The Intermediary – November 2024 by theintermediary

From the editor...

Perhaps it is the fact of writing this hot on the heels of our glitzy inaugural awards event, but it feels as if the positivity and festive cheer of the impending season might just be se ling in. It’s even snowing in some areas as I write, although my window is showing only the usual drizzle.

To continue the positivity, the Bank of England lowered the base rate again, which I’m sure gives us all the warm fuzzies even as the weather turns, and I am cautiously optimistic that the upcoming inﬂation data will continue these tentatively positive trends.

Even the ‘Halloween Horror’ Budget didn’t quite cause the chaos that was predicted in the lead up. Yes, there were some painful measures for property investors and landlords – and even more disappointing omissions, for those operating in the property ﬁnance market or looking to get on the housing ladder – but a er all is said and done, we’re pre y hard to spook these days.

There’s not much Rachel Reeves could have done to truly shake this industry up, bar jumping out from behind a bush shouting ‘Truss mini-Budget!’

Back to the real reason for my uncharacteristic positivity. The National Mortgage Awards –Second Charge took place on 14th November, bringing together the best and brightest in the sector to celebrate the achievements of everyone from underwriters through to industry champions. As our ﬁrst here at The Intermediary,

the event set a great tone, and I look forward to many more in the future. Keep an eye out in next month’s magazine for a round-up of the night, and to see if you can spot yourself in the photos.

Much like the snowfall in my beloved London, I am still being realistic, and I won’t be pu ing my money on the thin dusting of positivity sticking around too long in a market plagued by bad news in recent years. For those keen to return to my regular scheduled ranting, I’m sure there will be something to complain about soon.

In the meantime, this issue takes a look at an area of interest for everyone, and one which is a constant source of excitement, even for those most cynical among us. This month, we take a special focus lens to tech across the mortgage market. This covers the entire gamut of the mortgage market, from initial lead generation, through client relationship management, to completion and even out towards the end of a borrower’s loan term.

That’s not to mention all the other elements of property ﬁnance, beyond single transactions, from the tech needed to revolutionise the UK’s housing delivery and meet Labour’s ambitious targets, to the latest in sustainable standard se ing. We take a look at everything, from the systems brokers use to enable their increasingly complex work, through to apps, AI, open property data sharing, and the future of digitalisation in mortgage lending. ●

Jessica Bird

@jess_jbird

www.theintermediary.co.uk www.uk.linkedin.com/company/the-intermediary @IntermediaryUK www.facebook.com/IntermediaryUK

The Team

Jessica Bird Managing Editor

Jessica O’Connor Senior Reporter

Marvin Onumonu Reporter

Zarah Choudhary Reporter editorial@theintermediary.co.uk

Stephen Watson BDM stephen@theintermediary.co.uk

Ryan Fowler Publisher

Felix Blakeston Associate Publisher

Helen Thorne Accounts nance@theintermediary.co.uk

Barbara Prada Designer

Bryan Hay Associate Editor Subscriptions subscriptions@theintermediary.co.uk

Contributors

Ahmed Bawa | Alan Longhorn | Alex Michelin

Alex Upton | Amir Firdaus | Andrew Fisher

Aneisha Beveridge | Ashley Pearson | Averil Leimon

Christian Duncan | Christopher Tanner

David Hannah | David Lownds | Donna Francis

Gamze Bastug | Gemma Brown | Geo Hall

Georgi Demirev | Grant Hendry | I hikar Mohamed

James Gillam | James Woodfall | Jamie ompson

Jerry Mulle | Jodie Andrews | Joel Vinnicombe

Jon Hall | Jonathan Workman | Josh Skelding

Julia Brownley | Karl Wilkinson | Kate Davies

Laura omas | Lilla Dilliway | Lisa Martin

Madeleine Birtles | Maria Harris | Mark Blackwell

Martese Carton | Matthew Parden | Melanie Spencer

Nathan Reilly | Neil Leitch | Neil Wyatt | Nick Hale

Paul Adams | Paul Glynn | Rebecca Salt

Richard Pike | Robin Johnson | Sam Leonard-Williams

Simon Martin | Simon Webb | Sonya Matharu

Stephanie Charman | Stephen Cowdell | Steve

Carruthers | Steve Goodall | Steve Richmond

Tim Bowen | Vic Jannels | Will Calito | Yann Murciano

Cover illustration by Barbara Prada Cartoons by Giles Pilbrow Printed by Pensord Press

TECHNOLOGY FOCUS

Feature 6

FROM PAPER TO PIXELS

Jessica Bird considers how technology is shaping the working lives of modern brokers

Opinion 16

Insights into mortgage sector tech from 360 Lifecycle, Ohpen, MSO, and more

REGULARS

Rapid reaction 56

The industry re ects on the impact of this Government’s rst Budget

Broker business 84

A look at the practical realities of being a broker, from resilience to the monthly case clinic

Local focus 90

This month The Intermediary takes a look at the housing market in Manchester

On the move 94

An eye on the revolving doors of the mortgage market: the latest industry job moves

SECTORS

INTERVIEWS & PROFILES

The Interview 20

PARAGON

Jonathan Workman looks back at the rm’s digital transformation journey

Pro le 28

PRECISE

Jon Hall discusses the lender’s brand refresh and the launch of a new app

Q&A 34

MORTGAGE BRAIN

Neil Wyatt on tech that works now, and plans for the future

PURE RETIREMENT

Gemma Brown on the challenges and opportunities facing business development managers

From paper to pixels

TECH TRANSFORMATION AND THE WORKING LIVES OF MODERN BROKERS

Jessica Bird

Despite a brief period of fearmongering around being replaced by ‘robo-advice’, the ripples of which still show in the debate around artificial intelligence (AI), few would deny that mortgage advice is a deeply human process.

This is particularly true in the specialist sectors. Nevertheless, tech touches and improves every element of modern life, and it would be an outlier – and an oddity – to find a broker that didn’t rely in some way on digital processes.

While larger budgets and greater resources mean that tech innovation is often perceived to be the preserve of the lender side of the market, there is plenty of movement and disruption happening that can directly affect and improve the working lives of the brokers that choose to engage with it.

Whether self-employed, part of a larger firm, appointed representative (AR) or directly authorised (DA), and in whatever part of the property market, there is simply no world in which technology is not playing an increasingly important role.

Nevertheless, the fact remains that brokers face a turbulent rate environment, increasingly complex customer requirements, ever more nuanced products, and major world events coming round the corner at an alarming rate. Add to this the proliferation – and cost – of the numerous different tech options out there, and the picture could be quite daunting.

A fact of life

When presented with the idea of broker tech, there will be those that bemoan the loss of face-to-face client contact, or cling to their paper forms. However, David Smith, commercial director at 360 Lifecycle, notes that “if you’re a modern broker, you probably can’t run your business without technology.”

Just as they use their mobile to connect with clients, send emails or use a digital calendar, technology is truly already a fact of life. As anyone who has progressed through from a Nokia 3210 to an iPhone will know, progress is inevitable, and those who do not accept that are left missing out.

Simply put, Smith says, brokers should not be filling out a fact-find manually, when there are so many easy options and data resources out there to make their lives simpler.

He adds: “People’s lives and credit histories are complicated, especially post-Covid. Meanwhile, products are dropped and changed left, right and centre. That all makes the job really hard for brokers.”

Ifthikar Mohamed, founder of MortgagX, agrees that the market is reaching a point of no return, where brokers will have to use tech to be able to effectively analyse customer data.

Stelios Constantinidis, head of data science and research at MPowered, says: “There’s no reason why this process isn’t as simple and as fast

as getting car insurance, which is a oneclick process.”

It is not just brokers affected by this, as gone are the days of bank branches and paper forms. Constantinidis warns that “customers demand greater tech enablement.”

Adrian Richardson, broker and founder of Mortgage Wallet, agrees, adding that this demand goes further, with the younger generations expecting to be able to transact through apps.

Richardson adds: “The broker demographic is that little bit older than in some other industries. That, in turn, might make them less inclined to go with it. But what are all the lenders doing? They’re building apps to keep up with the customer base.”

Mohamed says: “Today, people are used to life being easy. We like to pick up information in 20 seconds. So, if you give somebody an application form that takes two hours to fill out, they don’t like it, particularly if you tell them they have to log in on a PC, when they have a phone. Borrowers will do it if they don’t have a choice, but it’s not ‘sci-fi’ to be able to do it via an app like ours.”

From sourcing to client communication, there are many systems available to help the modern broker. Sometimes, though, it is as simple as using the right calendar. For Jonathan Fowler, founder and managing director at Fowler Smith Mortgages & Protection, “it is always about tasksetting.” He uses a system that allows for project management, automated reminders and team collaboration in order to keep his brokerage running smoothly. For others, it might be as simple as investigating the features on offer via familiar systems like Outlook.

Fowler says: “AI could be a huge help in the day-to-day, because every broker – even day one in their career – can essentially have a personal assistant to remind them to do something.”

Systems like ChatGPT, meanwhile, can help with everything from marketing copy ideas to creating code for websites, which otherwise might cost too much for a small firm to handle. More than just enabling brokers’ businesses, Fowler says, this puts brokers – no matter their size or status – “on a level playing field.”

Safe and simple

The advent of app and platform-based mortgage broking is not just about pandering to the needs

“I just can’t see the need to upgrade my legacy system”

of the ‘TikTok generation’, but freeing up work that both need not have human input, and where human fallibility could even be a problem.

Smith says there is no need for a human to check binary data like dates, and adds: “Regulatory requirements mean that you’ve got to do various checks, and I would suggest that if you are using paper for these, then you should learn how to do it digitally, because it’s safer.”

In addition to speeding the process up, using a platform or app allows for the kind of digital record that is becoming increasingly important as the regulatory environment evolves.

Christopher Evans and Lee Flavin, co-founders of Mortgage Metrics, launched their business – which allows brokers to log their cases and receive notifications when the rates drop – in the aftermath of the mini-Budget, when rates were “out of control.” One piece of positive feedback they have received is the help with Consumer Duty, allowing brokers to show that they are getting the best deal for a client, without the need for constant monitoring of PDFs and spreadsheets.

Networks increasingly insist that members disclose whether they conduct ongoing rate monitoring, meaning those that do not may want to start, to avoid negative comparisons.

TECH IN THE MUTUAL SECTOR

Tim Bowen is CEO at Mutual Vision

The future of technology in the mutual sector, including cooperative nancial services, is likely to be shaped by several key trends and challenges, including digital transformation, increased adoption of digital platforms for customer engagement and processing, a focus on mobile apps, and online services to enhance accessibility, utilising big data and AI for underwriting, risk assessment, and personalised customer service.

Advanced analytics can improve decision-making and streamline operations. Technology will enable mutuals to o er more tailored products and services based on member preferences and behaviours.

Mutuals will be able to leverage technology to support environmental, social, and governance (ESG) initiatives, aligning with members’ values and societal expectations.

Next steps

MV Nebula will provide many bene ts for mortgage brokers as processes are streamlined with the automation of many tasks. The creation of a seamless end-to-end application journey through access to third-party integrations means MV Nebula can and will drive mortgage e ciencies. Improving the application experience for lenders, brokers and borrowers, while providing increased insights.

By providing a next generation end-to-end platform for lenders, it will empower mortgage brokers to work more e ciently, enhance their service o erings, and adapt to the evolving needs of their clients.

All of this adds time and effort to a broker’s day, further increasing the case for investing in tech.

Fraud and security are also constant concerns. While some might be wary of new tech in its ability to fend off fraudsters, there are considerable advancements being made.

Richardson, for example, cites Mortgage Wallet’s “military grade encryption” and secure, cloud-based system that leaves ownership of client data firmly with the broker. While the platform itself is does not claim to be a compliance tool, this security and transparency can form part of a broker’s overall approach.

MQube offers a content creation tool that allows brokers to create blog posts for their own websites, engaging with customers while

checking they fit with Financial Conduct Authority (FCA) regulations, allowing for a sense of security where previously they might have hesitated.

AI, in forms that are available mass-market, can be used to summarise and transcribe meetings, form key action points, and analyse customer behaviour data to point to where better support might be needed.

However, while tech aims to make brokers’ lives simpler, there is still some way to go. Fowler points to the great benefit of sourcing and criteria search systems, but says these still leave something to be desired in terms of accuracy, particularly if they depend on lenders that might be slow to update the product information.

He says: “These systems are incredible to at least get a very, very good idea of where you’re going to go. But there’s still a manual element involved to make sure that you’re going to the right lender, which I think is a great thing.

“We can never solely rely on tech, in my opinion. We’ve still got to have that human element.”

‘Soft’ skills

The tech available in the market at the moment all tends toward one key goal: freeing up time to spend with the client.

Constantinidis says: “Brokers get to spend more time listening, finding out about the the customer’s situation, rather than doing all the admin of the fact-find.”

Smith agrees: “There is so much data already out there that fact-finds should come preloaded, and brokers should be focusing on the soft facts – goals, aspirations, the stuff that isn’t already in the system.

“Instead, they dedicate more time to navigating criteria, assessing affordability, and sourcing solutions – essential tasks in today’s increasingly complex lives.”

Not only does using the right tech allow brokers to free up their time, it also helps them demonstrate their value to customers. Saving borrowers money by rate monitoring with programmes like Mortgage Metrics, for example, could build long-term loyalty without an added administrative burden.

Flavin points out that with programmes like this which provide a service that runs in the background, while otherwise “the broker’s business is their own to run,” are key to supporting those relationships.

Meanwhile, Mortgage Wallet – an app which supports the relationship with the broker and the client throughout the lifetime of their loan – can create key touchpoints and establish the same level of communication as the broker might p

“If AI is so smart, won’t it take all the time o and make ME do all the work?”

previously have conducted face-to-face, or even more, building trust with clients remotely.

Whatever form their technology comes in, whether simple email reminders and digital calendars, through to AI assistants and apps that take the customer through every element of the deal, the fact remains that brokers are increasingly time-poor. Most need to take on more clients to continue strengthening their business, but clients’ needs – from rst-time buyers to seasoned investors – are becoming more complex. Brokers must cut down on admin, as well as streamlining the processes that do not have a direct return on investment (ROI).

When it comes to rate monitoring, for example, there is little opportunity to make additional money, despite the work being done to catch a lower rate. With a monitoring service, brokers can strip out the additional work, and if they decide to, they can include this as a value-add service, even with a fee, to recoup the cost.

Meanwhile, apps like MortgagX can use the same information brokers already access, cutting hours out of the application process, and using a ChatGPT-style tool, for example, to help create suitability letters. Mohamed explains that the system was created following his own experience as a broker, which helps him to “know the frustrations brokers face,” allowing them more

time to spend on the things that matter.

This might include marketing, for example. Constantinidis notes that many brokers, selfemployed or otherwise, face a challenge when it comes to the time it takes to craft good marketing material. With large language models (LLMs), brokers can create rst drafts, making more out of their limited time and resources.

Future demands

From CRMs to AI assistants, lead generation to rate monitoring, and even all-encompassing apps for the entire mortgage journey, many would say the market is well-stocked with solutions for whatever a broker needs.

However, there is still much to improve, and technology is always evolving. Much of this will be simply improving the systems already in place. Indeed, Constantinidis says, “in ve years time we’d hope that time consuming admin will be a thing of the past for brokers, if lenders embrace AI and tech.”

Nevertheless, the challenges currently faced by brokers are unlikely to disappear.

Flavin says: “It has been two years since the mini-Budget, and every couple of weeks there’s a di erent story around mortgage rates. This rate monitoring process, which mortgage brokers have quite rightly adopted, will run and run.

“There’s no signs that regular rate changes will stop, now that there’s so much of a margin for lenders to be able to consistently tweak them in any variation they like, or any timeframe.

“Brokers who have committed to monitoring rates for their clients have set a service standard, and at what point do they say ‘we aren’t doing that any more’?”

Even at times when rates are increasing, Evans adds, brokers have to be circumspect, preparing for a market in which they fall again.

While tech will continue to evolve within this ‘new normal’, there are also spaces where greater innovation is needed. For example, Smith points out that while 360 Lifecycle, and others, can do ID veri cation electronically, at the moment there is no option to passport this through the process, resulting in multiple costs to the borrower, sometimes even if di erent parties in the process use the same service provider.

“The future for 360 Lifecycle is entirely con gurable,” he adds.

“Every rm likes to do things slightly di erent to try and get an edge on the market, or serve their section of customers the best way. That takes enormous exibility, naturally, and right now, technology is not exible. In fact, fact- nds are pretty rigid, but rms are continually and increasingly asking us for exibility. p

AI TO SUPPORT AND ASSIST

Dean Spasov is CEO and co-founder of finbryte

An AI assistant can analyse all the information provided by the borrower and helps advisers make the right decisions quickly. Anything that the assistant deems important or helpful, it brings up to the attention of the loan o cer in the form of ‘insights’. These could be simple things, such as reminding you that the borrower has a birthday coming up, agging missing documentation, or more substantial ndings such as identifying discrepancies in submitted information or alerting you to limited-time promotional terms from speci c lenders.

Our AI assistant also facilitates work ow by suggesting next steps for each application, and if given approval, executing those actions on behalf of the loan o cer. That means that at the request of the loan o cer, the assistant can execute a range of actions, such as requesting documents or information from the borrower, sending them emails explaining what is expected of them, summarising and comparing loan products, and more.

When deciding what to do, the AI assistant has access to a range of text documents explaining the speci c business processes of a given mortgage brokerage. Since language models can digest and analyse text just as well as people, this means that the brokerage can always change the desired behaviour and knowledge of the AI assistant by simply updating the text documents in its knowledge base.

Having access to this trove of information has the added bene t of allowing the assistant to act as an interactive encyclopaedia of your business rules and data, answering any questions or queries that a given loan o cer might have. We are also working on a feature that will allow the AI assistant to read and analyse documents provided by the borrower directly, helping you extract structured information from them and acting as a rst-pass check on their contents.

“Having configurability and flexibility is key. The most flexible piece of technology you’ll ever use? Paper. We want to deliver the flexibility of a blank piece of paper you can write anything on.”

For those brokers still unwilling to adapt, while there will likely always be space in the market, the fact is that there will come a time when –much like online and mobile banking – these apps and platforms are ubiquitous.

Mohamed says: “There’s a type of broker who’s reluctant, because they’ve been filing papers for the last 40 years, and like that way of doing things, and some who are simply still on the

fence. But people will realise that it’s changing their life, taking away all the manual stuff, and eventually it’s going to change the whole marketplace. We might be pioneers in this space, but it’s only a matter of time.

He adds: “In the future, the mortgage journey will be much, much faster, with offers coming to borrowers on day one. Obviously that’s a dream right now, but at the same time, there are some banks that issue mortgage offers on day one, so it should be the case, and I don’t think that day is far away, considering how we can analyse clients’ data now.”

In the next year, he adds, brokers will be much more likely to use AI assistants, adding, “this is not sci-fi, this is something we’ve done.”

As machine learning develops, Mohamed notes that it will take on a greater ability to emulate the common-sense and logic needed to underwrite deals. In the meantime, at the very least, he says, “the future is open banking,” and brokers should work to ensure their clients are comfortable using it.

Replaced by robots

With all this talk of advancement, an old fear rears its ugly head – that brokers will be pushed out, or their role diminished. However, with all the systems currently available – and indeed all the developments seemingly in the pipeline, one thing remains core: leaving the business in the hands of the broker.

Constantinidis says: “In the future, [brokering] will be perhaps 0% admin and much more time advising, advising, listening. This part will never go away. No matter how much AI changes the process, what will stay the same is the fact that this is a really big decision for a person deciding to get a mortgage.”

Instead of eliminating jobs, the idea is to boost productivity, using AI to make processes more efficient, rather than make decisions.

“People will always buy from people,” says Richardson. “I’m not looking to take away the human element, I’m trying to encourage that and embrace that, providing touch-points during the application and post-completion.

“Some people who aren’t as tech-enabled might see the idea of an app, especially one that’s allowing for progress tracking, as taking away those touch-points for the broker, because they’re not getting on the phone, but where our engagement with email was running at about 34%, engagement with the app is 84%-plus.”

Reaching borrowers instantly and easily means being able to maintain these positive touch-points with less legwork, in an era where phone calls are not the desired method of

communication for many, and emails can be missed or forgotten.

Richardson adds: “A lot of the tech that’s out there comes from an automation perspective, and it’s taking the human element away from some of the advice. I like that human element – that’s the nice bit about my job, if I’m honest. Don’t take that away from me, otherwise I won’t want to do it any more.

“I get that there’s room in the market for greater automation, but we don’t necessarily have to completely change everything – just streamline it a little bit. We’re all about interaction. We’re all about the human element.”

Mohamed says that, rather than remove that human touch, AI is more about doing the things that “brokers hate,” such as the endless analysing of bank statements.

He also adds that, while most brokers will have to adapt eventually, there will always be a borrower who “likes walking into a bank and depositing their cash,” and are happy to stick with the older ways, particularly in sectors like equity release, meaning “there will always be space” for those brokers, albeit a diminishing one.

Working for wellbeing

It is not just the endless drive to greater productivity that is benefitted by higher automation, removing administration, and reaching borrowers better.

Constantinidis says: “We speak to our brokers about how much time they spend daily speaking to lenders, and how it impacts their mental health. Our experience is that these things can become stressful, particularly if there’s any risk of disgruntled clients at the end of it, because they’re not getting answers quickly enough.

“Mental health is such a big theme at the moment, and while we may not be able to transform that completely, the tech does reduce the hassle for brokers. It can support the wellbeing journey.”

This includes getting rid of exasperating phone calls to chase lenders and onerous forms or the need to rekey data.

In turn, Evans says: “Brokers don’t get paid any more when they rewrite applications. They’ve got a juggling act to perform to keep their business profitable and do the right thing for their clients, as well as finding time to attract new clients.”

Flavin adds: “The time saving is the biggest thing for most brokers, who spend sometimes hours a day manually monitoring rates. Now, they’ve got time to write more business, and there’s the cost saving, but also if they choose, they can promote it as a unique selling point, and have a better work-life balance.”

This might mean there is space to do more business, or focus on the much more enjoyable aspects of advice, or, if the broker chooses, play more golf or spend time with family.

