using the correct integrated solutions in the right way can save you time and your business money and benefit your clients.
Finally, on the half-day conferences we offer our lender panel debates featuring Simon Cockerill, head of intermediary sales development at Precise Mortgages & InterBay Commercial, Jonathan Stinton, corporate relationship manager for Coventry for Intermediaries and two more big lenders to be confirmed closer to the time.
For more information or to register, click here.
According to data captured on Legal and General Mortgage Club’s SmartrCriteria platform, this was the second most sought after criteria during the month, rising from sixth place in August.
The most searched for criteria was mortgages for those with a visa.
Searches for borrowers with complex financial situations declined month-on-month in Q3. In August, the platform recorded a nine per cent decrease in demand for mortgages to suit those with debt management plans and an eight per cent drop for those with unsecured arrears.
Searches for borrowers with unsatisfied defaults and those employed via contract work also fell by nine per cent and eight per cent respectively.
In September, demand for products suited to borrowers with satisfied defaults and unsecured arrears fell by a further 10 per cent and seven per cent.
Kevin Roberts, director of Legal and General Mortgage Club, said: “It is reassuring to see a wide range of factors driving demand in the mortgage market, especially in light of the stamp duty holiday ending. However, the crisis has in many cases complicated applicants’ financial circumstances and advisers must keep this front of mind.
“Against this complex backdrop, the value of both mortgage advice and technology remains clear.”
Roberts said the use of technology would help brokers navigate the market and attend to client needs.
He added: “With purchase activity expected to return to its pre-pandemic level in the coming months, in light of the end of the stamp duty holiday, now is the time to invest in mortgage technology and prepare for this new and exciting era of the market.”
Speaking about what he described as “rainbow capitalism”, events consultant at Legal and General Richard Thomas, said it was becoming more obvious when companies used awareness events such as Pride to drive sales and customer engagement.
He said it could be seen as “brands jumping on the bandwagon of Pride” so they could “exploit it to sell their goods and services”.
Thomas added: “It’s really important that more brands understand that they can’t just be superficial. If you’re going to support this community, it needs to be more embedded in many different aspects of their corporate culture and their customer and employee engagement.
“If you’re going to be superficial, be expected to be caught out – particularly on social media.”
Steve Seal, chief executive of Bluestone Mortgages, said this also happened with other minority groups and issues.
He added: “We saw a similar kind of trend around the Black Lives Matter concept as well, didn’t we? Where businesses were embracing what I’d describe as ‘on trend messages’ to drive commercial value without being able to demonstrate that the core principles of what they’re trying to promote and advocate are actually embedded through their businesses.
“It’s purely a capitalist attitude to drive commercial value by using the brand, which is a terrible thing.”
Thomas said companies needed to engage with the lesbian, gay, bisexual, transgender, queer or questioning and plus (LGBTQ+) community consistently not just during particular events.
Being open at work
While Thomas and Seal both acknowledged that attitudes had changed towards their homosexuality over the years, they noted experiences where they felt that being gay had led to them feeling like they could not be themselves.
Seal admitted his experiences were likely more to do with his own reservations about society in general, saying he made sure to refer to his husband as “they” instead of “he” when meeting industry peers at events.
“I think it’s all about fear rather than reality. That’s a fear I had in myself. I’ve never ever found myself in an experience in the mortgage market where when I have been open with people, I faced any kind of challenge of issue in terms of lack of acceptance or being made to feel uncomfortable,” he added.
Thomas said at a previous job, being the only gay employee made him question if he was being excluded by his heterosexual male co-workers.
His colleagues would arrange to meet up with each other outside of working hours without inviting him. Those colleagues ended up forming closer relationships with each other than Thomas had with them.
“It was changing the dynamic in the workplace as a result,” he said.
Thomas also noticed that when another gay colleague joined the company, he also wasn’t asked to join in with outside work activities.
He added: “It was just the two of us who were left out. I don’t know if it was a conscious or an unconscious thing on the part of those guys and I would imagine it probably wasn’t [a conscious thing]. But nevertheless, it did make me feel marginalised. It did alter the team dynamic a bit because I’d come into work and feel like I was being made to feel othered from everybody else.”
While the behaviour did not affect Thomas’s career progression or performance, he said it affected his mental health. He also noted that straight men who later joined the company were invited to spend time with the group.
He added: “That felt very deliberate.”
Thomas said because the behaviour was not something obvious like physical abuse, he felt uncomfortable to confront colleagues about it.
He added: “It’s a very difficult, complex scenario to be in. Nowadays attitudes are changing so maybe I might feel a bit more inclined to discuss it with my line manager and some of the individuals on a very informal basis. Back then, I just let sleeping dogs lie and got on with it.”
