Mortgage Solutions editor Victoria Hartley finds out what he expects from the mortgage market in 2011.
VH: Alan J. Snowball, Countrywide’s MD of principal services has just announced plans to retire and you’ll be stepping up to run Countrywide’s mortgage and insurance services. How’s it been jumping ship from the lender to the broker side?
NS: It’s been a good handover. I’ve been in the privileged position of taking some time since the start date to really get to know the business.
VH: What kind of challenge has the move presented and what’s coming up?
NS: The good news is that structurally-speaking estate agency and banking share similarities and there’s a lot of overlap. However, the key commercial issue this year will be spotting the mortgage opportunities and keeping 650 brokers focused on the cross-sell. It’s about going back to basics and doing the simple things like selling life and general insurance instead of trying to be clever. For Countrywide in particular we will keep up the strong teamwork between the estate agent and the mortgage broker.
VH: Which product areas look interesting in 2011?
NS: Lenders have been concentrating on first-time buyers and home movers, but where are they right now? I have the least confidence in the remortgage market because rates have stayed low giving little incentive to move and despite great remortgage products from The Woolwich and Royal Bank of Scotland, people would probably still rather stick than twist.
Buy-to-let, on the other hand, is more exciting. We are the biggest lettings agent in the UK and the opportunities are there for landlords to build their portfolios to fill the rental demand and property shortages and enjoy minimal void periods.
VH: Do you expect any new lenders to launch this year along the lines of Santander’s widely reported interest in the buy-to-let market?
NS: Most new entrants this year will be in the buy-to-let sector. That’s where the opportunities are.
VH: How does Countrywide expect the mortgage market to perform in 2011 and do you think lending will dip from the bailed out banks after the government-set lending targets elapse in February?
NS: Overall, Countrywide thinks 2011 is likely to be very similar to 2010 with roughly £135-140bn of lending.
We do think Lloyds will lend less over 2011 and probably more of it will be in branch than through intermediaries. But I still expect to see more than £30bn in gross lending from them and any dip will be more than offset by other lenders like Northern Rock and Woolwich.
If HSBC dipped its toe into the intermediary market it could do a lot more than the £13-15bn it does right now but I’m not saying it will. It’s going to be a tough 2011, but I am still more bullish about the second half of the year than the first.
VH: Brokers continue to struggle with a tough climate so what needs to change to make a real difference?
NS: Lenders have to move forward. I’ve been quite encouraged in the last week that Housing Minister Grant Shapps seems to have grasped this. This is a supply side issue and if criteria just relaxed a little we could be looking at a 10% uplift on 2010 and a £150bn market. Wouldn’t that make a huge difference to both the estate agency and broker markets in 2011?