For Richardson, it is technology’s ability to help a broker do their job well that is the real stress reduction, from streamlining the barrage of calls or emails, finding easier ways to keep clients happy and engaged, to never worrying about missing a mortgage renewal.

Investing in change

While the proliferation of available tech for brokers is something to be marvelled at, one thing that comes up time and again as an issue in this market is the need for greater investment in joined-up systems.

Smith points out that lenders, for their part, are spending tens of millions on developing their own systems, but that it is “incredibly inefficient to be spending that amount of capital on processes and it really not changing for brokers or customers much.”

Indeed, Mohamed notes that some £21bn was spent on AI architecture by banks last year –which could rise to £260bn by 2025. This does not, however, mean it is being invested in the right places. For example, Wyatt says: “What’s important to remember is, whatever element of tech you’re harnessing as a broker, it’s only as good as the data.”

Without market investment in ensuring strong, connected data sources, tech support for brokers can only go so far. Richardson adds: “One of the ways that we need to move forward with tech is to address the biggest problem I find in this industry: that people don’t talk to each other.”

Through the efforts of the Open Property Data Association (OPDA) and other industry stakeholders, a greater level of information sharing and communication may be on the horizon. In the meantime, from smart calendars to mobile apps, and even AI assistance, the modern broker has more tools at their disposal than ever.

To conclude, a word from ChatGPT: “With AI-driven tools, brokers can quickly analyse a client’s financial situation, recommend the best mortgage products, and automate routine tasks. AI algorithms can also assess market trends, helping brokers offer more informed advice. AI-powered chatbots can provide 24/7 customer support, answering questions and guiding clients through the application process. By reducing administrative burdens, AI allows brokers to focus more on relationship-building and personalised service, ultimately improving client satisfaction and driving business growth.” ●

Is the market waiting for its Napster moment?

In life or business, there is absolutely no escaping the transformational power of new technology. Whether it’s in how we communicate, consume information or entertainment, or how we work, new tech has helped increase capabilities, drive eﬃciencies and ultimately deliver a far be er user experience.

While the mortgage market is certainly no stranger to innovation, there’s still room for improvement and an opportunity to evolve the user experience. There are countless examples of where innovators have challenged convention and opted for disruption, helping to change the landscape and deliver an experience that is be er aligned to the needs of all users.

Disrupting the market

A great example of this is online music platform Napster. It was launched in 1999 by two American students as a peer-to-peer ﬁle sharing service, allowing users to share and download music across the internet. Previously, downloading songs from the early internet had been hugely challenging. But through its very simple interface, users were now able to access music, whether new releases, exclusive records or songs from up-and-coming artists from across the world.

Napster was a disruptor in the truest sense of the word, fundamentally changing the way people consume music and how an entire industry operates – albeit with clear legal and ethical ramiﬁcations. Inevitably, copyright claims and legal challenges followed, and Napster was forced to shut down.

However, the cat was already out of the bag. Napster oﬀered users a be er experience and was a clear forerunner

to the streaming platforms that dominate music today, such as Spotify.

In fact, Daniel Ek, co-founder and CEO of Spotify, was directly inﬂuenced by Napster. Speaking with The New Yorker in 2014, Ek said: “It came back to me constantly that Napster was such an amazing consumer experience, and I wanted to see if it could be a viable business.”

Safe to say he was right, with Spotify now boasting a market cap of more than $75bn.

Changing the game

There are similar stories in countless other industries, where technology has advanced the user experience and changed the game. I would argue, though, that in this market –particularly when comes to applying for a mortgage – we are still waiting to see that Napster-style moment.

Think about it. The process of applying for a mortgage has remained relatively unchanged – it is still transactional, o en disjointed, and can be hugely ambiguous. Plus, it can o en be geared towards one element of the market, without considering the frustrations, challenges and overall experience of all the parties involved.

Much like Napster, we must step away from existing processes or legacy systems and start fresh with our full focus on the user experience.

While the broker experience has long been a priority – and rightly so – we must also broaden our horizons and think about the experiences of all those that play a critical role in the mortgage process, such as underwriters, case managers, surveyors and solicitors.

We must also consider customers, without being too one dimensional. A er all, a customer could be a ﬁrst-time buyer, they could be

remortgaging, in later life or a buy-to-let (BTL) landlord. All may desire the same personal and painless homebuying experience, but their needs and requirements will all be slightly diﬀerent.

Understanding users

There are positive signs of progress with the use of behavioural science emerging in the mortgage market. This is an important component in understanding human behaviour –studying how people interact and why they make certain decisions.

With this powerful insight, technology providers can then eliminate pitfalls or frustrations in the design and enhance the customer journey from the outset.

By looking at exactly want the user needs and what they want to achieve, the right technology can then be put in place to actually achieve those goals. The opportunity is there for the mortgage industry to have its very own Napster moment, creating a frictionless, user-centric experience that transforms the process of applying for a mortgage for every person and party involved.

This is certainly the ethos of Mortgage Hub, which was designed from scratch with the user experience at its core. Whether it is deploying behavioural science throughout the build, or through ongoing consultation with all the parties involved, we are able to address the clear frustrations faced throughout the application process and help to reimagine the entire mortgage journey for all. ●

MELANIE SPENCER is sales and growth lead at Target Group

Why AI can’t be the whole solution

Mortgage advisers today face one of the most challenging markets in recent memory. They’re expected to meet ever growing regulatory demands while navigating a rapidly changing landscape, caused by volatile interest rates and a turbulent property market.

Add to the mix increased pressure from lenders to retain existing customers through product transfers, and a surge of large ﬁrms with healthy advertising and technology budgets entering the race to win new business, and the challenge for advisers has arguably never been greater.

Helping hand, not replacement

It’s not all doom and gloom. Yes, there are challenges, and the mortgage market is rapidly changing, but for advisers who embrace technology, there are tools that can help streamline processes and free up valuable time.

Great technology can automate large parts of the administrative load and provide insights to augment the capabilities of an adviser.

However, while technology holds promise, it is not a magic wand, and it will never replace the nuanced, human role advisers play in guiding clients through life’s biggest ﬁnancial decisions.

Support, not solve

We’re o en asked if artiﬁcial intelligence (AI) is the answer to advisers’ problems. The answer is both yes and no. AI has increasingly been, and will continue to be, a buzzword in the industry, but it’s no silver bullet.

AI certainly has its strengths. It can process vast amounts of information in seconds, giving advisers the ability to analyse transaction histories, summarise credit information, and

surface relevant data at the click of a bu on.

This means advisers no longer have to spend hours creating customer notes and follow-up tasks. Instead, AI can organise these summaries, making it easy to retrieve and review important client details.

Consumer Duty places high expectations on advisers to act in customers’ best interests, especially for vulnerable clients. AI can create bite-sized summaries from prior meetings, ﬂagging important details about the client’s unique needs, health conditions, or ﬁnancial vulnerabilities. This helps advisers quickly get up to speed before reconnecting, making sure they’re informed about any potential considerations for the upcoming review.

By freeing up time spent on admin, AI gives advisers the capacity to refocus on what they do best: building and maintaining relationships, a racting new customers, and acting as a voice of reason in a crowded market. It also enables them to oﬀer a more holistic approach, supporting clients with additional services, such as insurance, that add value during extended client relationships.

High-quality data

However, AI is only as good as the data it uses. Low-quality, fragmented data will lead to poor insights and diminish AI’s eﬀectiveness. Many advisers rely on multiple tools that don’t seamlessly connect, creating a patchwork of data silos. This fragmentation limits AI’s ability to provide accurate insights and meaningful support, or worse, potentially provides incorrect or misleading information.

In contrast, a centralised customer relationship management (CRM) system is a solid foundation for successful AI integration. Advisers with uniﬁed systems will have the ability to harness AI’s real

SAM LEONARD-WILLIAMS is director at Twenty7tec

By freeing up time spent on admin, AI gives advisers the capacity to refocus on what they do best: building and maintaining relationships, attracting new customers, and acting as a voice of reason”

potential, ensuring that it’s built on comprehensive, high-quality data that truly reﬂects their client base.

Adopting tech wisely

As AI continues to evolve, more solutions will undoubtedly enter the mortgage space. Some of these will ﬂourish, and others may fade.

Ultimately, advisers need technology that supports their unique needs, rather than dictating how they work. AI can help make them more eﬃcient, but the best technology will still be the one that empowers advisers to do what they do best: understand, advise, and guide their clients through complex ﬁnancial decisions.

For those who embrace AI as part of a holistic technology strategy, the future is bright. Those who choose to rely solely on traditional methods may ﬁnd it harder to compete.

By blending AI with human insight and judgement, advisers can deliver the tailored, empathic service that clients will always value. ●

Servicing tech drives digital transformation

The second half of this year has seen a substantial increase in market opportunities for businesses like ours that oﬀer core banking, loan and savings servicing solutions.

We have seen enquiries from banks, building societies, business process outsourcers (BPOs), specialists and equity release. But what has caused this upli in institutions looking at transformation programmes now?

The core banking and account servicing sectors have never been the ‘darlings’ of the so ware industry, with the ﬂashing lights and beautiful user interfaces (UIs) of origination platforms being the business development and marketeers’ dreams when it comes to encouraging customer acquisition.

Today, however, far more focus is being given to account servicing technology, with new entrants coming to market with more impressive UIs – with questionable functionality behind them in some cases! This – combined with existing players not keeping up with modern day requirements of automation, funding, and other key areas of account servicing – means that lenders that use this type of technology are beginning to consider re-platforming to new servicing platforms. Let’s look at a few reasons why.

Product

There is a mix of new entrants and established brands in the servicing technology space, with some origination so ware houses ‘playing’ at servicing with no real depth of knowledge, experience or functionality, while other more ‘pedigree’ so ware houses are now able to back up years of servicing loan

and savings accounts experience with fantastic end-user experiences.

In the majority of cases, gone are the days of requirements for mainframe solutions which, although scalable and hugely reliable, are costly, hard to maintain, and in many lenders are so highly integrated that they will almost be impossible to migrate away from.

Companies like us have invested heavily in developing a true cloud native so ware-as-a-service core banking and account servicing product for lending and savings. This means that with the right technology, you can service all of your brands, diﬀerent loans and savings products from a single deployment.

There are no multiple deployments required per brand or product. This creates a large cost saving from traditional platforms as multiple deployments generally come with multiple costs, both in terms of set-up, run-costs and licensing.

APIs

Advancement in this technology continues to gather pace. The use of application programming interfaces (APIs) is growing, and businesses like us have invested heavily to provide a suite of APIs to clients to enable the seamless transfer of data between the varied systems and solutions that may make up a client’s IT stack.

This is particularly relevant when a client is looking for best-ofbreed solutions for diﬀering parts of transformation programmes, a key component of which is o en origination platforms.

By oﬀering an originations API to clients, they can choose whatever platform they require, and we know that as long as the data is returned as speciﬁed in our API, we can service the loan or savings account compliantly

moving forward. Other APIs that should be standard when looking at servicing suppliers include data warehouses, general ledger, customer relationship management (CRM), promotion of data to mobile phones and self-serve portals.

Migration

At Phoebus, we have developed a migrations API that automates the migration process. This technology is tested against client loan or savings book data through several dry-runs to ensure success, but we are now able to commence migration on a Saturday morning and complete it ready for when users come into work on the Monday. This has been successfully achieved on loan books ranging from a few thousand to a few hundred thousand accounts.

All data available from when records began are migrated including open and closed accounts, notes and images. This stops the requirement of having to maintain multiple systems of record post migration. This is a game changer and completely derisks what has always seen as a high risk part of an implementation.

Summary

There is no doubt that the mention of large-scale transformation programmes usually encourages a few deep draws of breath around the boardroom table, but technology has advanced hugely, and in working with suppliers that have long-term experience and supply modern, eﬃcient technologies, all institutions can now take advantage of the beneﬁts transformation programmes can bring. Selecting the right partner with the right experience, technology and testimonials is key. ●

RICHARD PIKE is chief sales and marketing o cer at Phoebus So ware Ltd

The Inter view.

Jessica Bird speaks with Jonathan Workman, transformation director at Paragon Bank, about the lender’s tech evolution

For the past three years, Jonathan Workman has been transformation director for the mortgages business at Paragon Bank. In that time, he has led the lender on a journey of technological and digital change, launching a pilot of its new platform in September following years of hard work.

Workman’s background stems from operations, underwriting and originations, and spans 24 years in the mortgage business. More recently, this has included change management and delivering technology-based programmes to improve the way rms do business on a broader scale.

“I’ve moved from being responsible for the origination of the loan and interacting with brokers, into transformation,” he says.

At Paragon, this focus on change and adaptability meant working with systems that have been in place since the buy-to-let (BTL)

Paragon Bank

lending business was established. Changing this, as anyone who has been through the process of updating any type of legacy system, is no mean feat.

e Intermediary sat down with Workman to discuss how Paragon handled such a seismic shi , and the importance of adaptability, while keeping the core tenets of the business at heart.

Phased progression

When Workman arrived at the rm, Paragon Bank had already started to consider an overhaul of its systems.

He says: “ e tech has served the business well, but sta were increasingly working very hard to work around the system and deliver the service we’ve built a reputation for.

“We’ve been very successful over the years, but you do start becoming constrained by things you can’t do, or things you have to work hard to do manually.”

First, before any development could start, Workman and his team sat down to consider what it was that they were trying to achieve, and primarily, how to de ne the strategy of the business as a specialist, complex BTL lender catering for landlords with large portfolios and complicated structures. is would fundamentally shape what Paragon wanted to deliver via its refreshed systems.

“ ere was a long list of requirements, looking ahead and scanning the market,” Workman says, adding that this laid the foundations for two years of work building the right system.

At the time of speaking, the system was four weeks into its pilot launch, allowing for decisions in principle (DIPs) and application submissions to be made via the platform.

In that time – and based on feedback from a select panel of brokers – there have been two follow-up releases in order to make improvements, with more planned ahead of the full launch in early 2025 e next phase, Workman explains, is to extend the system beyond the o er and through the process to completion, to allow for a seamless journey start to nish.

It took years to get from inception to launch, and Workman says that the temptation with these systems might be to try and deliver sooner, but that it is worth taking the time to get it right.

Product complexity has increased, as has the importance of having tailored solutions. You’re not having one-size- ts-all, and it’s important to ensure we can deliver things in a transparent and quick way”

“One of the temptations was to deliver in modules, so we could get this out piecemeal, which would t with how we ran the project on an Agile basis,” he explains.

“We considered doing it so we could deliver things to market quicker and build on that. But actually we stepped back from that, because we wanted to avoid rework as much as possible, bolting things together and having to go back over them to make them work.

“We also wanted to deliver something that would make the impact to our customers, brokers and sta from day one, rather than losing it as we went along.

“It was important to stand up the infrastructure, build the journey and make sure it owed from start to nish right away.”

Workman says one of the key challenges was making sure all the pieces worked together, both broker-facing and internal processes. e journey was tested throughout the development process, including check-ins with brokers beyond the initial consultation.

is also took in the fact that, when taking a longer time to develop a programme, it is important to keep track of the ways in which tech – and broker needs and expectations –might have changed over that time.

Over the coming months, the continued development of the platform will take into account this added information and feedback from brokers – though at week four, Workman says the response has been almost entirely positive – as well as focusing on bringing in more volume while ensuring the platform continues to perform.

Building a bridge

From Workman’s perspective, the role of a transformation director is to “be a bridge

between the business requirements, the broker and customer requirements, and the technology teams.”

Workman’s role includes leading one team that spans across the business, which includes tech experts, business people, analysts and change functions in order to deliver a sweeping update that works practically.

is means leveraging expertise that “goes beyond pure IT,” and focusing on four pillars: needs, strategy, requirements and delivery.

Workman says: “It’s about understanding what the key elements of our proposition are, making sure that we build on that and bring in tech to support what we currently do, and to make sure we don’t throw everything out.”

He adds: “It’s not just handing over a system to our colleagues and to brokers, but it’s also making sure we understand how we’re going to use that system and make the most of it.”

In addition to the need to update systems to continue delivering a strong service, Workman explains that the nature of the market in which Paragon operates also drove the need for modernisation.

“Product complexity has increased, as has the importance of having tailored solutions,” he says. “You’re not having one-size- ts-all, and it’s important to ensure we can deliver things in a transparent and quick way.”

In addition, Paragon wanted to address evolving regulatory requirements, which is harder to do when working with a system that is nearly 30 years old.

Part of the work to bridge the needs of all parties included extensive discussion with brokers about what they liked about working with Paragon, as well as the pain-points and areas for improvement.

Fundamentally, what emerged was a need to take “all of the legwork out of the system,” ease the administrative and manual burden, automate, and allow for access to data upfront as much as possible.

Clarity and design

Before starting the work on designing a new system, Paragon did consider taking a preexisting solution “o the shelf,” according to Workman.

“It would have been very tempting,” he explains. “But we were holding up what was important to us, and one of those things was that we wanted to have some advantages over our competitors, and not something that was easily copied.

“ at’s how we came to the decision to build our own platform.” →

Creating something bespoke also allowed Paragon to prioritise its other needs. For example, beyond just a core banking platform, the rm wanted to be able to integrate with its choice of the best services on the market, adding and switching as its own evolution called for it. is includes integrating with Companies House, for example.

Building a system internally, while a mammoth task, also meant Paragon was not beholden to the pipeline of an external business, and would not have to “queue” behind other lender customers when the time came to update, develop or troubleshoot.

Workman says: “It means we’re masters of our own timeline, and we could develop a system which suited our business, customers and brokers.”

When it came to the design, Paragon wanted a system that “treated every application on its own merits and could be tailored accordingly.”

To this end, Workman says: “ e application is dynamic, with tailored questions case-bycase, so that the ow of the application means we’re asking the right questions, and we don’t ask the same questions twice.”

“We had to be very clear on what the desired outcomes and design principles were, so that the system could be held up against that,” he adds.

e other important element was that this was an “internal and external” system, integrated to allow for brokers to submit applications on the same system that underwriters pick the case up on, with no transposing.

“ e data is the same, and we access the same services,” he explains.

Previously, while brokers could submit applications online, Paragon had a more standardised form, and there were limitations to what the broker could submit before it would revert to a paper application.

Workman says: “We’ve solved that. We’re making sure that every application a broker submits will be a digital experience from start to nish, and there’s no drop-o from that.

at’s one of the rst things we’ve resolved –some of the basic pain-points from before.” is means being able to handle more than two applicants, for example, or large numbers of properties on the same application.

Data driven

As it stands, the system is already integrating with more than 12 application programming interfaces (APIs), drawing in data from sources across the property ecosystem, such

as Hometrack, including climate and Energy Performance Certi cate (EPC) data. e system not only accesses, but validates that data “as much as we can, as early as we can.”

Workman adds: “ is means we can give a surer decision upfront, based around the applicant’s pro le, a ordability and property information. It also means we have what we need in order to underwrite the decision and take it through to o er.

“We are trying to cut down on to-ing and froing between us and the broker, getting as much of that data as we possibly can up front, to cut down on the time it will take to get to o er and allow us to have more con dence in the decision that’s been given upfront.”

For example, as the vast majority of applicants are under a limited company structure, one of the rst things Paragon sought to do was pre-populate data from resources already available, using the company number.

“For us, that means we can trust it, and that it’s validated, and it’s all automated,” says Workman. “It can then give a very clear picture to the underwriter.”

While automation and easy access to data are key to the proposition, this strengthens rather than chipping away at the role of the underwriter, Workman explains.

“An underwriter will still get to understand the case, engage with the broker and the complexities, and look to see how we can make the case work,” he says.

“We’ll enable the underwriter to get to that understanding of the case quicker and better.

“ at might mean we’re more con dent in lending up to our risk appetite as we have fewer questions or concerns about a case, but it could also mean that we’re quicker at saying ‘no this isn’t for us’ where a case doesn’t t our risk appetite, rather than protracting that process.

“It won’t change our well-established risk appetite, but it will help us be quicker at understanding where a case lands.”

Legacy and agility

Being an older, more established business working with legacy systems can be both an advantage and a burden when it comes to developing refreshed, new tech.

Workman says: “If you’re a rm starting from day one, you haven’t got a pipeline or backbook, or other customer segments to consider – you’re starting from scratch – that might be more appealing.

“But what we’ve got that has helped us, is a lot of experience and knowledge within the business. is means we know where things

We had to be very clear on what the desired outcomes and design principles were, so that the system could be held up against that”

have been tried in the past, and we have a real understanding of what’s important to Paragon.” is might mean having a tried and tested credit appetite, an understanding the kind of nuanced data that needs to get to the underwriter’s desk, or in Paragon’s case, a circumspect approach to tech such as automated valuation models (AVMs). e bank has chosen not to lean on AVMs, keeping its in-house survey team, but the system does pull in AVM data upfront to gain a greater early understanding of the property.

“We use a combination of Paragon’s experience and the new data and technology that is available,” Workman says.

“Bringing that experience into the design has absolutely helped us when building our own system.”

at said, this does not mean that dealing with legacy books and application pipelines during the process of this overhaul has not been a signi cant challenge.

Future intelligence

Workman does not point to a future in which arti cial intelligence (AI) and technology take over from the role of the human being, particularly in the specialist market.

However, he points to the system’s use of some AI in order to “present the case to the underwriter in a clear way, so that they don’t have to trawl through multiple sources and pages of paperwork.”

is allows the system to help a human gain a good understanding of the case, and most critically, “draw their attention to where it is needed.”

For example, the system accesses data from trusted sources, such as Experian, Equifax or Companies House, for example, but of course there are still places where the application necessitates documentation such as bank statements and payslips. At this stage, the platform uses so ware called Digilytics,

which “extracts the data in an intelligent way, analyses and categorises it, and presents it to the underwriter.”

is brings in elements of machine learning to perform some of the more administrative checks that the underwriter would have done previously, while still deferring to human common-sense and expertise.

Looking back at all the work done over the past several years, and ahead at what more Paragon plans to do down the line, Workman sees “massive opportunity” for innovation and adoption of tech in the specialist market, despite the fact that this complex sector o en demands human input.

In fact, it is because of this very complexity that the industry must look to a future of greater automation and innovation in order to “get to grips” with cases much more e ectively.

For Paragon, the immediate future means bringing in a customer portal alongside the broker one, as well as expanding its platform to be able to track accounts and di erent properties, using returning customer data to ease the process, and generally continuing to push for a smoother journey and greater con dence for the customer, broker and internal teams.