Seal and Thomas also agreed that it was unnecessary for them to announce their sexuality to colleagues, with Seal saying the expectation to do so wound him up.
“If people find out I’m gay they say ‘why didn’t you tell me?’ and my response is ‘well you never told me you were straight’.
“There’s the expectation that because you’re gay, you have to tell people that you’re gay. Whereas I don’t see why, people don’t introduce themselves as straight so why do I have to introduce myself as gay? I’m just Steve,” he added.
This is according to data from the Department of Levelling up, Housing and Communities (DLUHC), formerly the Ministry of Housing, Communities and Local Government.
Due to restrictions imposed on the construction sector during the pandemic, the measures were up 167 per cent and 150 per cent respectively compared to last year.
The drop in starts is the first decrease since Q2 last year.
Completions are 10 per cent down on their peak in March 2021 and also the first decrease since Q2 last year.
Government target ‘out of reach’
Danny Belton, head of lender relationships at Legal & General Mortgage Club, said the housing market had been under “considerable strain” due to material and labour shortages which slowed the development of new homes.
He added: “This has put the government’s target of building 300,000 new homes each year yet further out of reach, but we must find solutions to solve the issue of housing undersupply. Its recent commitment to provide £8.6bn in funding for affordable housing will undoubtedly help, but other solutions are also needed.
“If homeownership is going to remain possible for future generations, then alternative construction methods, like modular housing, also need to be considered.”
We pulled together to help customers achieve their goals, even in the face of record levels of demand.
Technology has, of course, been at the centre of our response.
For advisers, increased use of technology has helped to make it altogether more efficient to complete everyday tasks like sourcing.
Technology also helped advisers to remain connected to customers, with our research showing 75 per cent of brokers saw an uplift in customers engaging with digital resources, including video conferencing and digital document signing.
Farewell to re-keying
The challenges of the pandemic brought a change in mentality towards technology which has been exciting to see.
Our industry has embraced innovation wherever possible over the last 18 months to persevere through the difficult times.
Before the crisis hit, technology was often snubbed by those letting perfect stand in the way of good.
But views have changed, and we are now actively looking at ways to achieve the seamless, customer-led journey that we need.
Of course, there’s still work to do and more integration will be needed to iron out remaining sticking points in the mortgage process.
It’s clear to me from talking to advisers that re-keying is still a massive problem and that brokers are having to repeat simple tasks two, three or even four times.
Vision of the future
We can stop this, free up time for advisers and make the journey more seamless for customers, with a fully integrated end-to-end approach.
There may be a time where advisers don’t have to enter customer information even once. Instead, all the required data is made directly available by the customer.
While mention of a seamless journey would be scoffed at before the crisis, now it’s no longer a distant vision. Through data sharing and technology like open banking we are making strides.
Stuart Cheetham, co-founder and chief executive at MQube, told me of his team’s vision to make the mortgage application journey immediate and real-time, when we spoke at the Legal & General Mortgage Club Summer Conference earlier this month.
By replacing application forms and decisions in principle (DIPs) with data exchanges we can provide the same level of advice – that puts customers’ needs at the heart of what we do – but in a fraction of the time.
Customers at front-of-mind
Of course, this must all reflect the needs of our customers. The absolute centre of the job for most advisers is to find a well-priced mortgage that meets their client’s needs, and sets up that client for future success.
However, at present, inefficiencies and outdated processes are slowing advisers down.
That cannot last, because customers have increasingly high expectations, and the crisis has turbocharged that.
With convenience now at the fore, it is time for the mortgage market to embrace digital innovation and open the door to a better approach.
The mortgage network credited the “buoyant housing market” driven by the extension to the stamp duty holiday for its rise in mortgage and surveying business.
Its surveying services arm supported 263,000 surveys compared to 185,000 the year before.
Reporting its financial results for the first half of 2021, Legal & General Group posted a 14 per cent rise in operating profits from £946m to £1,079m.
The group’s equity release and retirement interest only mortgage lending arm, Legal & General Retirement Retail (LGRR), completed £414m of business up 14 per cent on last year, however lending lending levels remained lower than the six months ended 31 December 2020 when £439m of business was completed.
At the end of June, equity release accounted for seven per cent of L&G’s total annuity assets. Its equity release business portfolio has an average customer age of 72 and a weighted average loan-to-value of around 30 per cent at the point of loan approval.
L&G expects the lifetime mortgage market to become more competitive but said it plans to maintain its pricing levels at the expense of lending volumes if needed.
