More activity in the housing and mortgage markets can be a challenge and create more work for those in the industry, it was said on a podcast.
Appearing on a podcast in association with Mortgage Solutions and the Bank of Ireland, Martin Brown, head of home buying and ownership at the Bank of Ireland UK, said the market had become more competitive as confidence rose.
He said lenders did want an uptick in activity with “more market to go after” but said price wars were not always a good thing, as they made it challenging for lenders to meet capital requirements and returns.
Regarding mortgage brokers, Brown said the rise in business alongside the requirements of Consumer Duty had “created more activity” for them.
He added: “We are seeing a lot of re-work on cases as rates reduce and brokers are re-placing cases. It’s absolutely generating good customer outcomes in that sense, there’s no doubt about it.
“But it is creating a lot of work for both brokers and lenders, both in the new business and product switch environment.”
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Brown said that was a challenge the sector needed to just “take on” while making sure there was not a lot of activity with little return.
He continued: “You do need there to be fair reward for brokers and lenders as well as ensuring good customer outcomes.
“That’s a challenge we probably need to come through because everyone is just working incredibly hard to get to those good customer outcomes, but you do worry, how hard is everyone working to get there.”
An opportunity to innovate
Brown said brokers often spoke of how many hours they worked, and the work created by product changes, adding that it created the chance to consider “some efficiency there and perhaps a slightly different operating model. There may be something for us all to look at in there.”
Brown said for the Bank of Ireland, the broker voice would be important and work in partnership, something he said was already improving across the sector.
He said the bank wanted to work with brokers to ensure the relationship was reciprocal “and ultimately delivering good customer outcomes and the right products, and hopefully some product innovation”.
Brown said he wanted to see innovation beyond criteria changes, as this would be good for the market and help it grow.
Kate Davies, executive director of the Intermediary Mortgage Lenders Association (IMLA), said innovation in the housing market could relate to mortgages or housebuilding.
She said a lot had been said about modern methods of construction, but people were still clinging to traditional design.
“They don’t like the idea of ripping out a lot of older housing… some modern designs that I’ve seen – a lot of people would really shy away from, even if it’s cheap to run,” she added.
“The government has got a big job to lead that and to give people confidence. A lot of people don’t want to spend money, at the moment, on retrofitting or doing things for which the payback period makes no sense, and they don’t want to waste money doing the wrong thing.
“You can end up wasting even more carbon and plastic… putting in something that gets ripped out a few years later,” Davies added.
As for lenders, Davies said innovation could come not only in product design, but the way lenders treat customers post-completion and throughout the relationship.
This is the second video in a series by Bank of Ireland, supported by Mortgage Solutions. Watch the first episode here: Bank of Ireland podcast: Affordability has undergone a ‘huge change’ since the pandemic and lenders have had to ‘get more pragmatic’
The video features Martin Brown, head of home buying and ownership at the Bank of Ireland UK, and Kate Davies, executive director of the Intermediary Mortgage Lenders Association (IMLA). The host is Shekina Tuahene, deputy editor and commercial editor of Mortgage Solutions.