Post-o er, this means allowing the borrower to access their case, track its progress through to completion, and once funds are released, track their mortgage and ensure their product continues to be right for them. Some of these capabilities, Workman says, are already built, ready to be further developed as time goes on.

“ e bottom line is that upfront the customer has more con dence about whether we will or won’t do the deal,” Workman adds.

“ e broker can speak more con dently about the decision we’ve given and what we’ll need from the customer, and we can be clearer upfront as to our requirements.”

is con dence and ease of process – as well as the ability to view multiple properties and multiple applications for one borrower –is particularly important as the BTL market becomes ever more complex, and landlords increasingly professionalised.

Giving underwriters – as well as borrowers – a more streamlined, e cient overview of the various elements of a portfolio feeds once again into the focus on creating con dence throughout the transaction.

Workman concludes: “A key thing for us is that this is not just technology. It’s technology, and data, and people – making the most of each of those three elements, and doing things di erently in a way that will pay back later.” ●

A stark choice: Digitise or die

Across the property sector, landlords, lenders, tech providers and tenants are awaiting the ﬁnal form of the Renters’ Rights Bill, which is set to be the biggest change to the private rented sector (PRS) in decades, and could become law by next summer.

It includes new rights for tenants, more rules for landlords, eviction reform, changes to rent increases and a switch to open-ended tenancies.

If you haven’t started prepping for the impact of the Bill yet, this is your reminder. This legislation will push property professionals to increase their reliance on digital tools, so the best way to prepare is to review your information systems, platforms and processes – because digitisation now will pay oﬀ in just a few months.

Getting the details right

Compliance isn’t sexy, but it’s what the Renters’ Rights Bill is founded on. The new Private Rented Sector Database is a major part of the Bill. Landlords and their representatives will need to add the required property and landlord data to the database to demonstrate their compliance.

While the database may help people understand the rules, the Government is clear on its other use: enforcement. The cost of non-compliance could be ﬁnes of up to £40,000 and repayment of up to 24 months of rent.

With the high levels of potential ﬁnes your friendly local trading standards oﬃce can levy on landlords and property professionals, you can see why having easy, digital access to that key compliance information will be critical under the new regime. It’ll also make your lives easier if you’re helping landlords manage that compliance burden.

Paperwork isn’t the only area where digitisation will be critical under the Renters’ Rights Bill.

Currently, if a tenant racks up arrears, landlords and agents can use a Section 21 eviction under the Housing Act 1988. This allows the tenant to be evicted without being given a reason, and in most cases, this avoids a long and drawn-out court process. However, Section 21 won’t be an option under the Renters’ Rights Bill. Instead, landlords must go to court to prove arrears under Section 8 of the Housing Act. Records of bank statements, compliant payment reminders, tenant correspondence, and accumulated debts will be critical.

Gathering all this data from other sources will take an age – or you could leverage PropTech to have it all digitised and accessible with a few clicks of a mouse.

It’ll also pay to go digital when it comes time to increase the rent. The only way to do this under the Bill will be to issue a Section 13 notice. If the tenant thinks the rent increase is unfair, they can challenge it at a tribunal. Convincing tenants that the rent increase is fair is where technology will help. You could spend time trawling Rightmove, Zoopla and On the Market looking for comparables, or simply gather rental price data from your own agency and other sources in a few clicks using the right PropTech.

They will need to be convincing, as waiting for a tribunal decision could delay any rent increase for months. This delay could get even worse once the Bill passes, as I’ve warned elsewhere that the tribunal system doesn’t have the capacity to handle the potential inﬂux of new cases.

Greater digitisation or higher

costs

Digitisation isn’t the only option in dealing with the Renters’ Rights Bill. You could increase your headcount to cope with the additional compliance burdens and up your fees to cover the new overheads.

STEVE RICHMOND is general manager at Reapit UK&I

However, the April increases in employer National Insurance Contribution (NIC) and the minimum wage, coupled with the new Employment Rights Bill means hiring new staﬀ could have a big impact on your bo om line. The alternative is to upskill and enhance your existing team with the right tools.

According to a survey by KPMG, 65% of investment in digital IT and PropTech is driven by a need for improved eﬃciencies.

If your competition is making that investment and you’re not, you run the risk of being le behind. It could leave your business vulnerable to being swallowed up by more agile players, or unable to compete, as landlords seek suppliers that can deliver the data assurances essential to compliance in this brave new world.

But the best PropTech won’t just make your team more eﬃcient, it will also make your business more scalable, allowing your team to take on more work with less stress.

Competitive advantage

We’ve focused a lot on the issues the industry will face without digitisation, but let’s end on a high. Having data is one thing, but being able to analyse it will give you an advantage over the competition.

Identifying market trends from your data will help you to advise landlords looking to expand on the best yields and spot potential listings before they even come to market, which will reinforce your reputation as the expert in your area. A er all, no ma er how digital the rental sector becomes, who a landlord trusts with their investment will come down to the personal relationship between a property professional and investor. ●

Have we forgotten the borrower in all this?

In our recent research into homebuyers, 30% said a be er understanding of the process beforehand would have relieved stress during the mortgage application process, as well as fewer delays in the process (37%) and less paperwork (36%). 15% also called for be er online tools.

Half (48%) said that the feeling they most associate with the mortgage process is anxiety. Although all age groups had some level of stress regarding the application process, there is a stark generational divide, with 38% of homeowning 24 to 35-year-olds wishing they had chosen to rent for longer.

You have to ask yourself, how is it that selling a house today takes on average 22 weeks from exchange to completion? Archaic legacy systems are part of the problem, but lenders have also had a lot of demand-side issues to resolve.

This year marks two decades since M-Day in 2004. In the intervening years we have seen the rise and then abolition of self-certiﬁcation and discount rate sub-prime mortgages, an evolution in repayment standards for interest-only loans, and a wholesale review of income assessments in favour of aﬀordability checks under the Mortgage Market Review.

The Mortgage Credit Directive added another layer to consumer protection regulation. Then there was – and still is – general data protection regulation (GDPR), and prudential and capital requirement regulations changes under the Basel regime.

This was followed by the launch of Open Banking and the demise of the Financial Services Authority – in its place the triumvirate of the Prudential Regulation Authority (PRA), Financial Conduct Authority (FCA) and

Competition and Markets Authority (CMA). Consumer Duty has since taken Principle 6, treating customers fairly, into a whole new realm.

Listed like that, it should prompt us to take a step back to realise just how seismic the speed and scale of change has been. But we should also consider why a lender’s ability to accommodate this value of change has impacted operational eﬃciency.

Operational risks

Wholesale re-engineering of processing systems and ge ing rid of legacy tech issues is daunting. It comes with massive operational and reputational risks. The logistics are o en so mind-bending as to result in the best-laid plans ending in unsatisfactory solutions unable to adapt to a constantly evolving environment.

For the largest lenders, the case for investing in the right people to develop systems that work commercially and comply with regulation is more compelling. For medium and smallersized (SME) lenders, it can rule itself out before even ge ing started.

The danger, then, is that compromises are made to cut costs. According to the Corporate Governance Institute, a culture of following the rules only because you have to is bad news. Its experts say: “Tick-box cultures are warning signs in the world of good standards and compliance. They foster bureaucracy and suck away the motivation for high performance, even if the rules causing it were brought in with good intentions.”

As with all other retail ﬁnancial services providers, lenders can all too easily be lured into the trap of ticking boxes. Especially when margins are tight and there is li le room to go

JERRY MULLE is UK managing director at Ohpen

further should they want to. But that can result in consumer detriment and a failure to comply with the spirit of the regulation.

There’s a lesson in this. Lenders are made to lend. They understand borrowers, credit risk, asset risk, the cost of ﬁnance and funding models. The functionality required to implement that expertise is something else. In a highly regulated world, IT is where strategic partners can really add value, and the thinking that sits behind it is pivotal.

Like our customers, our market is constantly changing and evolving. Regulation must keep pace, and as such, so must the systems that support good customer outcomes. For the most part, firms recognise that controlled innovation from within holds the key. But this doesn’t have to mean a huge investment into bespoke technology development and permanent headcount to enable a firm to cope. On the contrary, success relies on a system’s ability to flex and adapt. New platforms offer agility and robustness, and adopting a new commercial model can make leading edge technology accessible.

O en, the biggest challenge with this approach is internal buy-in and adoption. Learned culture and skills take years to embed; asking a workforce to start that journey again can be daunting. Hard as change might be, however, it is vital for organisations that wish to survive and prosper.

Our research conﬁrmed what we believed to be the borrower experience at the sharp end. With right partner, new markets can be quickly available, and pivoting can be achieved more easily. ●

The value of integrating conveyancing

In today’s fast-paced mortgage industry, time is of the essence, and every opportunity to streamline processes is vital for client satisfaction and business success. One of the most impactful advancements in the mortgage process is the integration of conveyancing solutions via customer relationship management (CRM) systems.

Integrations with a carefully selected panels of law ﬁrms can help combat one of the biggest pinchpoints in the mortgage process, conveyancing-related delays.

According to research from the HomeOwners Alliance, 43% of homeowners reported that delays were a major frustration in their homebuying journey, and a signiﬁcant number of respondents (78%) felt the process could be improved, primarily through quicker, be er quality service.

Working in tandem

When conveyancing is integrated within a CRM, brokers can work in tandem with law ﬁrms to reduce these delays and streamline processes without stepping outside of multiple systems and their workﬂows. Automated updates, reminders, and real-time tracking mean that everyone involved in the transaction, from buyers through to mortgage lenders, can stay on top of the process – whether it’s a relatively straightforward residential transaction or in one of more specialist areas, such as bridging or commercial.

While the research also showed that seven in 10 homeowners were satisﬁed with their conveyancer, service levels were suggested to have deteriorated over the past ﬁve years, leaving ample room for improvement.

More than three-quarters of recent homebuyers believe that communication and transparency are key areas where the process could be be er, with calls for more frequent updates, clearer explanations of the legal process, and app notiﬁcations.

Integrating conveyancing into a CRM directly addresses these concerns, with updates readily available so that clients no longer feel in the dark about where they stand in the process.

The data from integrated conveyancing solutions can also provide invaluable insights for users, enabling them to access key data such as average completion times for various transaction types. This information empowers brokers to make informed recommendations, while also helping them set realistic expectations for clients. Additionally, it allows them to identify trends that may help prevent delays in future transactions, ultimately streamlining the homebuying process for everyone involved.

At OMS, we partner with ﬁrms known for their ability to adapt to the fast-changing market. These partnerships go beyond service delivery; they foster closer collaboration between brokers and law ﬁrms.

By integrating conveyancing solutions, we provide clients with a faster, more seamless, and less stressful experience. In a market where customer expectations are at an all-time high, this added value can distinguish brokers from their competition.

Need for modernisation

The Government’s increased focus on speeding up the conveyancing process reﬂects this urgent need for modernisation. HM Land Registry’s digitisation of local authority search data and the introduction of the Open Property Data Association’s (OPDA) framework to standardise and provide key conveyancing information digitally certainly represent some positive steps in the right direction.

As digitalisation becomes an even more integral part of the mortgage process, staying ahead with modern solutions like CRM-integrated conveyancing not only improves client outcomes but future-proofs brokers’ businesses.

This is especially critical in today’s turbulent lending environment, where eﬃciency and adaptability are essential for success. In a world where customer expectations are higher than ever, delivering this kind of value can set brokers apart from the competition. ●

JODIE ANDREWS

head of marketing at One Mortgage System (OMS)

Integration is key in a fast-moving market

In Pro le.

The Intermediary speaks with Jon Hall, group managing director, mortgages and savings at OSB Group, about the Precise brand refresh and the launch of its new app

In March 2024, Precise Mortgages unveiled its new brand identity, as well as a redesign of its broker and customer websites. Now known simply as Precise, the lender went on to launch a mobile app for brokers within the specialist finance market.

e Intermediary sat down with Jon Hall, group managing director, mortgages and savings at parent company OSB Group, to discuss returning to fundamentals and planning for the future.

Brand refresh, app launch

Rather than simply a fresh logo and eye-catching ad campaign, the Precise brand refresh was a return to and rejuvenation of the fundamentals that made up an already well-established brand.

Hall says: “I tend to approach our brand from four dimensions: leading intermediary relationships; communicating at our best; lending and saving clearly; and excellence and experience. That last one can be the hardest one to hit.

“When I joined, I looked at all of those elements, and one of the things that jumped out at me was that Precise is a very iconic lending brand, but we’d lost a little bit of what the essence of it was. That essence is: no faff, straight to the point, getting the results, being straightforward to deal with, in communications and in our product range.

“We’d lost sight of a lot of that as we’d gone through the integration of the various businesses, and it was an opportunity to bring that back to life, and make sure the brand was true to those principles that were already part of the DNA.”

This meant extensive discussion with intermediaries and internal teams to ensure this messaging was brought through in the brand strategy. It was also not simply a case of launching a brand refresh and leaving it at that.

for Intermediaries and InterBay in one go, rather than having to repeat steps, making things “a lot more straightforward for intermediaries.”

In addition, Precise updated the tools available to brokers via its website, including calculators, criteria and product searching, and site navigation.

The final part of this initial wave of advancement and updating was the launch of the “first of it’s kind intermediary lending app in the UK.”

“All of those things work together to deliver the true experience we wanted the Precise brand to deliver for intermediaries,” Hall says.

Not only was this a broad-reaching, holistic project during development, but Hall adds that this was never meant to be a “one and done,” but a project in which OSB Group will “invest and deliver as we go” over the years.

When it came to launching the app, one of the first considerations was “easy accessibility,” from being available through different app stores and easy registration with pre-existing data from the lender’s portal, through to using the latest biometric Face ID technology.

According to Hall, the foundation of the plan for the app was for it to be “a virtual assistant for our intermediaries – there was no point it being a flat place with basic messaging.”

Hall says: “It’s the period after bringing it to market that’s particularly critical.”

This means it was timed to coincide

It was important that the Precise brand refresh was not brought in in isolation. Instead, it had to be aligned with OSB Group’s wider technological development journey. This means it was timed to coincide with a website refresh, including developments which allow brokers to register across Precise, Kent Reliance

He adds: “We understand that the point at which we are handling the client is critical, and an intermediary is trusting us with their client. It’s really important that we keep the intermediary engaged with how their client’s interaction with us is progressing.”

The app includes instant case updates and push notifications, among various other functions that Hall says are designed to help the broker continue to feel in control and be “on the front foot” with their own clients.

JON HALL

The app also aims to emulate the new brand identity. Hall says: “It’s fun, engaging, light, direct, with no faff communication – we’re not filling someone’s phone with notifications that aren’t relevant to

He engaged with how their client’s interaction with notifications that them.”

Changing needs

While much of the brand refresh focused on a return to core values, this was also a project focused on the current and future needs of both the business and its intermediary partners.

Hall adds that brokers are looking for straightforward products that are easily understandable and accessible, which are elements that have remained true all the way through, but that the business keeps in mind that “borrowers’ and intermediaries’ needs evolve all the time.” For example, the post-Covid world, as well as the cost-of-living crisis and inflation, have all created challenges that call for different support for borrowers, and different information for brokers.

Precise sat down with intermediaries for qualitative interviews to find out what truly mattered to them, their experience navigating websites and online tools, and to understand what the key drivers are. This process continued, with “usability workshops” which had brokers navigating through the refreshed journeys to ensure that they delivered as expected.

“Those conversations often gave us pause for thought and helped us change direction a few times,” Hall explains. “We don’t just launch and leave. We launch and revisit, and we’ve done pieces around the website – criteria sourcing, product search capabilities, bridging calculators –as part of a continuous process.”

Hall adds that it is important for the sales team to “walk in the shoes of the intermediaries they work with,” which also helps catch any potential pitfalls around the broker experience.

One of the reasons for the launch of an app, specifically, was the idea of keeping brokers informed and connected while on the go, particularly where a lot of other lending systems are browser based, and therefore most likely to be used via a computer or laptop. This aims to meet the challenge that brokers are increasingly timepoor, their cases and borrowers more complex, and the market ever more nuanced.

“If you’re using your computer, there are limitations, whereas we have our phones on us all the time,” Hall explains. “This is particularly important where product changes are happening more frequently. This way, a broker can see what we’re doing that’s relevant to them, understanding whether something is coming down the line that means they need to push an application through, for example.

“All of this is also going to help them develop their relationships with borrowers.”

Brokers already face a huge admin burden, which can cause delays for borrowers, in turn. Swapping between multiple logins on different systems, for example, can simply add to their workload.

Precise has worked to overcome this administrative burden, promoting greater efficiency and service for the end client.

Connectivity

Looking at the practical realities of what will be needed from tech in this industry in the coming years, Hall says: “It’s easy to say you’ve made a tremendous advancement, but to really achieve that you have to look at the end-to-end of tech and customer experience.

“For example, we’ve seen quite a lot of advancement around automated valuations [AVMs]. It’s critical to use that automation, particularly at the front end to speed an application up, but that’s only one part of the holistic experience.

“At OSB Group, we’re looking at that endto-end view, and trying to understand how we can enhance the whole experience. That might be about how you handle a valuation, how you receive information and automate verification checks, process documentation, whether you use APIs and Open Banking.”

Much of the next stage of progress, rather than launching new tech – which Hall says is largely “already out there” – will be about making sure it all connects smoothly, as well as ensuring and improving the quality of data being used.

Hall adds: “The other thing that is becoming increasingly clear is that you need to have transparency, accountability, and a human relevance as part of an automated decision.”

“The more that you’re using all of this sophisticated modelling and computing techniques, the more important it is to have a human in the loop so that you can explain and review how those decisions come about,” Hall says. “That fits with Consumer Duty and customer service.”

There has perhaps been a reluctance in some quarters of the specialist market to adopt tech, as this market necessitates human oversight. However, human does not have to mean manual.

“Like anything, it’s very easy to get the imbalance and weigh too much into technology,” Hall concludes. “You need a lot of experience being a specialist lender, and a track record of delivering for brokers, in order to get the right balance, and use it to do something very interesting in the lending space.” ●

App revolution: Engaging, light and direct

Boosting tech talent via regional hubs and education

The UK’s tech sector is one of our modern economic success stories, with its contribution to the economy rising over 25% between 2010 and 2019, and now adding over £150bn, making it one of our most valuable economic assets and the leading tech sector in Europe.

The pandemic turbo-charged demand further, as companies uploaded their operations to the cloud and boosted cyber-security, making the market even tighter. While the demand for tech talent is certainly high, the supply of tech professionals is not necessarily keeping pace.

Growing the talent pool

Mutual Vision aims to oﬀer our clients cu ing-edge, next-generation technology. That means hiring people capable of creating banking platforms and working alongside best in class partners. This is not possible without the right skills being available.

MV Solar — our cloud-native ‘digital bank in a box’ — is a case in point. Having launched version one at the Building Societies Association (BSA) conference earlier this year, we have now unveiled version two. The development of the platform would not be possible without a team of highly skilled individuals.

At the moment it is diﬃcult, if not impossible, to ﬁnd the right people with the right skills, but it should be easier.

Other nations have supported their tech sectors with a super-abundance of trained workers – skilled professionals who have turbo-charged the sector’s growth. They have welcomed tens of thousands of engineers from foreign countries, reworked education priorities with emergency plans to

boost the number of students studying mathematics, and grown talent via state institutions.

The UK could increase the tech talent pool by promoting the development of hubs in other regions outside London through investment, incentives and infrastructure improvements to balance opportunities, all while encouraging remote work policies that allow companies to tap into talent from across the country.

The Government could offer more financial incentives in the form of grants and subsidies to startups and established companies that set up operations in regional areas, or by implementing tax incentives for those that invest regionally. There’s also the leveraging of existing strengths by identifying and developing regional success, such as fintech in Edinburgh or health tech in Manchester.

The Government should also review the national curriculum to ensure digital literacy and skills are crosscurricular and integrated throughout primary and secondary education. This should include funding to support teachers, and a requirement for every student to undertake a computing qualiﬁcation by age 16.

While I’m not suggesting we train a cohort of tech professionals via the British Army, the state has a role to play growing tech talent, a er school, too. We could make the Apprenticeship Levy more ﬂexible – between 2020 and 2022, £2.6bn of levy funds for apprentices expired, a sizeable investment that was not made back into businesses and the workforce due to the conditions placed on how the levy funds can be spent.

We could also build an online Digital Skills Toolkit to help individuals and employers identify

accredited courses to boost digital skills and support lifelong learning.

We’d need to design an accreditation framework for short modular courses and build a toolkit based on the current Department for Education Skills Toolkit, backed by an extensive database of materials and courses to support individuals, workers and employers in retraining.

Seeking skills

Tech providers don’t have to be at the mercy of the Government. Firms can help themselves by pu ing more emphasis on skills rather than academic credentials, evaluating candidates’ aptitude rather than hiring for degrees.

Many of today’s tech roles require skills that can be acquired without a university degree, but demanding the academic credential puts up false barriers to employment.

Hiring for skills also opens the workforce to marginalised workers, including women, and allows open positions to be ﬁlled more quickly. It also makes it easier for people with degrees in unrelated disciplines to switch careers.

In 2012, IBM couldn’t find enough applicants to fill its cyber-security roles. Its degree requirements were filtering out qualified candidates, so it rewrote the job descriptions to outline the skills needed for each position, and stopped requiring a degree. It was so effective that IBM expanded the change to other roles.

You cannot set the pace of technological and digital change without skilled people. ●

TIM BOWEN is CEO at Mutual Vision

A new era for underwriting using AI

Artiﬁcial intelligence (AI) is revolutionising industries with its data-crunching power and decision-making abilities, reshaping underwriting as we know it.

Enhanced e ciency

AI supercharges underwriting by automating data collection and analysis, reducing processing times from days to hours. This rapid turnaround improves customer experiences and boosts competitiveness.

By deploying AI, banks can streamline workflows, improving efficiency and securing faster approvals a key advantage in today’s fast paced financial market.

Risk assessment accuracy

Imagine an AI system processing customer data within seconds, identifying subtle risk indicators o en overlooked by human analysts.

This precision in analysing ﬁnancial histories, from transaction details to spending habits, results in more accurate risk evaluations.

