Key Consumer Duty developments and recent communications issued by both AMI and the FCA, with commentary on implications for mortgage intermediary firms…
The last 7 months have been turbulent, with more challenging times to come. This is uncharted territory as there are no experts in governments at attempting mass population control in a pandemic. We see money being thrown at problems in a way never imagined. However, demand for houses and mortgages has never been stronger. House prices are robust, people are moving and builders are open for business. The housing market is open. Brokers are as busy as at any time in their lives.
However, the lending industry appears to be hiding behind the curtains. Lenders are limiting market capacity by avoiding higher LTV lending. The service levels of some appear robust but to call many atrocious would be kind and their sudden product withdrawals continue to cause difficulty. AMI is engaged with UK Finance, BSA, IMLA and in direct discussions with lenders to voice these concerns.
There is little sign of sudden improvements, as too many appear to want to accept they are doing all they can. But the roof is starting to leak. The consumer press has spotted falling base rate, lower swap rates and rising mortgage rates – not consumer friendly. No low deposit loans available for first time buyers. Criteria being hardened to limit approvals, but demand is still there. Brokers are just moving to the next lender on the list, but it is more expensive.
At a time of national emergency, lenders again risk looking like the villains of the piece. These are firms under immense stress due to having to deliver remote working, but I am not sure that their most senior execs have their eye on this ball. Both Treasury and FCA are aware and monitoring at this point, so action might be forced. Intermediaries have been delivering great volumes of business, more of which needs individual underwriting due to changes in the economy. Lenders have funds to lend, but are having to limit volumes as they cannot process the amount of business you have available for them. Not a great position overall.
For brokers, most days it feels like pushing water uphill – but that is what they do. Some lenders need to fix their houses and get with the programme.
Chief Executive, AMI