A trend noted by LGRR is a rise in interest from wealthier equity release borrowers. According to the group, owners of higher value properties are becoming more interested in using equity release when planning the distribution of their estate to the family.
Speaking on Mortgage Solutions TV in association with Accord Mortgages, director of intermediaries Jeremy Duncombe said there were still opportunities for refinancing after the tax break.
He said the stamp duty holiday was one of the reasons for the performance of the property market but the desire for bigger homes and relocating from the city were additional factors driving demand.
Duncombe (pictured) said: “I’m really confident that it’s not a stamp duty-driven market, there are lots of other things contributing. I’m really confident for the rest of this year that we’ll still be in a really positive place.
“In addition, even if the market does quieten off a little bit with purchases, there are opportunities for remortgages and product transfers – where we can potentially argue we’ve been underperforming recently.”
Kevin Roberts, director of Legal and General Mortgage Club, said it would be a “bumper year” for product transfers, with 770,000 two and five-year fixed terms set to mature in 2021.
Although he admitted attention given to remortgage and product transfer business dipped, as purchase activity went up, Roberts said upcoming refinancing was “why we’re optimistic of the year ahead.”
Broker preparation
When asked if brokers were ready and at capacity to handle the incoming refinance business, Duncombe said intermediaries tended to move with the market and deal with trends as they emerged.
However, he suggested brokers needed to have a plan as early as possible to handle product transfers and remortgages.
Andrew Montlake, managing director of Coreco, said good brokers were already doing this.
Duncombe said: “It’s really important we have these customer contact strategies in place. Having a really good customer relationship management (CRM) system, using the information that’s out there, writing to your customers all the way through, not just in the last three months.
“The important thing, if the purchase market does subdue slightly, is that you’re not scrambling round at the last minute trying to do those product transfers and remortgages. That you’ve got the actions in place ahead, so your customers are expecting it, and it’s a much easier proposition for them. The last thing a broker wants is for a customer to feel like they have to go direct to the lender.”
Watch the video below [9:19] hosted by Paula John, editor in chief at Mortgage Solutions joined by Jeremy Duncome, director of intermediaries at Accord Mortgages, Kevin Roberts, director of Legal and General Mortgage Club and Andrew Montlake, managing director of Coreco.
This video was filmed on 16 June, before the tapering of the stamp duty holiday.
Advisers will also benefit from reduced arrangement fee of 1.75 per cent, down from 2.5 per cent. The procuration fee will also be 0.8 per cent.
Octane Capital lends to first-time landlords, ex-pats, applicants with adverse credit and foreign nationals.
Rates for products begin from 4.99 per cent per annum, and have maximum loan to value (LTV) limits between 65 per cent and 75 per cent depending on the product.
The lender will provide finance on properties with a value between £200,000 and £5m, including complex properties such as homes in multiple occupancy (HMO) and multi-unit blocks (MUBs).
Danny Belton, head of lender relationships of L&G Mortgage Club: “Through a common-sense approach to lending, Octane Capital has helped many to start and grow their buy-to-let portfolios and we expect that our adviser community will greatly benefit from the exclusive rates we are offering in conjunction with the lender.
“Its ability to help a wide range of applicants, including those with credit impairments also make it a relevant and timely provider in the post-Covid climate.”
Mark Posniak, managing director of Octane Capital, said: “We expect these competitive rates to suit a wide range of borrowers, however, a clear focus of our is in helping borrowers who have found Prudential Regulation Authority (PRA) stress tests an obstacle to their property investment ambitions.
“By removing the need to stress test and instead requiring 100 per cent rental cover, we are opening the door to yet more aspiring buy-to-let landlords in a creative but responsible way. We look forward to continuing to work closely with L&G Mortgage Club and its advisers.”
Until 30 September, the relief will only apply to properties of £250,000 and under, before returning to the standard threshold of £125,000 on 1 October, alongside the previous duty exemptions for first-time buyers.
With average property prices at an all-time high and now surpassing the new threshold, activity in the market is expected to tail off as savings become less likely.
So this week, Mortgage Solutions is asking: Will the housing market be noticeably affected by the tapering of the stamp duty holiday?
Cloe Atkinson, managing director of mortgage technology solution Mortgage Engine
The stamp duty holiday was introduced and then extended to boost demand following the almost total shutdown of the housing market and this policy seems to have been a clear success.
There is some concern that a small number of purchases might fall through, and overall demand and transaction levels will drop.
Certainly, some buyers who might have benefited from the tax holiday might re-think their options, but any idea that we will see a huge fall in activity ignores the fact that the market simply hasn’t been operating as normal for the past year and a half.
The longer-term economic and societal impact of the pandemic, as well as how the industry continues to respond, will likely play a far bigger role in influencing the future of the housing market.