This reduces human error and supports be er informed lending decisions. For lenders, this leads to safer loans; for borrowers, it promises fairer outcomes.

AI’s prowess in detecting fraud is also unparalleled. Machine learning algorithms can identify irregularities in data and ﬂag potentially fraudulent activities, strengthening due diligence and anti-money laundering (AML) measures.

These systems continuously learn and adapt, maintaining a proactive stance against evolving fraud tactics.

As fraudsters become more sophisticated, AI can ensure that

ﬁnancial institutions stay one step ahead, enhancing trust and security.

Strategic allocation

Automation in underwriting reduces operational costs significantly. With AI handling routine processes, firms can minimise staffing for repetitive tasks and reallocate resources to strategic, growth focused activities. This cost efficiency is transformative, allowing banks to focus on innovation and customer engagement rather than just maintaining existing processes.

Game-changing partnership

Open Banking, combined with AI, revolutionises access to ﬁnancial data. Through consent-driven data sharing, underwriters can view detailed ﬁnancial histories, such as income, expenses, and transaction pa erns.

This granular analysis moves beyond traditional credit scores, offering a comprehensive understanding of an applicant’s financial behaviour. Enhanced data insights improve risk assessment and foster transparency, benefiting both lenders and borrowers.

Enhanced client relations

AI allows for tailored risk evaluations, adapting loan products to individual clients. This means offers aligned with a borrower’s creditworthiness and financial habits, potentially leading to lower interest rates and customised loan terms. For financial institutions, this builds trust and client loyalty.

Streamlined veri cation

Traditional ID veriﬁcation processes can be slow and error prone. AI solutions, leveraging biometric and image recognition technology, expedite and secure this step.

IFTHIKAR MOHAMED

is mortgage consultant and director at WIS Mortgages and Insurance Services, and founder of MortgagX

Clients can enjoy a seamless onboarding experience, while underwriters gain assurance in the authenticity of applicant identities. This swi , reliable veriﬁcation process supports compliance without compromising speed.

Voice assistants in onboarding

Voice assistants are becoming integral to customer service, simplifying data collection and initial screenings. These tools transform client interactions into pre-underwriting assessments, allowing for easy status checks and document submissions. The future could include multilingual and conversational interfaces, making the process even more inclusive and user-friendly.

Beyond automation

Real-time decision-making, blockchain integration for secure and transparent records, and the transformation of underwriter roles are on the horizon. Companies like MortgagX exemplify this shi , integrating AI to streamline operations. While human expertise remains invaluable, a partnership with AI promises unprecedented accuracy and innovative solutions. AI is reshaping underwriting, driving eﬃciency, accuracy, and personalised experiences. However, challenges such as algorithmic bias and data privacy still need addressing. The future of underwriting will blend human judgment with AI innovation. For ﬁnancial institutions, embracing AI isn’t just a strategy, it’s a necessity. As the underwriting process continues to evolve, the opportunity to lead or lag is in their hands. ●

The role of tech in meeting sustainability goals

In recent years, the property sector has faced increasing pressure to align with environmental, social, and governance (ESG) standards, driven by growing awareness of climate change, energy crises, and new legislative mandates. ESG isn’t just a ‘buzzword’, it’s a critical framework for creating long-term value, reducing risks, and attracting stakeholders.

Property technology, or PropTech, is a vital enabler for property owners and developers to address ESG imperatives, offering solutions that range from reducing carbon footprints to enhancing energy efficiency. As PropTech innovation accelerates, owners and developers now have access to advanced tools that help them meet ESG objectives.

ESG represents more than an ethical responsibility, it’s becoming a commercial necessity. Investors, tenants, and regulators are placing greater emphasis on ESG criteria as they evaluate properties. A building’s energy efficiency, carbon emissions, social impact, and governance practices can significantly influence its marketability, financing options, and long-term value.

Environmental aspects are particularly crucial, as buildings account for 39% of global carbon emissions, according to the World Green Building Council. Given their significant environmental footprint, there’s immense pressure to decarbonise operations, enhance energy efficiency, and adopt renewable resources.

Meanwhile, social aspects such as community impact and healthconscious design, along with governance concerns like transparent management practices, are reshaping

expectations for a sustainable property market.

There are several ways in which technology is enabling property owners and developers to advance sustainability.

Energy management systems (EMS)

Using Internet of Things (IoT) sensors, smart meters, and artificial intelligence (AI), an EMS monitors and optimises energy use in real time, cutting costs, reducing emissions, and enhancing energy efficiency. Systems can adjust lighting, heating, and cooling based on occupancy, while smart meters enable tenants to track their consumption.

Sustainable materials and retrofitting

PropTech supports sustainable construction by incorporating materials like carbon-absorbing concrete and recycled steel, and by retrofitting existing buildings for energy efficiency.

Tools for 3D modelling allow developers to evaluate materials’ environmental impact and make ESGaligned choices from the outset.

Digital twin technology

Digital twins create virtual replicas of buildings, allowing real-time performance monitoring and optimisation. They help property managers simulate energy use, predict maintenance needs, and ensure assets meet ESG standards.

Water and air quality management

IoT water sensors and advanced air filtration systems help conserve water, prevent leaks, and ensure air quality. These solutions contribute to both

environmental and social ESG aspects, supporting resource efficiency and healthier indoor spaces.

Regulatory and legislative drivers

New regulations like the Minimum Energy Efficiency Standards (MEES) and the EU’s Taxonomy Regulation are driving PropTech adoption. Incentives, including tax credits and grants, further support property owners investing in sustainable technology, making ESG aligned practices more feasible and accessible.

As PropTech continues to evolve, it’s poised to become even more integral to ESG strategies in the property market.

Emerging innovations, such as blockchain for transparent reporting and AI for enhanced data analytics, will strengthen a property owner’s ability to meet sustainability targets.

Additionally, as new ESG metrics become standardised, PropTech will provide the tools to capture, analyse, and report on these metrics accurately.

The impact on ESG is a gamechanger for property owners and developers aiming to meet growing expectations around sustainability.

By enabling a more sustainable and data-driven approach, PropTech is helping the UK housing market redefine its role in addressing the world’s most pressing environmental and social challenges.

As ESG demands intensify, those that leverage these technologies effectively will not only comply with standards, but also position themselves as leaders in the sustainable transformation of the built environment. ●

GAMZE BASTUG is head of marketing at FinSpace

Mortgage Brain Q&A

The

Intermediary speaks with Neil Wyatt,

sales and marketing director at Mortgage Brain, about tech that works now and plans for the future

What does Mortgage Brain off er the modern broker?

Technology means so much to different people. When it comes to mortgage sourcing, there are three distinct pots. First, you have your back-office systems, your customer relationship management (CRM) system. Mortgage Brain has two desktop application CRM systems, which have won multiple awards over the years. They’re used by thousands of brokers to manage their client base and keep them safe and regulatory.

Second is what was historically called mortgage sourcing. That’s expanded over the last five years to be so much more than just the rate – there’s affordability, policy and the property, as well.

Our sourcing solution encompasses all four elements. You can look at the policy and criteria of more than 100 lenders, and we’ve embedded automated valuation models (AVMs) into all our systems. The broker can see real-time data on the value of that property. This improves broker productivity, because they can do so much more with that data.

Finally, there’s client nurturing or lead generation. We have more than 100 firms that use our web services – where we design and implement a website for them. There are also hundreds more firms that take mortgage plug-ins from us, which they can power through their own websites. We also have Google forms that they can put onto their websites, which can automatically pre-populate leads into the CRM for them.

We find ourselves in a situation where, as a provider building solutions that saves brokers time and effort, lenders are now adopting those solutions themselves. That’s testament to what we’re developing here.

What day-to-day challenges does tech like this aim to address?

We’ve recently done some surveys which found that brokers believe they are going to be busier over the next 12 to 18 months, and that consumers want to act quick and make decisions quicker.

We’re also facing a world where broker revenues are slightly lower, because of the move towards product transfers (PTs). This is added to customer expectations driven by the media and what happened in the mini-Budget, which is adding to the need to move quickly.

Brokers are having to write more business, possibly for the same or slightly less revenue, but they have to do it quicker, so there’s a huge productivity piece in there.

Then, you have to factor in the Autumn Budget, and the impact on some small to medium (SME) brokerages when it comes to National Insurance Contributions (NICs)

On the back of the horrendous mini-Budget, lenders were changing their products almost daily, and whatever system a broker was using, that pace meant they were potentially looking at products which weren’t live anymore. We made the decision to invest and reduce our turnaround time.

If we think about a broker’s day-to-day, going back five or 10 years, I hate to think how much time was spent on the telephone trying to place cases. The emergence of policy and criteria systems now that allow a broker to answer specific questions and place a case is huge.

So, how do we bridge that productivity gap? First, we’ve just launched the Mortgage Brain Hub, looking at some of the pain-points that brokers have around logging into multiple systems, or not having everything in one place for all the different parts of the journey. The hub puts all of our products into one single online space. It allows brokers to manage their own licenses, their own systems, control their own panels – they can do it all themselves, with training and

Second, we know that the most timeconsuming part of a broker’s job is the transfer of data from one system to another, and then the matching of that data.

NEIL WYATT

To that end, we’ve just launched a solution called Submissions Brain. We have our first transactions flowing support provided. we launched a solution called

through that now, for lenders such as Halifax, Nationwide and Santander, and the feedback from brokers getting to the decision in principle (DIP), it’s saving them between 15 and 20 minutes.

The key to all of this, is actually helping brokers change their own habits and their own businesses.

Lenders potentially have to make decisions based on the size of their distribution, so those distributors that brought in a lot of mortgages possibly held the pen on integrations. That becomes quite challenging for the lender, because if every integration is bespoke, there’s only so many they can do at a time. So, we’ve said to lenders that we’re quite happy to share the technology that runs our new submissions solution. We are also sharing it with what some might call our competitors, our peers, which could mean a lender that connects to Mortgage Brain can automatically connect to any other CRM in the UK, or any broker’s proprietary systems.

There are huge benefits there. One being that that means the mortgage lender gets fuller distribution. Next, it means that the end consumer and the broker benefit, regardless of which network or system they choose.

We believe that is good for the industry. Otherwise, the risk you run is that the bigger people get bigger, and smaller brokers become more inefficient and potentially can’t compete.

Not every single broker will have a proprietary system in their offices, or they may choose for whatever reason to not to integrate. Therefore, in our new Mortgage Brain Hub, we’re also building that technology as a standalone solution, which means that any broker in the UK will be able to register and have access to secure authentication, the ability to create and submit DIPs or full mortgage applications with lenders on the service.

Does the market need greater connectivity and collaboration?

Yes – we’ve obviously got the Open Property Data Association (OPDA), which is doing a great job, and there are lenders that have invested into technology. What we need to be mindful of is that a lot of work needs to be done by lenders, by distributors, and by other people to standardise data, as well as in Government. There is an awful lot of work to do as an industry.

The industry is working together and working to collaborate. The risk, though, is that sometimes we focus too much on tomorrow’s world, rather than today. We’re building solutions that brokers could choose this afternoon.

As an industry, we have to balance those two bits together. We have to look to the future, but

build solutions that can change the market today. It’s a balancing act.

Covid-19 obviously brought a raft of changes into the industry, the mini-Budget brought more. What we’ve learned as a business is that we must be agile. The way we’re building out our technology, the way that our people think, is about reacting quickly to industry changes.

The main things we’re building towards are, first, how do we ensure that lenders can actually digitise their mortgage originations. Second – and this will get a different response depending on who you ask – is the use of artificial intelligence (AI).

Do I think AI will replace mortgage advice? Absolutely not. Do I think AI has a role to play in supporting intermediaries? Absolutely.

How can technology help brokers with regulation?

Technology will massively help with the Consumer Duty - segmenting customers, managing customer queries, the constant scanning and reviewing to make sure that the advice and the products are still fit for purpose, customer engagement, even down to the reporting on Consumer Duty, lead generation and vulnerable customers.

That’s probably the biggest element of how technology is going to have to continually adapt to make sure that it helps brokers meet what the regulator’s asking for.

At the moment, when we talk to the Association of Mortgage Intermediaries (AMI) and the other trade bodies, it’s about the time and effort that’s going to be put onto a business if people aren’t using technology to meet the Consumer Duty.

How do you solve today’s problems while remaining flexible?

The biggest bit for us is data structures, and the groundwork that goes into building it all.

The reality is that everything we’re building now is about the standardisation of the documentation that’s being shared. That’s all we can really do. The intention is there as an industry, and we believe that the standards should be black and white.

As we integrate with more lenders, we challenge them on our own data standards. We should be saying ‘we are the technology experts here, we’ve got a history of a business of delivering solutions, so trust that expertise’.

Going forward, we will engage with all the relevant parties that are looking at that picture for tomorrow, understand what they are building, and wherever possible, we will try to ensure that’s all been captured in what we’re building for today. ●

Could legislation overhaul an appalling process?

This autumn has seen a whirlwind of speculation and commentary from the industry on the Budget.

But the Budget is not the only show in town. In fact, a new Bill – which has almost slipped under the radar for most, is oﬀering the most hope for solving the country’s notoriously poor homebuying process.

The Data Use and Access Bill, sponsored by the Department for Science, Innovation and Technology, successfully had its ﬁrst reading in the House of Lords on 23rd October. There was full cross-party support and agreement to bring the second reading on 19th November.

When passed, the Bill will fundamentally change how customers engage with their data, making homebuying simpler.

It revolutionises how we think about, access, and share data.

Why does this matter?

Currently, we have one of the worst housing markets in the world. Buying a home should be enjoyable and a cause for celebration. Instead, the process leaves itself open to heartbreak, failure, and unacceptable levels of fraud.

Our appallingly sluggish homebuying process means that we average 22 weeks to completion, have a 30% failure rate and that 85% of buyers have a stressful experience. Staggeringly, the system is still largely paper-based, with less than 1% of property data available in an interoperable digital format. In no other customer-facing retail industry would we tolerate such a poor consumer and user experience, and this is one of the most important and costly transactions in our lives.

It is clear that we urgently need reform. This can be achieved through digitisation, shareable property information, and improved data and technology standards.

The new Bill should help deliver just that. It gives consumers the power to access their property and identity data, and enables sharing of that data with authorised and accredited third-parties within a secure trust framework. It puts the customer in control and means they only have to verify their property and identity data once. This has huge implications for the document-driven and manual check approach that we employ today.

The Bill will give the Science and Technology Secretary and HM Treasury the power to introduce new smart data schemes through regulations which will specify the scope of a scheme. These regulations include: who is required to provide data; what data they are required to provide; how and when they must provide that data; and how that data is secured and protected, including who authorises access to data.

Work on the ﬁrst phase will include prioritising a trust framework for property. This will be based on our work at the Open Property Data Association (OPDA) on open data standards, and led by the Department of Business & Trade and the Smart Data Council.

Secure standards

Since we launched in June 2023, the OPDA has been campaigning for secure open data standards.

Our mission is for every company, in every part of the mortgage and property transaction, to access and share open data in a digital, standardised, and trusted format. Our members, who cover every part of

the industry from OnTheMarket to major lenders such as Lloyds Banking Group, Nationwide and NatWest, are commi ed to achieving this, and to overhauling the homebuying and mortgage process.

I am very proud of the progress OPDA has made in such a short space of time. We have delivered the ﬁrst industry property data standards and shareable data tools, making these free and openly available to everyone. Those using our data standards for digital property packs have seen time reduced from oﬀer accepted on a house and a mortgage to exchange of contracts within 15 days.

We’ve met regularly with Government to ﬂag the challenges consumers and the industry face, and the barriers in the way our property market works.

In May, I gave evidence to the Select Commi ee’s ‘Improving the home buying and selling process’ inquiry. I called for legislation, and development of the trust frameworks which already exist, to enable the entire home buying and selling process to be digitised within three years.

The new Bill offers cause for optimism that this will now finally happen. Our work shows what can be achieved. Together with the Government, we can bring in the wholesale reform that the housing market so urgently needs. This will mean a faster, more efficient, and more transparent home buying journey.

We can’t wait to work with the Government to progress this important work. A fair and streamlined homebuying process, ﬁt for the 21st Century, feels within reach. ●

MARIA HARRIS is chair of the Open Property Data Association

Get streets ahead with our latest property market insights.

Read our new report to navigate the future of the residential mortgage market.

Steered by insights from our latest research and industry expert commentary, we discuss if we’re really on the road to a residential revival and what this means for driving home ownership ambitions forward.

AI in the quantum era

Quiassitatur, anos

Our 2024 Mortgage

Eﬃciency Survey takes a view of a range of aspects, but I want to focus on one for this article: artiﬁcial intelligence (AI).

When we asked lenders whether they believe AI constitutes a threat, opportunity or both, and upon whom and where it might have the most impact, most understood it entirely from an organisational view.

The majority considered AI to be machine learning with varying impacts on their operations, mainly complementing current human roles in providing services. For many, eﬃciencies and consistency were

key to adoption. Some had already embedded features such as chatbot solutions and were mulling over ‘execution-only plus’ journeys. A few showed interest in employing AI to support business development managers (BDMs).

Machine learning was thought to oﬀer possible breakthroughs in the area of product modelling by virtue of being able to examine vast datasets.

This type of deployment is being used by some to understand borrower performance, with the prospect of moving from loan-to-value (LTV) based pricing to individually assessed pricing mentioned by one lender.

Our research also found that most lenders have not begun assessing

how AI may impact their borrowers. Interestingly, most of the lenders we spoke to across the spectrum of large banks, specialist lenders and mutuals told us they were ‘keeping a watching brief’.

Bigger picture

While our own research focuses on a relatively narrow aspect of the market and lenders’ mortgage processing operations, it’s worth pu ing our ﬁndings into a broader context.

In the UK mortgage market, the use of machine learning is primarily focused on the customer and their experience – be that broker service, customer service or the assessment of individual borrower a ributes and

how those could or should inﬂuence product design.

In the wider economy, AI has a much broader remit.

Arguably its biggest strength – and weakness – is its role in customers’ data security and the risk of data breaches that could cost companies millions of pounds for just one cybera ack.

But as with any technological paradigm shi , the AI and quantum era brings challenges too.

soluptas mint

The numbers are huge. IBM published its Cost of a Data Breach Report, based on research carried out by the independent Ponemon Institute earlier this year.

This looked at 604 organisations worldwide that had been impacted by data breaches between March 2023 and February 2024.

It found the average total cost of a breach jumped to $4.88m (£3.77m) in February this year, from $4.45m (£3.744m) in 2023, a 10% spike and the highest increase since the pandemic.

The report’s researchers put this down to a rise in the cost of lost business, including operational downtime and lost customers, and the cost of post-breach responses, such as staﬃng customer service help desks and paying higher regulatory ﬁnes.

“Hackers are already using AI to develop more effective spearfishing tactics, analyse files containing customer data, mimic customer voices and activate fraudulent transactions using these fake voices,” note Bell and Hidary.

The next step will be adding – or compounding – quantum into this mix. Financial institutions around the world are now preparing for when large-scale quantum computers with powerful error correction have the potential to crack the asymmetric encryption methods used as the “bedrock of communications” for the banking industry, according to Bell and Hidary.

That day is still some years away, but Bell disclosed that HSBC and other leading banks are taking proactive steps to modernise cryptography management.

STEVE CARRUTHERS is business development director at MSO Mortgages

By contrast, organisations that deployed AI extensively across prevention workﬂows saved $2.2m (£1.7m) in breach costs on average compared to those with no AI use in prevention workﬂows.

Paradigm shift

An article authored by Colin Bell, CEO at HSBC Bank and HSBC Europe, and Jack Hidary, CEO at SandboxAQ, as part of this year’s World Economic Forum Annual Meeting casts another light on this.

They argue that the ﬁnancial sector’s high density of data and communications makes it ripe for both improvement and a ack by AI tools. Even greater transformation in this sector is now coming with the fusion of AI and quantum technologies.

While this technology ups the ante for financial services firms resisting cybera ack, there is a window now to explore how quantum computing, allied with AI, can create security systems that are far, far harder to hack – protecting customers’ data and firms’ reputations and balance sheets.

Our own research found lenders’ views of the risk presented by cybercrime and digital fraud varied according to the size of their perceived potential exposure. In many cases, smaller lenders pointed to their investment in InfoSec posts and the building of speciﬁc departments to address threats.

On the upside, they write: “Machine learning algorithms can now analyse vast data sets in real time, providing deeper insights into market trends, risk assessments and customer behaviour. AI-driven tools have streamlined operations, improved customer service and enhanced investment decision-making.”

For larger lenders, provisions and huge infrastructure investments formed a large part of their response. For the high street lenders, there was total agreement on the need for cyber security and its impact on their willingness to integrate and exchange with third-party systems. The speed of technological change is exponential, and with it, cybersecurity and digital fraud threats grow year-on-year.

The consensus view among the 43 lenders we spoke to this year was that cybersecurity and fraud would not deter them from doing the right thing commercially, but that they are already a signiﬁcant hurdle for those coming to market with new products. ●

In the UK mortgage market, the use of machine learning is primarily focused on the customer and their experience – be that broker service, customer service or the assessment of individual borrower attributes and how those could or should in uence product design”

Bene t from AI today, not tomorrow

It’s been almost two years since the initial release of ChatGPT and the advent of large language models (LLMs). Since then, artificial intelligence (AI) has seen the quickest technology adoption in history. It took only two months for ChatGPT to gain 100 million users. Meanwhile, the landscape for smart assistants has flourished – Microso , Google, Apple, Anthropic, X and many others now offer their own language model services.

AI has undoubtedly already had a massive impact in certain sectors, such as education. However, despite multiple articles claiming that job automation is just around the corner in every single sector, many of us are yet to feel any change in the way we work because of AI. This is especially true for professionals in somewhat more conservative industries such as ﬁnance.

Does this mean that LLMs are overhyped and real disruption is decades in the future?

There are a good number of wellresearched studies examining the beneﬁts of using AI. A randomised

Despite multiple articles claiming that job automation is just around the corner in every single sector, many of us are yet to feel any change in the way we work”

controlled trial conducted by Microso , for example, shows that so ware developers with access to AI-powered tools can complete their tasks 56% faster than a control group of similarly skilled developers.

At the same time, MIT researchers found that general writing tasks can be completed 40% faster and with 18% be er quality when assisted by AI. Another team at Stanford has measured a 14% improvement in customer service tasks.

Finally, a controlled study of BCG consultants found that giving their employees access to LLMs drives up

GEORGI DEMIREV is an AI PhD candidate and co-founder of nbryte

performance by 25% and quality improves by 40%. Taken together, these figures point to potential 30% to 40% productivity gains already available to most professionals. This productivity boost can be further improved by integrating AI within systems that are already being used for day-to-day work. The so ware development industry is an early adopter in this area, with tools like GitHub Copilot and Cursor allowing programmers to delegate large parts of their code writing to AI. Other industries are soon to follow, with large venture capital investments flowing into specialised AI assistants for finance, HR, product management, sales, marketing, healthcare, and real estate, among many others. According to research by OpenAI, such specialised tools integrating AI vertically can affect up to 50% of the work performed by certain professions.

Where does all this leave mortgage brokerage? It remains to be seen, as companies that try to adapt the technology to speciﬁc use cases are just now entering the market.

News of the advent of AI is o en accompanied with warnings of jobs being automated. However, such worries might be over-emphasised.

According to recent Nobel laureate Daron Acemoglu, the impact of AI on jobs depends on whether automation goes hand in hand with the creation of new tasks for the aﬀected professions or not.

In a profession where success is driven by providing high quality advice to borrowers, AI can free time for mortgage brokers to focus on high-value-added activities instead of admin work, rather than to take people’s jobs away. ●

AI can free time for mortgage brokers to focus on value-added activities

Keeping pace with market changes

The mortgage market hasn’t exactly been a calm, predictable environment in recent years. With fluctuating rates, evolving regulatory demands, and shifting customer expectations, lenders have reacted quickly to market changes to remain competitive.

However, legacy systems often limit a lender’s ability to respond rapidly, slowing down new product launches or adjustments to meet market demands. This is where modern tech steps in, offering the flexibility needed to act faster without the extensive modifications traditional systems require.

We’re already starting to see the property market pick up steam, with pent-up demand and the prospect of a base rate cut boosting buyer confidence. As the outlook becomes more positive, and now that we have a more defined political and economic environment following the Budget, lenders must ensure they’re on the front foot to support borrowers in realising their aspirations.

Reacting to changes

Since mid-2024, mortgage rates have shown signs of stabilising, dipping below 4% at some points. Yet even small rate adjustments can significantly influence borrower affordability and the appeal of various mortgage products.

To meet this demand, lenders have expanded their offerings to nearly 6,700 products – almost triple the 2,258 options available in October 2022, according to Moneyfacts. This surge in product variety highlights the need for flexibility, as minor rate changes can shift borrower demand and make tailored mortgage options more attractive.

Despite signs of the market stabilising, many borrowers are still refinancing as their fixed-

rate deals conclude. To manage higher repayment costs, borrowers frequently choose product transfers, which let them adjust terms with their current lender without additional affordability checks.

In Q2 2024, 82% of refinancing was conducted through product transfers, as borrowers aimed to ease the financial impact of moving from lower fixed-rate deals.

Flexible technology is essential for lenders to handle these conditions effectively. This allows lenders to manage quick-turn transfers efficiently, update pricing, adapt loan terms, and launch time-sensitive products with the precision needed to stay competitive.

Rather than waiting weeks, lenders can make updates within hours, meeting demand for tailored solutions and positioning themselves as agile in a fast-paced market.

Adapting to expectations

Today’s borrowers now expect speed and simplicity across all financial experiences. Quick decisions and tailored solutions are increasingly essential, but legacy systems often create delays and overly manual processes, frustrating both borrowers and lenders. Technology plays a key role in addressing these challenges, with real-time data integration and automating the application process resulting in faster, more personalised lending decisions.

For borrowers with complex credit profiles, high-tech lending platforms also provide lenders with secure access to detailed financial data – from credit histories to affordability assessments – without manual input, while Open Banking allows for a much clearer view of a borrower’s financial situation, and more informed decisions around risk and affordability.

Beyond data-sharing, by automating steps in both the application and the

JOSH SKELDING is commercial director at Fignum

underwriting process, configurable technology reduces the risk of manual errors which is a real advantage.

This results in a more streamlined customer journey, meeting the demand for transparency and building stronger customer relationships.

Navigating compliance

Mortgage lenders face constant regulatory changes, with new rules impacting affordability assessments, reporting requirements, and data protection standards.

For those using legacy systems, adapting to these updates can be slow and costly, requiring extensive IT support and hindering their ability to maintain compliance.

Configurable platforms simplify this process, enabling lenders to quickly adjust to new rules without costly or disruptive overhauls.

When affordability criteria shifts, or new reporting standards emerge, the technology lets lenders make realtime adjustments, keeping operations streamlined.

Lenders can also strengthen data security as needed, helping them avoid penalties and maintain operational continuity.

Building for the future

Looking ahead, it’s clear that the demands on lenders are only set to grow further.

With AI, automation, and evolving customer expectations reshaping the industry, the strength of configurable technology lies in its future-readiness.

It’s not only about handling today’s challenges efficiently; it’s about equipping lenders to adapt smoothly to whatever comes next, keeping them flexible and prepared to take on whatever the new year has in store. ●

Customer service in the tech era

Once I asked artificial intelligence (AI) about the best way to serve mortgage customers, and received the following answer:

1. Personalised service: Understand the clients’ individual needs, financial and social situation; suggest products that best fit their circumstances and future plans.

2. Clear and transparent communication: Explain complex processes in an easy-to-understand way, particularly to vulnerable clients; provide regular updates to alleviate stress and build confidence.

3. Leverage technology for efficiency: Customer relationship management (CRM) systems facilitate better data management and automated reminders, among others; digital tools such as client apps, online calculators or client portals help customers engage more.

4. Proactive problem-solving: Address potential issues early to ensure a smoother process and demonstrate expertise; maintain compliance, which also reassures the customer of their protection.

5. Exceptional customer support: Quick response times; flexible availability, for example by providing multiple channels of communication or by being available outside of traditional working hours.

6. Post-completion engagement: Continued support via ongoing communication even after the deal is done, such as annual check-ins or mortgage rate reviews, helps build loyalty and may lead to future referrals; remortgage reminders can show that the broker is still available and looking to assist.

7. Feedback for continuous improvement: Post-transaction feedback allows brokers to adjust their services and improve the customer experience; being open to client

feedback ensures that the service remains client-centric.

The AI added: “Investing in the right systems and customer service tools is essential to support these efforts, as it enhances workflow efficiency, compliance and client engagement.”

Technology can help

There are various standalone apps and portals to engage with your clients, facilitate ID checks, collect fact-find info and documents, keep your clients in the loop regarding their transactions, and send reminders. Other apps and systems may also track interest rates or property values, offer affordability or criteria search, facilitate mortgage and insurance sourcing, or help you with email marketing.These functionalities, to varying extents, are also incorporated into CRM systems to bring the different elements under one roof.

CRMs can also automate certain other steps during the advising process such as creating compliance documents and getting them e-signed, tracking your team’s performance, accessing and summarising credit history, generating data for the Financial Conduct Authority (FCA) report, and so on.

The big void

There seem to be two areas where technology and AI can only get so far: the actual advice process and our innate need for human interaction.

We can automate some of the mortgage processes: fact-finding, collecting preferences, reviewing documents, collecting data from HMRC, Land Registry, Open Banking, credit referencing agencies, etcetera, automating sourcing and document generation, populating data for an application, sending out case updates, and post-completion communication.

The above works in an ideal world, where the client provides the correct information and documents, the

LILLA DILLIWAY is managing director at ClientTree

income is straightforward, their bank is on the Open Banking list, there is no income or deposit from abroad, the property is correctly registered with the Land Registry, the lender’s system info can be easily populated from the CRM data, the credit file is correct and the criteria is black and white.

As brokers will know from experience, this is hardly ever the case. Criteria is often more of a guide, where consideration can be given to circumstances, and exceptions can be made. AI needs clear guidelines and it cannot deal with ‘underwriter’s discretion’ or guess where criteria may be challenged. In addition, clients would often like to speak to a real person about their questions and concerns. They need explanation, guidance and reassurance from a human during the transaction.

Despite all the attempts to automate the advice and application process, brokers have an important role to play.

Best way forward

Alas, no one system will do everything for you. By exploring the available options, you will find a combination of systems that closely aligns with how you work.

Remember that customer service includes personalisation, and communication before, during and post-transaction, which can be automated to a large extent. However, it also includes problem solving, flexibility and answering questions that require your expertise and human touch.

Customers expect both – technology for efficiency and a human to help them. While staying within the regulatory framework, it is up to you how you deliver both aspects. ●

How tech is transforming mortgage advice

The ﬁnancial services industry, especially the mortgage sector, has transformed.

Particularly when it comes to artiﬁcial intelligence (AI), mortgage advisers are increasingly leaning on tech solutions to manage escalating workloads. However, this evolution is not without its challenges. Regulatory pressures, market uncertainties, rising interest rates, and the soaring cost of living have all impacted the mortgage market. So, how can technology help advisers tackle these challenges eﬀectively?

Shaping the future

One significant trend is the growing adoption of cloud-based solutions. This includes an emphasis on fast platforms allowing firms to streamline workflows, enhance collaboration, and securely manage large volumes of client data. By moving away from outdated systems, advisers can keep pace with the fastmoving market.

Firms are seeing value in end-toend practice management systems, as advisers take on multiple roles – from financial planner to client relationship manager, compliance overseer, and business developer. These comprehensive platforms that offer a single hub for managing client data, sourcing, and compliance can help firms increase productivity and reduce inefficiencies.

Digital engagement tools have emerged as essential for advisers. Clients expect real-time, convenient interactions. They want seamless access to ﬁnancial information through portals, whether updating mortgage applications or simply staying informed. Platforms must

integrate with client engagement tools, as they enhance service delivery and improve client experience.

At 360 Lifecycle, we’ve seen how cloud technology is empowering advisers. By Q3 2024, our platform reached more than 208,000 users, a 9% increase compared to Q3 2023.

Creating opportunities

With automation becoming more advanced, advisers can shi focus from administrative tasks to highervalue activities. This is where companies can provide real value by oﬀering tailored advice, moving beyond traditional manual operations.

There is a clear opportunity for firms to use data-driven insights to refine their offerings. By leveraging AI, platforms can predict client needs, identify trends, and recommend products tailored to individual circumstances.

With the increasing integration of application programming interfaces (APIs), ﬁrms can now sync data between multiple platforms and facilitate communication among various services in one space. By bringing together mortgage, protection and general insurance (GI) sourcing, advisers have everything they need to service clients. This streamlines the advice process, keeping advisers on track for their daily activities, saving time, costs, and increasing productivity.

While these advancements present opportunities, they come with challenges. One issue is increased regulations around data protection and compliance. With the GDPR and other frameworks in place, ﬁnancial ﬁrms need to ensure they are correctly handling client data. The rise of cyber threats further highlights the importance of security.

STEPHEN COWDELL is head of intermediary sales at

360 Lifecycle

Another challenge is the potential skills gap. As more firms adopt so ware solutions, there is a growing need for advisers and support staff. Without training and onboarding, firms risk underutilising their investments, which can undermine their overall effectiveness.

Staying competitive

Despite these challenges, the benefits of adopting outweigh the risks. Advisers who fail to embrace tech may find themselves falling behind. By investing in the right technology, firms can position themselves for long-term growth.

A key benefit offered by digital transformation is its scalability. As firms expand, they require a system capable of handling increasing client volumes without sacrificing service quality.

Flexible solutions allow advisers to adapt their oﬀerings along with business growth. At 360 Lifecycle, we have supported over £316bn in mortgage lending since 2010, enabling advisers to manage rising client volumes while maintaining high service levels.

The future of mortgage so ware is full of potential. The trends, opportunities, and challenges outlined indicate that ﬁrms need to take proactive steps to adapt.

Those that leverage technology effectively will not only improve their operational efficiency but also strengthen their client relationships. As the market continues to evolve, the ability to utilise the power of technology will be a defining factor in the success for firms. ●

How tech can help brokers tackle a volatile market

Mortgage brokers are having to be increasingly agile to navigate the current market. Two years of rate rises and soaring inﬂation have created an incredibly volatile lending environment. Just as brokers get a handle on product updates, rates shi again, leading to the inevitable lastminute withdrawing and replacing of products. Despite easing inﬂationary pressures and a potential cut in the base rate, brokers believe that this market volatility still has a while to play out, with their clients continuing to be impacted.

A endees to our recent Mortgage Vision roadshows have borne this out, saying that demand for complex lending remains high, with greater numbers of clients requiring specialist mortgage solutions which can’t be provided by high street lenders. Brokers are becoming increasingly creative in order to meet the evolving needs of their clients, brought on by market complexities.

A mortgage broker’s role to si through myriad products and criteria to ﬁnd the right lending solution is now more important than ever. It’s time consuming, meticulous work, and that’s before taking into account changing products, rates and criteria.

Key to broker success

This is where technology can do a signiﬁcant chunk of the heavy li ing for mortgage brokers. A reliable criteria search platform and sourcing tool, with up to date product information, can help brokers stay on top of last minute lender updates.

But such systems are only as useful as the information they store. There’s nothing worse for a broker than,

a er completing a full fact-find and sourcing exactly the right mortgage, discovering that the product they’ve presented to their client is no longer available or that the client doesn’t meet the recently changed criteria. Clients are le feeling deflated, brokers risk losing the deal, and broker-lender relationships can be negatively affected.

Technology providers have a duty to ensure their systems are ﬁt for purpose, to meet the demands of brokers and make their lives easier, rather than adding to their workloads.

Fragmentation dilemma

Over recent years we’ve seen a host of new providers entering the market, introducing new systems to brokers in order to make their lives easier. Despite best intentions, this has led to fragmentation.

25 years ago, there was one standard paper application form which was the basis for all mortgages. Now, products are more nuanced to meet the complex needs of borrowers, which has led to multiple application forms across various systems, all asking for the same information in slightly diﬀerent ways. Despite the variety of new technologies on the market, not one system has managed to tackle this fragmentation…yet. Watch this space.

Feedback from brokers who test our product development shows they want a system that is easy to use, visually uncomplicated, that can manage applications and paperwork quickly and accurately, and can take them through the whole process without endless to-ing and fro-ing between systems, numerous logins and constant re-keying.

As the market becomes ever more complex, we need to ﬁnd a solution to this fragmentation, and fast.

If you’re a broker looking to invest in new technology, the following tips could be helpful:

1 Choose a provider with a proven track record. Make sure they have experience, can provide positive client feedback, and have a strong reputation in the industry.

2 Look at their customer support and training. Can you contact them 24/7 through a variety of sources? Do they provide onboard training and refresher sessions? Can you access training videos?

3 Review your current systems to work out whether these needs are being met. How will a new system integrate with your existing tech infrastructure, and could it adapt and ex with market changes?

4 Prioritise technology with intuitive, user-friendly interfaces to make life easier. If you’re on the move a lot, maybe opt for a cloud-based solution so you can work exibly.

5 Choose a provider with robust data security measures which comply with industry standards. Data breaches are a serious concern, so this is a must.

6 Ask for their pricing structure up front. Is it transparent, allinclusive, with no hidden costs?

7 Opt for a provider whose system can help you to seamlessly stay on top of compliance requirements and auditing.

8 Chemistry! It’s important that you share the same values and your tech partner is as committed to innovation, development and growth as you are, as hopefully you’ll be in this together for a long time!

NEIL WYATT is sales and marketing director at Mortgage Brain

The winners and losers of the Budget

Following October’s Budget, when Chancellor Rachel Reeves set out her plans to repair the UK’s public ﬁnances and kick-start economic growth, we’ve taken time out to review what the announcements will mean for lenders, mortgage holders, aspirational homebuyers, and our partners across the mortgage industry.

This was Labour’s first Budget in 14 years, and we were pleased to see a number of announcements which should have a positive impact on the housing market.With £5bn confirmed for investment in development and construction, and an increase in funding for the affordable homes program, I feel positive that we are slowly moving in the right direction to help put homeownership within reach of more people.

We recently contributed to a report encouraging local authorities and developers to widen community consultation on planning developments to deliver on these housing targets, arguing that hearing from a more representative cross-section of voices earlier in the planning process will create a fairer system that reduces barriers to homeownership. This recommendation becomes even more relevant as additional investment is announced, and will encourage those in favour of reaching housing targets to have their opinions heard.

Building more homes – including aﬀordable ones – is a crucial part of solving the national housing crisis. The Government’s plan to build 1.5 million in the next four years will have a hugely positive impact on the mortgage industry, but we must continue to beat the drum for reform to the planning process, which could become a huge sticking point in making this a reality.

I was very pleased to see the Government’s commitment to social

and affordable housing and renewed interest in building, but our country needs to develop a long-term and joined-up plan to improve stability in the housing market if we are to solve the problem. This needs to be focused on delivering more homes, supporting first-time buyers to save for their deposit, and extending affordable routes into homeownership.

Rush to complete

The decision to remove the temporary increase to Stamp Duty thresholds could impact progress, as we anticipate a rush to complete purchases before the changes kick in, leading to a potential dip in activity once the threshold rises.

The decision not to increase the thresholds at which people start paying Stamp Duty will mean buyers will have to pay on 93% of the houses currently on the market in England, up from 70% under current rules.

The changes to Stamp Duty were introduced in Liz Truss’s 2022 miniBudget and are due to end at the end of March. At that point the tax-free threshold for all homebuyers will return to £125,000 from £250,000 and for ﬁrst-time buyers to £300,000 from £425,000.

The average ﬁrst-time buyer renting privately in London will need to save for up to an additional 12 months to aﬀord their own property, on top of the average 25.8 years that we calculate it would likely take them to save the initial average deposit in London while privately renting.

This clearly has huge repercussions for the mortgage industry, and means that we all need to work together to support people stepping onto and up the property ladder. Brokers play a hugely important role in guiding clients through the complexities of the market and advising them on how best to overcome the challenges they face.

At Leeds Building Society, we have made a number of decisions to break

MARTESE CARTON is director of mortgage distribution at Leeds Building Society

down the barriers that are holding people back from ge ing onto the property ladder. In 2022, for example, we became the ﬁrst national mortgage lender to stop providing mortgages for residential second homes to increase supply. Last year we launched new products and innovative collaborations designed to help people onto the housing ladder. These included our partnership with Experian to connect to its free Boost service, which allows people to improve their credit scores.

More recently, we went even further by announcing a decision to stop new loans on holiday let homes in North Yorkshire and North Norfolk as part of a 12-month trial.

We believe things must change if ownership is to become a realistic aspiration for more than a shrinking number of young adults with aboveaverage incomes and ﬁnancial support from their parents. Decades of under-delivery on housebuilding by consecutive Governments has led to a position where an imbalance in supply and demand has driven up the cost of homes and put signiﬁcant pressure on each and every tenure.

We all know the value that having a place to call home can add to our lives. As a mutual, we were set up to help people own their own home and save for their future, creating belonging in communities across the country. Although the Budget brought good news on construction and development, we need to work together within the mortgage community to support ﬁrst-time buyers and home movers who are facing increasing aﬀordability constraints which could hold up the progress of recovery in the housing market. ●

Creating a ordable rst-time buyer pathways

The landscape for ﬁrsttime buyers (FTBs) in the UK remains challenging, with aﬀordability and accessibility hurdles continuing to impact the market.

According to recent data from the Mortgage Advice Bureau, 36% of ﬁrst-time buyers are delaying their property purchases due to rising housing prices, higher interest rates, and the cost-of-living crisis.

These factors have created a complex environment, where many prospective buyers ﬁnd it increasingly diﬃcult to save for a deposit or secure a mortgage approval.

For mortgage intermediaries, understanding the nuances of these challenges and exploring alternative pathways like Shared Ownership is crucial to supporting ﬁrst-time buyers through these tough times.

A ordability pressures

A key barrier for first-time buyers is the rising cost of homes and mortgage payments. Rightmove’s latest data shows that the average mortgage payment for a typical FTB is now £931 per month, a significant increase from £578 five years ago.

While this is down from the peak in July 2023, it remains £353 more expensive than in 2019, primarily due to rising interest rates.

For many first-time buyers, these increased costs are having real consequences. More than a quarter (26%) have found it harder to get a mortgage approval due to higher rates, and 22% have taken on second jobs to cope with the financial strain. Some are extending their terms to reduce monthly payments, with the average term for first-time buyers now si ing at 31 years, up from 29 in 2019.

Exploring Shared Ownership

While the challenges for ﬁrst-time buyers are signiﬁcant, opportunities do exist for those willing to explore alternative options.

Shared Ownership is one such avenue, oﬀering an aﬀordable route onto the ladder for those borrowers who may be struggling to raise a larger deposit, or are happy to get onto the property ladder with a smaller equity share on a part rent, part buy basis.

This is a product where there is a high reliance on the advice process due to variations in product availability, criteria, and future borrowing requirements.

With lenders oﬀering increasingly competitive Shared Ownership products, intermediaries have a vital role in educating clients on how this option works and whether it ﬁts their long-term goals.

Market outlook

Regional disparities continue to play a significant role in the first-time buyer market and product selection. For example, the Rightmove data suggests that a typical starter home in London now costs nearly five-times the average annual salary of two people.

In the North West, the average monthly mortgage payment has risen by 75% compared to ﬁve years ago, and the average asking price for a home is up by 29% over the same period, the highest increase of any region.

In Yorkshire & The Humber, the average monthly mortgage payment is up by 74% compared with ﬁve years ago, while the average wage in the region is up by 25% – the biggest gap in wage growth and average mortgage payment increase across Great Britain over the past ﬁve years.

DAVID LOWNDS is head of products and marketing at Hanley Economic Building Society

Despite these challenges, we are seeing increasing interest levels from FTBs across pockets of the country as consumer conﬁdence appears to be on the up, and borrowers are reacting favourably to our quest to reduce upfront fees on our higher loan-tovalue (LTV) product range.

By working closely with lenders that all have their competitive edges and unique selling points from a product, criteria, underwriting or service standpoint, mortgage intermediaries can help ﬁrst-time buyers ﬁnd the most suitable and responsible solutions to achieve their homeownership goals.