As lockdown restrictions continue to ease, more pent-up demand will be released as buyers and sellers who have sat tight come to market. Additionally, the future of where and how many of us will work post-pandemic is becoming clearer and more definite.
This could mean the ‘race for space’ accelerates. There are also serious challenges looming over the future of the market that go far beyond the end of the tax holiday.
The end of furlough later this year and the withdrawal of government lending from businesses could have serious ramifications for the finances of potential buyers. As the economic impact of the pandemic becomes clearer, issues of affordability and vulnerability look set to come to the fore.
The property industry needs to look beyond the end of the stamp duty holiday and ensure that it is prepared to meet these challenges, by investing in the right tech and people, refining capabilities and examining procedures.
Kevin Roberts, director of Legal & General Mortgage Club
The mortgage market will certainly be impacted by the tapering of the stamp duty holiday. However, the extent to which it changes the market is still to be seen.
We know that demand for property is currently being driven by a real range of factors and that means people will still be keen to move, even after the tapering takes effect next month. Many still wish to upsize and relocate and there is also significant demand from international buyers.
Last month, our SmartrCriteria data showed that advisers searched for mortgages suitable for buyers with visas more than almost any other criteria point.
It’s also important to remember that we have not seen any significant changes to housing supply or how our housing stock is utilised since the stamp duty holiday began.
That means competition for homes remains high and at a time where housing availability remains unchanged. We must remain positive that the UK’s levelling up agenda will help to change this, but for now, unless there is a big shift in housing supply or usage, stable price growth looks set to remain.
Many have been quick to predict cliff edge disruption when the stamp duty holiday draws to an end, but we’re more likely to see a more gradual return to normal market conditions.
For now, while mortgage rates remain extremely competitive, it continues to be a great time for people to borrow.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society
It’s unlikely that the 1 July will bring as big a ‘cliff edge’ as many in the market previously feared, thanks to the taper.
However, there will undoubtedly be many disappointed borrowers who are unable to complete ahead of the deadline and whose tax bill will be higher than planned – the cliff edge was simply moved and a different set of purchases are now affected.
It’s worth noting though that what we’re seeing is a gradual return to a normal level of stamp duty, so any discount is an added bonus.
For intermediaries, it’s vital that they continue to plan ahead to help their customers both in the short-term and after the tax break ends – the Covid-19 pandemic has changed working patterns for many, and their housing requirements have changed to match, with many now able to look further afield than before.
Brokers who have maximised alternative streams of business, stayed in touch with existing clients, and who haven’t relied on stamp duty holiday-fueled activity to survive will be best placed to carry on their success through the rest of the year and beyond.
The remortgage and product transfer market in particular could offer a strong source of business for many this year, due to a high volume of product maturities on the horizon.
Being there to advise clients and help them get the best deal will mean that a broker’s services remain in demand. And we shouldn’t forget that house purchases will continue, even if at a lower level. As ever, advice will be crucial, especially for first-time buyers and the self-employed, and it’s there that brokers can really make a difference to borrowers.
Speaking on a video debate hosted by Mortgage Solutions, in partnership with Pepper Money, the mortgage club’s head of lender relationships said customers researched options online and panicked when calculators showed they would be rejected for a mortgage.
Pepper Money’s recent adverse credit study found that while 52 per cent of adults wanting to purchase a home in the next year were worried about being rejected for a mortgage, just six per cent of those who actually applied were turned down.
Belton said: “I generally think there is a role for intermediaries to become more visible. And be more visible in channels that customers actually use on a regular basis. Whether that be the likes of Facebook or other social medias.”
He said people would usually speak to family and friends about their credit worries and then be referred to mortgage brokers who could help. However, with people being less connected due to the pandemic, Belton suggested brokers position themselves on online platforms where concerned clients may be.
“I do believe online channels are the first port of call. This then leads to brokers having good quality websites,” he added.
He said updated web systems also helped brokers to keep in touch with existing customers who may have had a change in circumstances by asking them how they were and if they needed help.
Paul Adams, sales director at Pepper Money, acknowledged there was a lack of understanding amongst consumers.
“It’s the very reason why we do the adverse credit study. We want to promote this by social media channels, we take it to the national press as well for coverage.
“It’s a perception gap. People are very embarrassed to talk about credit issues,” he added.
Watch the video below [6:38], chaired by Victoria Hartley, group editor of Mortgage Solutions, featuring Paul Adams, sales director, Pepper Money; Stephanie Charman, head of strategic relationships, lender, Sesame Bankhall Group and Danny Belton, head of lender relationships, L&G Mortgage Club.