Whether it’s through Shared Ownership, extended mortgage terms, or innovative ﬁnancing solutions, the right advice can make all the diﬀerence in helping clients onto the property ladder over the closing weeks of 2024 and into 2025.

e right advice can make all the di erence

Innovation is critical

At an average age of 33, and 36 for Londoners, the ﬁrsttime buyer age is continuing to creep up.

The process of securing a mortgage is fraught with ﬁnancial and logistical challenges, especially in today’s competitive property environment.

As property prices soar and traditional lending criteria tighten, many prospective homeowners struggle to navigate the complexities of mortgage approval. The need for more accessible and aﬀordable solutions has never been greater.

A combination of higher deposits and strict loan-to-income (LTI) ratios means many potential buyers ﬁnd themselves priced out of the market.

Rising property prices mean even modest homes are increasingly out of reach for those relying on conventional mortgage products.

This affordability gap is prompting financial institutions to innovate, creating new mortgage products tailored to the unique needs of today’s first-time buyers.

The issue of outdated mortgage solutions doesn’t stop at ﬁrst-time buyers. Mortgage rate shock is a reality for numerous individuals now as they’re seeing their 1% mortgage terms come to an end amid dramatic interest rate rises over the last two years.

While news that the Bank of England has cut interest rates – the ﬁrst time in over four years – does bring relief to many homeowners, there is more that the lending market

can do to support them. Whether it be longer-term, reduced deposits or family mortgages, there is ample opportunity for innovative products to provide greater ﬂexibility and accessibility for ﬁrst-time buyers.

Embracing longer terms

One innovation in the market is the introduction of longer-term mortgages.

Gone are the days when 25-year mortgages were the norm. In fact, recent data from UK Finance has shown that by the end of 2023, one in ﬁve ﬁrst-time buyers were opting for mortgages extending over 35 years. These extended terms reduce monthly payments, making homeownership more feasible for buyers with limited monthly budgets.

Offering borrowers fixed interest rates across the entire life of the loan adds promise to this product. The approach empowers individuals with predictability and stability, shielding them from the volatility associated with short-term fixedrate mortgages that is now crippling homeowners as interest rates have dramatically changed.

Some critics argue that longerterm mortgages can extend debt into retirement, which can be challenging. Traditionally, the goal in the UK has been to pay oﬀ mortgages before retirement, but this mindset is evolving. With increased life expectancy and changing employment pa erns, the lending market must adapt to these changing circumstances.

This could include options such as lifetime mortgages, equity release schemes, or adjustable-term loans that consider the borrower’s retirement income and assets.

Borrowing capacity

Dutch lender April is leading the charge with a new mortgage product set to disrupt the UK market. Its offering, designed for first-time buyers with 5% deposits, offers fixedrate mortgages of 5- to 15-years that decrease as borrowers pay off their loans. This enables homeowners to switch to a lower loan-to-value (LTV) band, and therefore pay a reduced rate of interest, as their loan decreases.

Historically, homeowners could only achieve this when they remortgaged. This adjustment can signiﬁcantly boost borrowing capacity, enabling buyers access to properties that would otherwise be una ainable.

In a time where many consumers are grappling with lengthy and stagnant mortgage loans, the proposed benefits in democratising access to homeownership and enhancing financial flexibility for borrowers are huge. The opportunity to see the full loan value decrease over time, pu ing pennies back into the pockets of consumers, is certainly a positive step forward in reducing overall debt for individuals in a sustainable way.

By decoupling principal repayments from the mortgage itself, these mortgage products empower

borrowers to allocate their ﬁnancial resources more strategically, potentially saving towards newer properties or home improvements, thereby enhancing their own longterm ﬁnancial stability.

However, caution is key. While the allure of flexibility and possible cost savings offered by these new solutions are appealing, they are o en accompanied by complexities and risks that require informed decision-making and prudent financial management. Borrowers must meticulously assess their risk tolerance, investment strategies, and long-term financial goals to determine whether these mortgages align with their individual circumstances.

Family nances

Family mortgages represent another pivotal innovation, leveraging the support of relatives to enhance the borrowing power of ﬁrst-time buyers.

These arrangements can involve various forms of assistance from family members, each tailored to meet different financial needs and situations. For instance, relatives can provide part of the down payment, or act as guarantors. This approach can significantly increase a buyer’s borrowing capacity to secure be er loan terms.

By drawing on the collective strength of family finances, these mortgages provide a practical path forward for first-time buyers, bridging the gap between aspiration and affordability.

While this may be a feasible option for some, it is not a long-term ﬁx for our crisis in housing aﬀordability, and it also highlights the need for broader systemic change.

Those without the ﬁnancial backing of family remain locked out of the market, and at a disadvantage.

Labour’s vision

While innovative mortgage products undoubtedly play a crucial role in making homeownership more a ainable, they alone are not a panacea.

The broader challenge of mortgage accessibility remains, necessitating comprehensive action to ensure that potential homeowners can actually ﬁnd aﬀordable properties.

ANDREW FISHER is chief growth o cer at Aro

One primary strategy for improving housing aﬀordability is increasing the supply of homes. Labour recognises that, without signiﬁcant boosting of housing construction, the imbalance between demand and supply will persist, driving up property prices and making homeownership out of reach for many.

Deputy Prime Minister Angela Rayner has unveiled a planning system overhaul, as part of the pledge to deliver 1.5 million homes over the next ﬁve years.

Labour’s strategy includes measures to streamline planning processes and remove bureaucratic obstacles that o en delay or obstruct new developments.

By facilitating faster construction, these reforms will help stabilise prices and make homeownership more accessible to ﬁrst-time buyers.

Building a bridge

The path to homeownership for ﬁrst-time buyers can feel elusive, but it isn’t completely una ainable. By embracing innovative mortgage solutions, from longer-term loans to family-backed ﬁnancing, and increased support with Governmentled initiatives to increase housing supply, the mortgage landscape can work for homeowners.

Only with innovations in the lending market will we be able to encourage more homeownership and fundamentally reduce the average age of ﬁrst-time buyers. ●

Reasons to be cheerful

In 1979, Ian Dury’s list of reasons to be cheerful did not include much on the economy, and 44 years later many would argue that is still the case. From a feeling of hope for the future as the new Government was ushered in, to an air that can only be described as gloomy at best. The Government has been steadily repeating the mantra so o en employed by newly appointed chief executives. Taxes have risen and the Budget had li le in it in terms of support ﬁscal support for the housing market as it stands today. But in terms of housing supply, there is much to be more optimistic about.

New-build

Labour has made housing one of its central policy pillars, and in the week before the Budget, it published its response to the Competition and Market’s Authority’s (CMA) housebuilding study.

The plans include a new consumer code for housebuilders and a new Homes Ombudsman Service, which will aim to “empower homeowners to rightly challenge developers for any quality issues they face in their homes.”

The Budget itself promised £5bn of funding for new-builds, with support for smaller developers, too. Housing and Planning Minister Ma hew Pennycook has also promised to consider the best way to address the injustice of ‘ﬂeecehold’ private estates to bring unfair costs to an end. An updated National Planning Policy Framework and the reinstatement of mandatory housing targets for councils have also been conﬁrmed.

These developments are good news for mortgage brokers, not least because ﬁrst-time buyers will need help navigating the mortgage process for new-build homes.

Over the summer, a number of lenders upped their loan-to-value

(LTV) limits for new-build, just as the Bank of England voted to cut the base rate from 5.25% to 5%.

Aﬀordability in the new-build sector has improved, and presents a real opportunity for intermediaries in the new year.

Buy-to-let

The private rented sector (PRS) has been in the limelight for almost 10 years now, with 2025 marking a decade since former Chancellor George Osborne ﬁrst announced the withdrawal of tax relief on buy-to-let (BTL) mortgage interest.

Many regulatory and prudential capital changes have followed, and along with higher mortgage rates over the past three years, the commercial dynamics have shi ed. Many landlords have exited the market – something the media has made a lot of noise about. However, we are of the view that BTL looks set for a brighter future. Osborne’s stated aim back in 2015 was to bring in larger professional landlords, improving the quality and consistency of private rented accommodation.

This has begun to happen, with a strong focus on purpose built student accommodation (PBSA) in particular. While turnover in the buy-to-let market has been fuelled by all that change, it has now mainly ﬁltered through. The Budget changes in Stamp Duty surcharges for second homes and Capital Gains Tax (CGT) will not have helped the sector, however, and will further discourage smaller landlords.

The prospect of so much new housebuilding and Labour’s promised new town plans oﬀers an a ractive proposition for landlords looking to invest today, going into the market with their commercials in line with the current environment.

Structuring those deals and portfolio management is likely to be a bright spot for intermediaries over the next 12 months.

LISA MARTIN is development director at TMA

Protection

Higher taxes are likely to have an indirect eﬀect on mortgage aﬀordability eventually, though we are not expecting this to dampen demand in a meaningful way. Interest rates may not go as low as everyone has previously expected.

What we do see is an even stronger market for income protection, critical illness cover and life cover. Association of British Insurers (ABI) ﬁgures show that a record number of people took out income protection to protect their ﬁnances against the risk of a serious accident or illness stopping them working last year. Standalone critical illness sales were almost four times higher than 10 years ago.

Together, sales of new individual income protection policies hit 247,000 last year, a 16% increase on 2022 and the highest level since the ABI started collecting the data in 2000.

A whopping 97% of those individual income protection products were sold with advice, highlighting the important role advisers have to play in increasing consumers’ ﬁnancial resilience.

Looking ahead

There is no doubt that the economy could be in be er shape, but there is plenty to be upbeat about.

The housing market is resilient, demand outweighs supply and will continue to, even if the Government manages to deliver 1.5 million new homes over the next ﬁve years.

Personal and household ﬁnances, meanwhile, are ge ing more complicated. The need for independent ﬁnancial and mortgage advice is growing. ●

Say goodbye to square selfemployed pegs

Traditionally, selfemployed individuals and those with irregular incomes have faced significant obstacles in obtaining a mortgage, finding it challenging to prove consistent income levels that satisfied lending requirements.

Thankfully, the mortgage landscape has evolved signiﬁcantly, and specialist lenders continue to play a pivotal role in helping ensure that mortgages are more accessible for this key demographic. A shi which comes at a critical time in light of a few key trends.

With this in mind, it was interesting to see the latest ‘Property and Homemover Report’ from TwentyCi chart the rising proﬁle and performance of self-employed estate agents.

Self-employed agents increased their market share of property

exchanges to 2% during the third quarter of 2024, up from 1.6% in the same period of 2023, representing a 25% rise year-on-year.

Since 2019, self-employed agents’ market share has reportedly expanded more than sevenfold, underlining the growing success of this ﬂexible business model in the dynamic property sector.

This growth mirrors broader trends seen across various industries, where self-employment has surged as a viable career path, particularly in response to the shi ing demands of the UK workforce.

Complex pro les

To support this increasing segment, specialist lenders have been stepping in to address the unique needs of selfemployed individuals, particularly those with variable incomes or complex ﬁnancial proﬁles, where mainstream lenders o en lack tailored solutions.

For example, when assessing a self-employed applicant who has been trading for three or more years, aﬀordability calculations could be based on the most recent year’s income if it’s higher than previous years. An accountant’s certiﬁcation can further support this approach, validating that the income is sustainable and helping the applicant meet the lender’s criteria.

This ability for underwriting teams to consider the bigger picture is crucial, especially for clients in a recent case that came across my desk. This involved two selfemployed individuals who struggled to remortgage a er their incomes ﬂuctuated during the pandemic. They also had a small, historical default on their credit report, which further complicated their case. While many

GRANT HENDRY is director of sales at Foundation Home Loans

mainstream lenders declined their application, we were able to take a more nuanced view. By focusing on overall aﬀordability rather than strict loan-to-income (LTI) ratios, we were able to provide a pound-for-pound remortgage option, on a part-andpart repayment basis. This not only addressed their immediate needs, but also put them in a stronger ﬁnancial position for the future, with the same monthly payment and an improved repayment structure.

Non-traditional

Historically, many brokers have expressed frustration when trying to fit self-employed clients into traditional lending models. A case that doesn’t fit a single criteria point may be rejected, even if the overall picture suggests the applicant is a low-risk borrower. Specialist lenders are equipped to offer solutions that fit these complex profiles, considering each application on its own merits, taking into account factors like fluctuating incomes, minor credit issues, or complex repayment needs.

With products designed for a variety of borrowers, from professionals and key workers to the self-employed and those with complex credit histories, specialist lenders are vital in ensuring that more people can access the mortgage products they need as the UK workforce continues to evolve.

The intermediary market needs to tap into this expertise to ensure that their clients have access to ﬂexible, tailored solutions to meet these increasingly diverse requirements.

The challenge to build 1.5 million homes

The debate around the need to build more homes has become almost as British as ﬁsh and chips, queuing and the Royal Family.

The target of 300,000 new homes a year, however, has proved a constant challenge. In fact, the last time that number was achieved was in 1976-77, when Abba topped the music charts –Mamma Mia!

The high point in recent years was in 2019-20, when we constructed 243,000 new homes, according to oﬃcial data.

As a result, we’re playing catch-up. Think-tank Centre for Cities estimates that a shortfall of around four million homes has built up over the decades. So, while the Government pledge to build 1.5 million new homes should be applauded, it will be anything but a walk in the park.

Planning better

One of the biggest obstacles is our planning system. The Government recognises this and plans to give local authorities more autonomy, reducing or removing red tape to allow them to ramp up building. However, capacity remains a concern.

Even if it’s possible to ﬁx the planning system and unlock land for development, there is no guarantee the labour or materials would be available at a cost which provides a ractive margin for developers.

There are also plans to build on the so-called ‘grey belt’ – described as poor quality and ugly areas on protected land, such as disused car parks, derelict buildings and concrete wastelands.

While this could unlock more land, these areas o en lack infrastructure, straining nearby services. It’s also

For advisers, this is a huge opportunity to support rst-time buyers onto the property ladder, and raising awareness of the solutions available is paramount”

crucial that any developments meet quality standards. We’ve all heard horror stories of poorly repurposed oﬃce blocks lacking basic amenities like windows.

Quantity is important, but so is quality. Housebuilders need to construct the right homes in the right areas, using a green approach to ensure we have sustainable and energy-eﬃcient housing that lasts.

We should learn from history. Between 1946 and 1951 we built 1.2 million homes as a quick ﬁx, including more than 150,000 prefabricated houses. While those properties served a purpose at the time, many still require fairly extensive remediation work.

Therefore, we need to ensure any modern methods of construction (MMCs) used to build properties swi ly are sustainable and most importantly have longevity.

A ordability rst

Research consistently shows that the biggest challenge facing first-time buyers is affordability. Indeed, recent research by the Building Societies Association (BSA) shows affordability for first-time buyers is the most

STEPHANIE CHARMAN

is group partnerships and propositions director at Sesame Bankhall Group

expensive it has been for more than 70 years, with renting cheaper than buying in most parts of the country. Supporting ﬁrst-time buyers doesn’t stop at building new homes – they also need help buying them.

Shared Ownership could be a key component as a product solution. Though some still view it with scepticism, it’s a tried and tested product that could help thousands of borrowers if they were aware and educated about the beneﬁts.

For advisers, this is a huge opportunity to support ﬁrst-time buyers onto the property ladder, and raising awareness of the solutions available is paramount.

Ultimately, it’s clear that ambition alone won’t build the homes we need – collaboration is also needed, not just between developers and the Government, but with all stakeholders, including the mortgage industry, charities and others advocating for homebuyers. ●

Housebuilding: Collaboration is needed

Optimism for London despite the pressures

Notwithstanding the rather dour Budget, there are many reasons to be optimistic about the future of London and its ability to continue to a ract new residents to its streets, despite the cost-of-living pressures that are o en magniﬁed in the capital.

Figures show that the cost of private rent for both new and existing tenancies reached a record high of £2,114 in July 2024, up 9.7% in the last year, but this has showed signs of slowing down in the last quarter.

According to Rightmove, asking rents for new tenancies in London reached £2,661 a month in Q2 2024, with the annual growth in rent prices slowing to 3.7%, its lowest rate since 2021.

Una ordability

However, rents are still outpacing earnings growth, and therefore unaﬀordability remains an issue. Data from HomeLet shows Londoners starting new tenancies in July were spending 38.8% of their income on rent, down from its peak of 40% in February.

Demand for ﬂat shares reached its highest level since the pandemic with 19,250 rooms up for rent in July, according to data from Spareroom. com. The ﬁgure fell to 17,800 in midAugust, representing a 42% increase compared to the same period last year, while the number of people searching for rooms was down 28%.

Overall, the number of available rooms advertised for houseshares has maintained an increase since 2023, while the demand for rented rooms continues to ﬂuctuate.

When it comes to buying in the capital, data from Rightmove shows

that the average price of London homes coming to the market increased by 0.7% in the year to August, with an average asking price of £677,800. This is the ﬁrst year-on-year average house price increase since April 2023.

Most of this growth was seen in the outer London boroughs, including Bexley (5.1%), Redbridge (4.8%) and Greenwich (3.9%), while the biggest drops were in Westminster (22%), City of London (21%) and Hammersmith and Fulham (14.6%).

The most recent data for September shows that the upward trend continues, as asking prices in the capital rose by 1.8% in September, with an average house price of £694,906.

Attractive proposition

There is no doubt that it is one of the most challenging times for ﬁrst-time buyers wanting to get on the property ladder in London, and many may be waiting with bated breath to see how the October Budget aﬀects things long-term.

Initiatives such as the Freedom to Buy Scheme could oﬀer a lifeline to Londoners wanting to buy, but currently trapped in high rents. It is also hoped that there may be improvements made to the Lifetime ISA scheme by removing the outdated penalty for buying a home over the threshold. Whatever happens in the a ermath of the Budget, London remains an a ractive proposition with a strong economic outlook.

Accountancy ﬁrm EY forecast that the London economy is set to grow by 2% above every other region in the UK. It said that London and the South East would increase their overall contribution to the economy from 39% in 2023 to 40% in 2027.

This positive trend is also mirrored in this year’s ﬁgures from the London

ROBIN JOHNSON is managing director at KFH

Figures show that the cost of private rent for both new and existing tenancies reached a record high of £2,114 in July 2024, up 9.7% in the last year, but this has showed signs of slowing down in the last quarter”

Convention Bureau, which recorded £158m being added to the London economy from business events in the capital. The ﬁgures from January to September 2024 mark the highest record since the pandemic, and a 32% year on year increase.

Investment in retail is also moving in the right direction, as data from global real estate adviser CBRE shows Central London retail investment volumes increased 71% quarter on quarter, totalling £424m in Q2 2024.

So, while there is a feeling of uncertainty lurking in the property air at the moment, one thing that remains steadfast is London’s ability to keep drawing the crowds, whatever the weather.

Not only has the capital shown resilience in its ability to recover from the challenges of the past few years, all the signs are there that, despite the Chancellor’s best eﬀorts, it will also weather this most recent storm. ●

Lettings Index: Rental market under pressure

As we look ahead to 2025 and beyond, the rental market appears to be entering a new era. A er the record-breaking surge in rents we saw in 2023, growth has moderated somewhat – much to the relief of tenants. However, this cooling trend doesn’t mean an end to the challenges facing both renters and landlords.

While the pace of rental increases has slowed, rents are still rising faster than inﬂation. Our monthly Le ings Index suggests that the average rent on a newly let home in Great Britain rose 4.5% year-on-year to an average of £1,384 per calendar month (pcm) in September.

Our forecasts suggest this pa ern will continue, with rental growth likely to outpace both inﬂation and house price growth in the medium term. We think rents will rise a further 4.5% in 2025 and 4.0% in both 2026 and 2027. To put these ﬁgures into perspective, the longer-term annual rate of rental growth is 1.8%.

Tenants who have been occupying a home for a while may also face steep increases when renewing leases. O en, their previous rents were below open market rates, which have soared 25%, or by an average of £275 pcm, since 2021. These increases have cost the typical tenant an extra £3,294 a year. While strong income growth has helped ease some of the pain, many tenants have had to move to downsize or move to more aﬀordable areas.

Several factors are driving this sustained upward pressure on rents. Arguably, the biggest is the ongoing constraint on supply. Since 2016, private landlords have been selling more homes than those purchasing new buy-to-lets (BTLs). We estimate

that there’s been a net loss of around 309,000 private rental homes across Great Britain since then. With further tax and regulatory pressures on the horizon, this is unlikely to reverse anytime soon.

Second, there’s the impact of broader inflationary pressures. Higher mortgage costs and landlords’ inability to fully offset these payments when owning a property in their personal name have squeezed profits. While these stresses have eased a li le over the year as mortgage rates have fallen, mortgages remain expensive. This is also one of the reasons why a record 46,449 BTL limited companies were set up between January and September this year, as investors seek shelter from taxes on personal landlords. Furthermore, costs for property maintenance, management and insurance have risen, too. In many cases, landlords have a empted to pass some of these higher costs onto tenants. However, these efforts do not always succeed, given the squeeze on tenants’ finances from past rental increases and broader cost-ofliving changes.

Renters’ rights

The introduction of the Renters’ Rights Bill adds another layer of complexity to the market. While offering greater protections for tenants, it may inadvertently exacerbate the supply issues and put upward pressure on rents. Landlords, faced with longer eviction processes and more stringent regulations, may become increasingly selective about tenants or choose to exit the market altogether. This could create a two-tier rental market, where tenants with strong financial profiles find it easier to secure properties, while those with less stable incomes or poor credit

ANEISHA BEVERIDGE is head of research at Hamptons

histories face growing challenges. The Bill’s laudable aim of improving tenant security may, paradoxically, make it harder for some to ﬁnd rental accommodation.

Looking further ahead, the requirement for rental properties to achieve higher energy eﬃciency standards by 2030 looms large. While this is a positive step for sustainability and tenant comfort, it presents a signiﬁcant cost burden for some landlords, particularly those with older properties in regions where rents are lower.

Despite these challenges, there are some potential bright spots on the horizon. The gradual easing of mortgage rates could provide some relief to landlords, potentially slowing the pace of rent increases.

Additionally, changes to pension taxation and falling savings rates might make property investment comparatively more a ractive, potentially bringing new supply into the market. Gross yields are already at a record high of 7.1% in England and Wales, and with rental growth expected to continue outpacing house price growth for the foreseeable future, these ﬁgures should continue ticking upwards.

Overall, while we’re unlikely to see a return to the double-digit rent rises of recent years, the rental market remains under pressure. Balancing the needs of tenants for aﬀordable, secure housing with the economic realities faced by landlords will be a key challenge.

As we move into 2025 and beyond, policymakers will need to tread carefully to avoid unintended consequences that could further exacerbate housing challenges. ●

What the future holds for buy-to-let

The integration of technology in the buy-to-let (BTL) sector is rapidly evolving. We are already seeing faster, easier and more cost-eﬀective decisions and processes as a result.

While digitisation is beneﬁ ing lenders, brokers and landlords alike, evolving developments, such as artiﬁcial intelligence (AI) and Open Banking, are set to bring a seismic shi to the sector.

Technology is the catalyst for lenders to offer a more customerfocused experience, building partnerships with brokers and borrowers. A tech-first approach means lenders can be quicker to respond to the demands of the market and much be more agile to find efficiencies and cost savings for brokers and their clients.

A key part of this as a buy-to-let lender is an in-house broker portal. This oﬀers the ability to be responsive, all while fully independent –sidestepping the need to queue up for systems changes behind other lenders using the same technology ﬁrm.

Alongside important improvements to how we engage with brokers, there are many other parts of the mortgage process that need drastic transformation. In particular, those that traditionally have become mired in paperwork.

A good example is conveyancing. Still heavily dependent on paper and bureaucracy, it is notoriously slow as a result. Conveyancing is clearly ripe for innovation, and we have focused on building an eConveyancing platform this year. This has helped improve the conveyancing component in the case lifecycle, with a goal to make time from oﬀer to completion faster.

The platform has achieved improved communication channels and be er transparency on the status and management of oﬀer conditions

for external conveyancers. We are also seeing faster notiﬁcations of completion when funds have been transferred. Next steps for the future include providing a slicker, digitised signing process between conveyancers and applicants. Wet signatures should really have no place in the 21st Century.

We’ve also improved the application fee journey. Brokers can pay fees across a portfolio, and the status of application fee payments is more transparent. Brokers are also now beneﬁ ing from an improved telephony journey, which includes receiving an automated case status update and the ability to self-verify their identity during phone calls.

Another area of innovation is the use of automated valuation models (AVMs) in the BTL space, helping to drive efficiencies and speed up offer times. Earlier this year, Landbay became the first mainstream BTL lender to add AVM products, and recently we launched a new range of 2-year and 5-year 75% loan-to-value (LTV) AVM products.

Looking ahead

We are already working on using artiﬁcial intelligence (AI), machine learning and document reading to help underwriters be more eﬃcient and to process supporting documents. Extracting key information stored in documents can then lead to a faster processing of cases.

Integrations between sourcing systems, broker customer relationship management (CRM) systems, and our platform are going to be a crucial step for us in making the application submission journey even more user-friendly. In addition, we will introduce a more intuitive way to run aﬀordability calculations across multiple mortgage products.

Improved and integrated background portfolio submission is also one of our goals, as well as

JOEL VINNICOMBE is product director at Landbay

continuing to work on be er transparency of communication between ourselves, brokers, and case managers.

The future is here now with AI. But there are several other trends that will make a transformational diﬀerence, and we are looking at these carefully.

Open Banking is particularly promising, and will play an increasingly important role. It will reduce the mountainous levels of supporting documents that are required to provide evidence, such as mortgage payments and bank statements. It will also provide a smoother experience for identifying incoming payments and transferring money between back oﬃce accounts, as well as changing the landscape of ways to pay application fees.

We are also keeping a close eye on developments in open property data, which will massively help speed up and simplify the mortgage process. Using various property data sources can speed up the underwrite and identify property issues earlier to reduce the amount of time wasted by brokers, applicants and underwriters on cases with property issues.

Open property data has the potential to add value to applicants because it oﬀers be er and fuller insights into their portfolios. This opens up opportunities for advice on improvements that landlords can make.

It is vital, though, that these developing technologies are driven by customer needs and only used for the right use cases.

Whatever happens in the future, the challenge for lenders and borrowers in the buy-to-let sector is to adapt and keep pace with new developments to best serve our customers. ●

HOUSE OF HORRORS?

THE INDUSTRY REACTS TO LABOUR’S ‘PAINFUL’ BUDGET

Marvin Onumonu

The nation braced itself for a di erent kind of fright ahead of Halloween this year. Labour’s highly anticipated rst Budget in 14 years, delivered by the rst female Chancellor in over 800 years of Treasury history, Rachel Reeves. The air was thick with rumoured changes in the lead up, but when the dust settled, it became clear that some pressing matters remained untouched.

One question, for example, looms large: what will take the place of the now defunct Help to Buy scheme? Another notable absence was the extension of the Stamp Duty Land Tax (SDLT) freeze for rst-time buyers. Despite plans to boost housing supply, critics noted the lack of direct support for these buyers that make up an essential part of the demand side of the equation.

In terms of measures that did materialise, Labour raised SDLT on second homes and investment properties from 3% to 5%, and adjusted Capital Gains Tax (CGT), leaving landlords grappling with more complexity at 18% for the lower rate and 24% for the higher. £500m was earmarked for 5,000 new a ordable social homes, bumping the A ordable Homes Programme to £3.1bn. Plus, a £3bn boost to energise small housebuilders and ramp up housing supply – a step towards the lofty goal of 1.5 million new homes in four years, though longterm plans remain unclear until 2025.

The Budget was certainly a mixed bag for the property sector. Dubbed the ‘Horror Budget’, the statement fell at a time when the ghosts of past statements continue to haunt this sector.

Kate Davies, the Intermediary Mortgage Lenders Association

No one expected Rachel Reeves’ rst Budget to solve the UK’s housing crisis in one fell swoop – but many were watching keenly for indicators of the direction of travel. Labour promised “the biggest increase in social and a ordable housing in a generation.” A laudable aim, but one which could require radical change, not just in how much the Government commits to housing, but where it is allocated.

Government spending on housing is at a record high, surpassing the amount spent during the ‘golden age’ of council housing in the mid1970s. In 1975-76, under Labour, the total was £22.3bn, with 95% spent on building homes and improving existing stock. In 2021-22, adjusting for in ation, the total was £30.5bn, but with 88% spent on housing bene t (£26.8bn).

This deliberate shift in policy, from investing in bricks and mortar to subsidising individuals, accelerated during the wholesale sell-o of council houses under Right to Buy schemes in the 1980s and 1990s, resulting in a massive fall in the number of social rented homes, and enormous growth in the private rented sector (PRS). The PRS now has the essential role of providing homes for 20% of UK households – but it does soak up a chunk of that £26.8bn bill.

For Labour to achieve its aims, it must strike the delicate balance of diverting billions from

subsidies and back into bricks and mortar without depriving people of the support they need to pay the rent.

Proposals to give an extra £500m to the A ordable Homes Programme and reduce Right to Buy discounts will make little di erence in the short-term, but they may signal a shift toward treating housing as national infrastructure.

Sonya Matharu, The Mortgage Atelier

The word “budget” has always had a bit of a PR problem – it tends to spark worry, whether in personal or public nances. But while this Budget isn’t perfect, it’s also not as drastic as many feared. It’s no surprise that reactions across the mortgage and property industry have been mixed.

We’re already feeling the e ects: buyers, particularly rst-time, are starting the process now to strengthen their chances of completing before the SDLT threshold changes next year; buy-to-let (BTL) investors are rethinking their strategies; and brokers are working at-out to help clients secure deals under tight deadlines.

incentive or support for small to medium (SME) housebuilders. These have historically been the backbone of the housing sector, but have faced unprecedented challenges over the past few years.

Since the announcement, there’s been no shortage of headline-grabbing questions. Will the rise in employers’ National Insurance (NI) slow job growth and make it harder for buyers to a ord mortgages? Will landlords leaving the market create more supply for rst-time buyers? Will rents go up? Will high interest rates keep demand subdued either way? These are all valid concerns, but it’s mostly speculation, and while dramatic headlines sell newspapers, they don’t necessarily help clients.

While buyers and investors are already responding to changes in Stamp Duty and rising costs, the real impact might only reveal itself over the next few years as these policies gradually shape buyer behaviour, property values, and housing supply. First-time buyers may nd a ordability remains a challenge, while BTL investors could face tough decisions.

For now, the best approach is to remain focused on serving clients’ immediate needs and guiding them through this period of change. The full picture will become clearer with time.

Yann Murciano, BLEND

A critical reassessment of the systemic challenges they face is long overdue, and we were hoping to see some concrete, targeted and well-de ned measures to support them. On the contrary, the increase in employer NI will be a further cost burden on SME housebuilders.

We welcome the boost in cash for the A ordable Homes Program, but retain serious doubts about how those homes will be delivered.

how will

Amir Firdaus, O a

BTL landlords across the country must have breathed a sigh of relief that residential property was exempt from the CGT hike.

As a provider of ethical Islamic property nance, we also welcome the changes to alternative nance tax rules. This puts our products on a level playing eld with conventional nancing in terms of tax treatment, meaning that customers entering into qualifying alternative re nancing arrangements no longer pay CGT, Corporation Tax or Income Tax.

Despite Labour’s ambitious plan to build 1.5 million homes, the housing market was left largely disappointed to see no

In more good news, the Chancellor also announced a £5bn investment to help deliver the 1.5 million homes promised over this Parliament, along with a £500m boost to the A ordable Homes Programme to build up to 5,000 additional a ordable homes. £3.2bn will also be put into the A ordable Homes Programme, with a further £3bn in support of the small house builders in the form of housing guarantee schemes to support the private housing market.

While there is a Stamp Duty hike for secondhome buyers and landlords from 3% to 5%, we hope that this Budget will be encouraging to everyone in the property market – from home buyers to landlords and tenants.

Neil Leitch, HTB

Thome buyers and landlords from 3% to 5%, we home

he Government has talked of delivering 1.5 million new homes over the next Parliamentary term, a laudable ambition and one that I support, but we are still sorely lacking in detail over how that target will be met. Unfortunately, the Budget did little to address this. While it is welcome that £5bn has been allocated to housing for 2025-26, an increase of £1bn on the previous year, and £50m has been set aside to ‘turbocharge’ planning reform, there

is little insight into what that reform will look like in practice.

Planning is undoubtedly a big issue, with departments underfunded and under-resourced. Addressing those problems is going to be fundamental, and while the extra money is welcome, it alone won’t spark a sizeable improvement in the planning process.

We also need greater attention from the Government on the labour situation. We have an ageing workforce in construction, exacerbated by the likes of Brexit and Covid-19. That shortage is having an obvious impact on both the cost and timescale involved in producing new homes. There’s no easy answer – you cannot simply click your ngers and produce more quality tradesmen – but without them, we have no chance of meeting the Government’s aspirations.

Sadly, this Budget felt like more of the same to me. Talking about wanting to build more homes is great, but it only gets you so far. We need to know how this money is going to be spent, and how the planning system will be reformed.

Matthew Parden, Marygold & Co.

This year’s pre-Budget buzz was packed with anxiety-inducing speculation. Many feared a sharp rise in CGT and rushed to sell their assets. But these barely materialised, leaving some to wonder why they’d panicked.

Despite a record-breaking £40bn tax increase, the material policy changes put forward by the Chancellor were surprisingly lacklustre. Exceptions may include the adjustments to Inheritance Tax (IHT), meaning that pensions inherited post-75 could face double taxation. Yet until these are set in stone, their impact remains unclear, especially with ongoing consultations.

A notable move is the 67% hike in SDLT for second homes. This higher rate may be intended to bene t rst-time buyers, but it’s uncertain whether it will ease their entry into the market and alleviate competition, or simply prompt investors to adjust their strategies.

Nick Hale, Movera

TFor small businesses, the Budget poses a di erent set of challenges. Hiring more tax collectors may close some gaps, but a more e ective solution could be helping businesses manage nances, such as ring-fencing tax liabilities in a dedicated account. Pursuing debts from empty co ers only winds businesses up, stunting growth in the process. A more balanced approach could foster compliance and stability.

Ultimately, much of this Budget feels like a ‘tax on the never-never’ – promising measures that aren’t yet de ned, leaving individuals and

businesses to anticipate unknowns. With so much left to nalise, the real impact of these changes remains a guessing game.

his Budget came with high expectations, heightened by concerns about an impending ‘ nancial blackhole’ and the di cult balance of managing both public nances and the cost-of-living crisis.

The Chancellor focused on themes like stability and growth, aiming to steady the nation’s nances while leaving room for economic opportunity. Yet this also meant tough choices, and nowhere is this more apparent than in the handling of support measures for the spluttering housing market.

The decision not to extend the increased nilrate threshold for rst-time buyers introduced uncertainty into an already strained sector. With the average house price in England hovering around £310,000, many rst-time buyers relied on this relief to o set rising costs. Now, the April 2025 deadline creates a ‘cli -edge’ e ect that could create a buying frenzy. This may in ate prices further in the short term, driving demand up temporarily, only to see a sharp dip.

Ahmed Bawa, Rosemount Financial Solutions (IFA)

Lpolicy addressing both supply and a ordability is

With no replacement schemes like Help to Buy on the horizon, a ordability remains a signi cant barrier. The emphasis on boosting housing supply is bene cial in theory, but without mechanisms to make these new homes accessible to average buyers, there is a risk of oversupply in the wrong market segments, deepening the a ordability crisis. Ultimately, a more balanced policy addressing both supply and a ordability is essential.

abour’s rst Budget has profound implications for this market. The reduced Stamp Duty threshold is a major blow for prospective rst-time buyers. From April 2025, about 20% of rst-time buyers will face Stamp Duty costs on their purchases, and that further tax outlay will inevitably make life harder for those hoping to access the housing ladder.

Additionally, with the O ce for Budget Responsibility (OBR) predicting a rise in in ation to 2.5% this year, the outlook for mortgage rates is mixed at best. They may rise in the short-term, or simply drop more gradually than expected, p

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both of which will make it harder for those saving to buy a rst home.

On the positive side, the Government committed to increasing the supply of a ordable housing, promising more options for those aiming to get on the property ladder. Alongside this, the Lifetime ISA allowance remains the same. While that’s not an improvement, it does provide a steady option for saving, although rising house prices may still outpace what many can save.

For investors, the picture has become less attractive. The additional SDLT on second homes has risen to 5%, and CGT on these properties has also increased. This combination will cause buyers to reconsider or back out of deals, putting pressure on sellers to lower prices, particularly given the changes were introduced with immediate e ect.

David Hannah, Cornerstone Tax

After weeks of speculation, the contents of the Autumn Budget came as little surprise to many. However, unexpected measures did sneak through the cracks, chie y the new 5% threshold in SDLT surcharges on second homes. Labour is also set to end the temporary nil rate increase in April. This will trigger a surge in transactions in early 2025, as buyers rush to complete before the new rate takes e ect, followed by a predicted slowdown.

occupiers desperate for a roof over their heads. An historic opportunity was missed. If the Government was committed to meeting housing target, it should have reinstated Multiple Dwellings Relief and scrapped the surcharge in its entirety.

Karl Wilkinson, Access Financial Services

DIn the meantime, many owner-occupiers will be una ected by this, unless they are unable to sell their existing main residence. The increase in the rate, which was already 40%, means Brits will be required to deposit 5% of the price of their new home while they wait for their old home to be sold. This drain on household liquidity will slow down the rate of purchases, with a break in a chain leading to a total collapse, as no purchasers upstream of the break will be able to a ord the 5% additional charge. Already impacted by the 3% surcharge and 2% non-resident surcharge, non-UK purchasers will now face a 7% disadvantage compared to UK resident owner-occupiers.

What is little realised is that the de nition of ‘non-resident’ includes British citizens who have been living overseas for some time. If they return to the UK and have been here less than six months, they will be required to pay the 2%. Furthermore, if they have invested capital in residential property globally, they will also face the 5% second home surcharge.

The changes will do little to increase housing stock or provide homes for the million-plus

espite Government e orts, the Autumn Budget hasn’t served rst-time buyers well. The Government’s plan to increase borrowing will lead to higher bond yields and a higher cost of borrowing across the economy. This will likely force lenders to raise mortgage rates. The OBR now projects that the average mortgage rate will increase from 3.7% to 4.5% over the next three years.

While it is positive news that the Mortgage Guarantee Scheme is permanently available to rst-time buyers, people still need to nd a 5% deposit. With prices and rents so high, even 5% will be unachievable for many people who don’t have access to the ‘Bank of Mum and Dad’.

Homeownership will remain a challenging goal for many in the foreseeable future without a solution that addresses the rst-time buyers’ deposit issue, such as a 0% deposit mortgage.

TSimon Webb, LiveMore

he Budget has meaningful implications for older borrowers, especially aged 55 and over who may be considering property purchases or equity release to support retirement. The emphasis on stability and growth, paired with an increase in support for a ordable housing, re ects a strong commitment to addressing long-term economic challenges.

For those nearing or in retirement, adjustments to Stamp Duty and CGT will require additional consideration, particularly for those managing second homes or BTLs, as they balance property investments with future nancial security. The Bank of England decision to reduce the base rate to 4.75% adds a welcome boost, providing relief to borrowers over 50 who may feel the strain of ongoing nancial pressures. Combined with Budget measures, like the 4.1% state pension increase from April 2025, this move enhances a ordability, giving older homeowners more exibility and stability to manage their mortgages and nances con dently. ●

The best is yet to come for bridging

Bridging is truly having its moment.

A er a few years of uncertainty, when many investors hesitated to move forward with their plans, 2024 has ushered in a wave of renewed conﬁdence in the market.

The latest ﬁgures from the Bridging & Development Lenders Association (BDLA) reveal just how vibrant the sector is. Total loan books for Q2 reached an all-time high of £8.4bn, surpassing the previous quarter’s record. Completions and applications are both on the rise, and if HTB’s own experience is anything to go by, Q3 was just as strong.

This isn’t just a short-term uptick – there’s a genuine and sustained appetite for bridging products. Investors are back, and they’re ready to make their moves.

New lenders seem to emerge every month, each one eager to carve out a slice of the pie. Some might ﬁnd this level of competition intimidating, but

at HTB, we see it as an opportunity to sharpen our focus, get creative, and push the boundaries of what’s possible. For brokers and their clients, this is fantastic news. It drives us all to deliver be er products, be er service, and ultimately, be er outcomes.

A bright future

The conditions are perfect for even more growth. Demand for rental properties is through the roof right now. Le ing agents are reporting up to nine potential tenants for every available rental property.

The Government may be making bold promises about ramping up housebuilding and reforming planning, but let’s be real – we won’t see the results of that for some time.

In the meantime, the private rented sector (PRS) is shouldering much of the burden, and savvy landlords are in prime position to thrive. With rents at record highs and capital growth on the horizon, there’s a clear path to success for those who understand the market. Investors looking to refurbish and sell

ALEX UPTON is managing director at Hampshire Trust Bank

are also seeing fantastic returns. In a market starved of quality properties, those who can turn a project around quickly are reaping the rewards. And guess what’s helping them achieve that? You’ve got it – bridging loans.

Right now, there’s a lot of optimism around bridging, and I believe it’s wellfounded. But the real magic happens when you work with a lender that doesn’t just understand bridging, but the whole property ﬁnance ecosystem.

We’ve built a reputation as the go-to lender for complex cases, and that’s not by accident. It’s thanks to our deep market knowledge, commitment to delivering on our promises, and unwavering focus on building longterm relationships.

So yes, bridging is booming. But trust me when I say – the best is yet to come. ●

Rags to riches: Are property training courses the answer?

For many, ﬁnancial freedom is the ultimate goal: having the time and ﬂexibility to live life on one’s own terms. The dream of a steady income while relaxing on a beach in Thailand is compelling. But how does one create that ‘money machine’ without a tech breakthrough, a big inheritance, or a successful business exit? For many aspiring investors, the answer seems to be property investment.

The allure of property as a path from ‘rags to riches’ is powerful, fuelled by stories of self-made moguls who built their wealth through real estate. From reality TV to social media and YouTube, property investment is o en presented as the ultimate wealthbuilding strategy.

Property training courses have become increasingly popular, oﬀering to teach the skills and strategies needed to achieve success. But with high costs, mixed quality, and sometimes unrealistic promises, many wonder: are these courses truly the answer to ﬁnancial freedom?

Property investment has a unique appeal. Unlike the stock market, which can feel metaphysical and unpredictable, property is tangible. A well-executed investment can generate steady income, oﬀer the security of a physical asset, and appreciate in value over time.

Training courses promise a step-bystep approach, guiding participants through strategies like rent-to-rent, buy, refurbish, rent, refinance (BRRR), flipping, and property development. Each strategy requires a different level of capital and risk tolerance, and courses o en cover essential topics like tax planning, financing options, and navigating the complexities of planning permission.

Property courses o en highlight success stories, showing those who built impressive portfolios starting from very li le. These narratives are compelling, but can sometimes gloss over crucial factors. Success in property investment o en hinges on timing, location, and even luck, rather than the strict application of speciﬁc techniques. Aspiring investors should approach these stories with a healthy dose of scepticism, viewing them as inspiration rather than guarantees. Treating property courses as ‘get rich quick’ schemes is risky and could lead to disappointment.

Course quality

One major challenge is the cost of these courses, which can run into thousands of pounds – capital that could instead go toward a ﬁrst investment project. Furthermore, the industry lacks regulation, meaning that course quality can vary widely. New investors must carefully vet course providers, as the lack of oversight makes it diﬃcult to ensure quality or reliability.

Property training courses can be valuable, especially for those entirely

new to the ﬁeld and seeking structured guidance. However, they’re not a one-size-ﬁts-all solution to wealth creation. True success in property investment requires more than education – it involves a realistic assessment of one’s risk tolerance, a clear strategic plan, and o en access to capital.

One of the most powerful assets in property is having a team. Networking is invaluable in connecting with experienced, knowledgeable individuals who can oﬀer guidance and even partnership opportunities.

Property is, in many ways, a peopledriven industry, and sometimes it’s who you know rather than what you know that can make all the diﬀerence. While property training courses can provide a foundation, success in real estate requires more than just a course. Aspiring investors should weigh the costs, do their research, and recognise that property is a journey that demands patience, dedication, and smart networking.

‘From rags to riches’ may be possible, but it requires more than just a ticket to a seminar; it takes strategic action and sustained eﬀort. ●

WILL CALITO is development nance executive at Magnet Capital

Treating property courses as ‘get rich quick’ schemes could lead to disappointment

Why businesses are looking to the Midlands

The Midlands is a region on the up, with business owners increasingly looking to the future in a more hopeful way. As conﬁdence has increased in the region, we are seeing more businesses look to raise external funding, to help them not just get through today, but make a success of tomorrow.

A new report from the British Business Bank, for example, found a signiﬁcant jump in the usage of external funding by small businesses across the country last year, with the East and West Midlands speciﬁcally cited as regions which had seen particularly large increases.

That appetite to borrow shows the renewed conﬁdence among businesses. For all the challenges they have faced in recent years – and there has been no shortage – it’s clear that they see a positive path ahead.

That optimism about their future prospects is encouraging them to push forward with securing the funding they need for their expansion plans.

A region on the up

This conﬁdence has been further buoyed by investment into the region. For example, a £14.5m funding package has been announced for the delivery of the ﬂagship West Midlands Investment Zone, a project which is predicted to deliver more than £5bn of investment and 30,000 new jobs in the area, while helping small to medium enterprises (SMEs) break into new supply chains.

This comes against the backdrop of the dramatic increase in development in the area as a result of HS2, and the introduction of high-speed rail between the Midlands and the capital. From residential and leisure spaces to

commercial zones, the region is seeing a sharp jump in interest from buyers, tenants and businesses, a trend that’s only likely to continue as we get closer to the actual launch of HS2.

That desire to be part of the boom in the Midlands means that ﬁrms in the area are feeling more conﬁdent about expanding, while businesses outside the region are looking at ways to tap into that positive feeling.

Setting down roots

Given this, it’s perhaps not surprising that we are seeing renewed appetite from potential owner-occupier businesses. In some cases, these will be ﬁrms that are currently tenants but want to set down longer-lasting roots in the area by purchasing their own premises.

In other cases, it will be ﬁrms that already own their premises, but are looking to expand, whether that’s increasing the size of their current base or adding branches in the Midlands to their existing setup.

We are particularly seeing this demand from professional businesses – the likes of dentists and architects. They can see the opportunity to secure premises at an aﬀordable price and are conﬁdent about expanding given the positive outlook economically.

However, if these businesses are to achieve their aims, they need to have access to the right commercial ﬁnance. They cannot do it alone, so they turn to mortgage brokers to help them access the funds required.

Fast and reliable

We know ﬁrst-hand that this o en means bridging ﬁnance. Buyers of all kinds want to move quickly, to secure the property as soon as possible, but that’s particularly true of business borrowers. They may

REBECCA

SALT is regional sales director –Midlands at Tuscan Capital

A new report from the British Business Bank found a signi cant jump in the usage of external funding by small businesses across the country last year”

face a tight deadline to secure the required premises, and so need to be able to utilise a lender that can deliver reliably, and quickly.

It’s a market that is not hugely well-served, so it’s been so exciting to expand our own proposition since our acquisition by Allica Bank, moving to provide loans of up to 70% of the vacant possession valuation, with maximum loans of up to £10m.

Given the growing interest among businesses for property purchases, it’s vital for brokers to pinpoint lenders that understand this market well and can deliver for their commercial clients, particularly for cases outside of the capital.

It’s an incredibly exciting time for businesses in the Midlands, but they need the assistance and understanding of brokers and lenders alike in order to truly take advantage. ●

The in uence of super-prime developments

Super-prime developments are increasingly shaping residential trends, with innovations once exclusive to high-end luxury homes now permeating mainstream living. Features previously reserved for ultrahigh-net-worth individuals (UHNWs), are slowly but surely ﬁnding their way into everyday homes.

This evolution of living standards typically begins with super-prime property developers willing to challenge tradition and explore ways to enhance both the quality and efficiency of our homes. Initially, these advances do carry a premium, reflecting the specialised expertise, materials and innovation behind them. As developers, it is important that we invest in these pioneering fields, as eventually the broader market will benefit, enhancing the way we live.

Technology plays a key part of this virtuous cycle, as we are all increasingly seeking tools that simplify our lives. As innovations gain popularity, they become more aﬀordable, making their way into the mainstream. For example, I have been integrating Crestron into properties for over 25 years now, something we continue to do at Valouran.

As the demand for convenience grows, tech companies have responded, developing accessible solutions for home automation, oﬀering specialised controls such as lighting and heating at aﬀordable price points, o en paired with a simple smartphone app.

A more design-focused example is slabwork marble, which has been a hallmark of high-end interiors for over 70 years, ﬁrst gaining popularity in luxury Italian homes in the 1950s.

The way in which high-end residential developments shape contemporary living through convenience, eﬃciency and enhanced quality can be further illustrated through the likes of swimming pools with low chlorine levels, initially favoured for being gentler on the skin and more environmentally friendly. Today, ozone and saltwater pools have gained popularity in the broader market, while highly chlorinated pools are becoming a thing of the past. Similarly, security systems that can be controlled via smartphones were once limited to ultra-luxury properties, and now aﬀordable options can even be found on the likes of Amazon. Multi-room audio systems followed a similar path.

Developing for the future

We anticipate that sustainability will be the next major development infiltrating homes on a broader scale. The luxury sector is at a pivotal point where sustainability is becoming more than just a trend – it is a competitive necessity. While the full integration of sustainability into all new developments may take time, the momentum is clear, and the future of luxury real estate is likely to be defined by, and in turn define, future sustainable practices.

While sustainability both in construction and operations has taken centre stage in recent years, ecoconscious and well-made buildings that will stand the test of time have always been at the core of what we do at Valouran. Even at the early stage of development, careful consideration goes into the carbon being produced by the development and over the building’s lifetime. We ask ourselves and our architectural teams how can we look to build the landmarks

ALEX MICHELIN is co-founder and CEO of Valouran

and listed buildings of the future, which won’t look outdated and have impeccable sustainability credentials.

We consider sustainability in all facets of the development cycle, from working with contractors who share in our high-level commitment to ethical supply chains and EMC, to sourcing local and sustainably sourced timber. This also extends to creating homes which are carbon eﬃcient in operation which beneﬁts both the climate and our residents.

Many of our discerning buyers are well educated from their own on the importance of reducing their carbon footprints. Employing sustainable methods of construction can be more costly – something we articulate to our buyers from the outset, while explaining the beneﬁts.

In the past, buyers measured a property’s value based on the aesthetics. Now, quality is inextricably linked to source, story and sustainability.

Developers have a vital role to play in pushing the boundaries to make sure that we are designing and building in the most sustainable way possible.

We can expect to see the luxury sector lead the way in adopting technologies such as rainwater harvesting, native plant landscaping and air source heat pumps, with eﬀorts to retroﬁt and retain existing structures also gaining traction.

With more investment ﬂowing into sustainability at the superprime level, these eco-conscious features will pave the way for wider sustainable living practises across the residential landscape. ●

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Delivering the right outcomes for housing

Green homes were largely passed over in the Budget. That’s not really a surprise. The direction of travel is already set, and in a Budget light on giveaways, funding green retroﬁts beyond initiatives like the Warm Homes Plan was always unlikely.

But there is a more signiﬁcant issue. 100,000 – that is the number of skilled people working in the UK’s building trades who have gone from the market over the past 16 years. Based on our analysis of Oﬃce of National Statistics (ONS) data, we calculate that those working as joiners, electricians, plumbers, plasterers and a wide range of other skilled trades make up 12% of the entire UK construction industry. They punch above their weight in numbers and are responsible for around a third of the value created by home building in the British economy.

We currently have around 150,000 people employed in trades relevant to retroﬁt, down a he y 40% from a high in 2008 when that number was close to 250,000.

There is a further underlying crisis in this sector: the lack of new entrants and a rapidly ageing workforce.

Paving the way

One of the Government’s ﬁrst pledges to the electorate was to “get Britain building again.” Deputy Prime Minister Angela Rayner, also responsible for housing, announced in July that all councils in England are to be given new, mandatory housing targets.

The aim is to pave the way to deliver 1.5 million more homes – tackling the most acute housing crisis in living memory. No one would disagree that the country needs to increase the

supply of housing drastically. The practicality of doing so comes down to more than just planning law, however.

The cost of building has increased dramatically. Labour costs have also risen, something that is likely to continue as the workforce with the requisite skills and experience retire.

Whatever the reasons, this has le the country on the backfoot when it comes to delivering on its aim to cut carbon emissions to net zero by 2050. Now add in the UK’s need to retroﬁt its aging housing stock if it is to get even close to hi ing net zero targets – around 16% of carbon emissions produced in this country come from our homes. The gap between the practical reality we face today and where we need to be is stark.

Earlier this year, CoreLogic completed the acquisition of Parity Projects, a leading provider of domestic property retrofit advisory services, tools and data. In 2020, Parity’s team of experts analysed the UK housing stock to identify the most cost-effective way to reach a minimum of Energy Performance Certificate (EPC) Band C by 2030, based on market prices at the time. They tested 2,400 options for each address to identify the challenges for retrofit deployment, and assigned a workload, defined by the trade and their time, to calculate the human resource needed to meet current Government targets to mitigate climate change.

The numbers were considerable, with Parity’s analysts identifying the need for a 139% rise in the number of people working in the domestic refurbishment sector to cover the additional work. That is equal to around 208,000 new jobs, all of which require training and qualiﬁcations.

The longer we leave it, the more enormous an undertaking it is, and

MARK BLACKWELL is COO at CoreLogic UK

the more personnel we will need. Now almost ﬁve years on, and halfway through the 10-year period they looked at, the severe shortage of skilled tradespeople is only too apparent to anyone who has tried to get any work done on their home. It is increasingly diﬃcult to recruit good delivery contractors – both for large project work and for private jobs.

Yet there is not a simple fix –developers must manage their supply to maintain their commercial viability. Demand from individuals to carry out and pay for sufficient retrofi ing to their own homes is low and unpredictable – especially as tradespeople tend to work relatively locally. They, too, must balance their investment in new people with the rising cost of employment.

The most effective approach to support new industries with high start-up costs in the past decade has been products policy and the feed-in tariff for renewable energy infrastructure. These gave the relevant markets a clear framework in which to innovate. We are ge ing there with the development of Trustmark and PAS 2035 to assure quality; it is the financial and legal imperatives that are missing.

If the Government truly wants to get Britain building again, it must not rely solely on targets. The housing crisis cannot be boiled down so simply. There is plenty of upside –hundreds of thousands of new jobs across all regions in the UK. Britain has a history of excellence in manufacturing, and Labour has an opportunity to get Britain working in one of its greatest areas of strength. ●

At a glance The Specialist Lending Study

This is now the ﬁ h year of our landmark ‘Specialist Lending Study’, which was originally launched as an ‘Adverse Credit Study’ in Autumn 2019.

The primary objective of the initial study was to quantify the number of people in Britain with a missed credit payment on their credit file, within the last three years, to provide a definitive figure for the number of people with recent adverse credit who might be rejected by a high street lender.

To do this, we worked with YouGov to carry out research among a demographically representative sample of the British adult population to ensure our results were statistically robust, and we have continued with this thorough approach, surveying more than 4,000 people this year.

Over the years, the study has grown in scope and reach, with this year’s edition covering topics including adverse credit, unsecured debt, employment types and income sources, buy-to-let (BTL), prospects for homeownership, second charge mortgages, and a itudes towards sustainability.

A primary focus for the most recent study was the cost of living and its ongoing squeeze on household ﬁnances. The ongoing economic situation is not only driving more people to turn to credit and leading to more missed payments, but it is also encouraging workers to take on additional sources of income and impacting homeownership prospects.

Cost of living

More than half (57%) of all respondents are continuing to see a decrease in their amount of disposable income. 61% are currently concerned about their ﬁnancial situation as a direct result of the cost-of-living crisis, while 78% think the current state of the economy will make it harder for them to get a mortgage in the future. These are both slightly down from the last study.

Nearly three-quarters (73%) of all respondents say that an increase of £100 in their monthly bills would have a signiﬁcant impact on their ﬁnances. A third (33%) have used a credit card or other borrowing to pay for food shopping or utilities in the past 12 months, and 6% have borrowed to pay their rent or mortgage. 32% of people have considered moving home to a

cheaper area, and 21% have considered downsizing. 34% of people say their ﬁnancial situation is negatively impacting their mental health.

Adverse credit

8.38 million people (16%) have experienced adverse credit in the past three years. This is the highest level since we launched our regular study.

Of all those who say they have missed a credit payment, nearly half (46%) have gone on to miss more than one payment.

1.09 million people with adverse credit are planning to buy a property in the next 12 months.

First-time buyers

Nearly seven in 10 (69%) of people who do not currently own their own home say that they would like to in the future. 22% think it will take more than ﬁve years for them to be in a ﬁnancial position where they can own their own home, while 36% think they will never be in a position to do so.

Saving for a deposit is cited as the biggest barrier to owning a property (32%). However, nearly 64% of respondents either don’t know the size of deposit they require, or think they need a deposit of 20% or more.

Remortgaging

4.2 million (8%) people have an existing mortgage deal that is coming to an end in the next 12 months.

More than 920,000 mortgage customers with adverse credit have a deal coming to an end over the same period.

Two-thirds (68%) of respondents are not aware of the diﬀerence between a product transfer and a remortgage, and 54% say they wouldn’t be interested in a product transfer from their existing lender, which might come at a higher rate, even if it meant they wouldn’t have to go through the full remortgage process.

Self-employment

Nearly three-quarters (72%) of selfemployed people think that their selfemployment makes it more diﬃcult to get a mortgage, with 46% of this group saying it makes it a lot more diﬃcult.

43% of self-employed people say their income has increased in the last year compared to the previous two years. 29% say their income has increased by 10% or more.

Complex income

7.34 million people (14%) say they earn income from more than one job, while 22% receive variable income from their employment.

Buy-to-let

More than half of BTL landlords with a mortgage (53%) have had to remortgage in the past 12 months, and 56% of those have seen their mortgage payments increase by more than 20%.

Outstanding debt

Nearly one in three (30%) people with adverse credit have outstanding debts of more than £5,000, and 41% say this debt has increased in the past 12 months.

42% of respondents with adverse credit are concerned that their level of outstanding debt today will negatively

impact their chances to get a mortgage in the future.

8% of all respondents say their minimum monthly required credit card payment has increased by £100 or more in the last 12 months.

Second charge

Nearly four in 10 people (39%) who have remortgaged in the last 12 months increased their borrowing, but only 12% would consider a second charge if they were raising money with additional borrowing secured on their home. 54% don’t know what option they would choose.

The main reason people would consider a second charge mortgage is for home improvements (51%), with the second being debt consolidation (30%).

Nearly one in three people (31%) would consider using money from a second charge mortgage to pay oﬀ debts if it would reduce their monthly credit payments.

Green mortgages

More than half of people (55%) would consider investing in home improvements to make their property more energy eﬃcient, but 46% have previously been put oﬀ doing this because of the costs involved.

However, 77% of those looking to buy a property in the next 12 months say that energy eﬃciency will be an important consideration in their decision.

Credit reports

Four in 10 (40%) are registered with a credit scoring platform, and this increases to 54% of people who have adverse credit.

68% of people say they know how to read and understand a credit report.

37% of people with adverse credit think they would need to wait three years or longer before applying for a mortgage having received a County Court Judgement (CCJ). 18% think

PAUL ADAMS is sales director at Pepper Money

they would need to wait longer than ﬁve years.

The role for brokers

Half of potential homebuyers with adverse credit (50%) would speak to a mortgage broker for advice on ge ing a mortgage, slightly down from the last study, when 54% said they would speak to a broker. The most popular ways of ﬁnding a broker are recommendations from family and friends (47%) and online research (46%).

The ability to access lenders that are not directly accessible to customers is the most popular reason for speaking to a broker (67%). This is followed by ﬁnding the best rate in the market (64%), and the professional advice they can oﬀer (58%).

The ﬁndings of the study underscore the profound challenges facing households in the current economic climate. Despite these hardships, there remains a robust aspiration for homeownership, even among those with adverse credit histories.

This presents an opportunity for mortgage brokers and specialist lenders to play a crucial role in navigating this complex ﬁnancial landscape. ●

Market snapshot: Record-breaking bridging growth

At the Bridging & Development Lenders Association (BDLA), we collect lending data from our members every quarter to provide an accurate snapshot of the lending landscape in our sector. We’ve been doing this since 2013, up until this year under our previous branding of the ASTL.

Our branding isn’t the only thing to change this year, as we’re also shaking up the way we collect and present our data, to provide the market with more up-to-date, richer insights into the sector. We’ve streamlined the process to deliver information more quickly and, starting this quarter, we’re supporting our data release with a more detailed information factsheet, which we plan to publish each quarter exclusively in The Intermediary.

This issue is a snapshot of that information, and in future issues we hope to provide even more wideranging and insightful data.

The latest data shows that bridging lending continued its record-breaking growth in Q3 2024, with increases in applications, completions and loan book values. Completions grew to a new record of £1.79bn in Q3 this year, representing a 2.6% increase on the second quarter and this has helped to drive a 7.6% increase in the size of overall loan books, which have now exceeded £9bn for the ﬁrst time, reaching £9.01bn.

Our latest data also shows strong growth in pipeline business, with applications increasing by 6.7% in the third quarter to reach £10.9bn.

These ﬁgures clearly demonstrate the ongoing ascendency of the bridging sector, with growth across the board and record values for completions and loan book sizes.

The continued momentum we’re reporting reiterates the growing importance of bridging and development lending as a vital cog in the UK mortgage industry.

As more brokers and borrowers recognise the many ways in which bridging ﬁnance can help them achieve their goals, we think the sector will continue its upward trajectory.

Ongoing dialogue

At the BDLA, we’re commi ed to playing our role in ensuring this growth is sustainable and continues to put the customer at the heart of all our lending.

We work with our members to promote responsible, customercentric underwriting through our membership rules and code of conduct, and we continue to promote the beneﬁts of a aining the Certiﬁed Practitioner in Specialist Property Finance (CPSP) accreditation.

In addition, we maintain an ongoing dialogue with regulators and policy makers, and we are working with members on steps we can take to help tackle fraud.

These eﬀorts are all helping to raise standards and encourage robust lending, which is contributing to the sustainable growth we have seen in recent years and expect to see well into the future. Watch this space. ●

Applications Received

Loans Written

The volume of loans wri en in Q3 2024 has increased by 2.6% compared to the previous quarter and risen by a more signiﬁcant 25.5% against the same period last year.

Loan books have also seen a steady rise in an annual period with a 23.3% increase between Q3 2023 and Q3 2024. As sentiment has improved, businesses have steadily grown their Assets Under Management (AUM). Applications have ﬂuctuated since last year with an £11.3bn peak in Q1 2024. On average, around 15% of applications convert to actual loans wri en. This metric was highest in Q4 2023 when there were fewer

VIC JANNELS is CEO at the BDLA

Laser focus on new-build

The Government’s commitment to ge ing Britain building again is well documented, and the Budget saw £5bn of funding announced for new homes by 2026.

Considering asset risk in the new-build market has several well-established and reasonably determinate boundaries. Loan-tovalues (LTVs) tend to be lower than for ﬁnancing existing housing stock, to take account of the so-called ‘new build premium’.

A nuanced understanding of similarities, a more synthetic supply and demand dynamic, and the possibility of completion delays all play a part in pricing for this type of lending. Rates are o en higher to add another layer of capital protection for the lender. Lenders will also consider their own exposure to each development, limiting their lending to avoid concentrating too much of their capital risk in certain locations.

The risks around new-build are well documented, but there are secondary considerations for the broader environment. These are becoming increasingly evident, particularly in areas where a proportionately high level of development is taking place.

The issue is infrastructure – both physical and social. Anecdotally, there is a swell of evidence that local NHS services, pharmacies, primary and secondary schools and other basic amenities are just not keeping pace with the rapid expansion of localised populations. Water, electricity, gas, broadband and other utility systems are not seeing the proportionate investment needed to maintain the quality standards that have been the norm in existing housing stock.

The NHS London Healthy Urban Development Unit (HUDU) considers it standard for there to be 1,800 people per one full-time GP, based on guidance by the Royal College of GPs –

applicable nationwide. The population of England is estimated to be almost 57.7 million in 2023 – meaning, crudely, each GP is responsible for 2,063 patients.

Services under pressure

A report published earlier this year by the Environment Agency revealed that many areas of England are already experiencing water shortages. In parts of Sussex, Cambridgeshire, Suﬀolk, and Norfolk, additional demands on water supply from businesses and new housing developments are pu ing huge pressure on water resources. By its estimation, England’s current water provision is not enough to see us into the future.

Another major consideration that increasingly affects buyers’ perceptions of property value is the provision of superfast broadband. Fibre technology provider MapAll has data suggesting that, while the UK’s rollout of fibre broadband is progressing, it’s definitely not plain sailing. It suggests that while urban areas have seen significant uptake, rural areas continue to lag. Why? A key factor influencing the rollout is the variable pace of housebuilding nationwide. This has a corollary effect on existing stock. MapAll cites research showing that 57% of new homebuyers consider broadband speed essential when choosing which home to buy.

These are just a few examples, but they illustrate the growing weight that the population and its homes is having on the country’s social and economic infrastructure. We haven’t even touched on public transport, trains and the cost of travel.

Accelerated planning

Under Labour there are ambitious plans to accelerate planning applications and push through new housing developments, even where local authorities are under pressure

GOODALL is managing director at e.surv

to block them. The provision of more aﬀordable housing and social housing stock as a proportion of new developments has been made central to this Government’s proposals to update the national planning framework.

More thought must be put into how basic infrastructure delivery is guaranteed. It ma ers not only to those buying or renting these new homes, but also to those already dwelling in locations set for development. The impact on their quality of living is potentially huge, if hard to gauge in the short-term.

We need to be honest, are we building in locations where people want and need to live? We have seen hot spot issues in city centres across the UK of over-supply that go beyond any ambition to satisfy the Government’s housing targets.

Too big a burden on local supply and there could be a real eﬀect on buyer appetite for certain properties and locations. If we add into this equation the Labour plan to ease housebuilding on as yet legally undeﬁned grey belt land, these factors become more acute.

For lenders, there is an implicit shi in the risk proﬁle of properties si ing on their back books already. Proactive lending against new developments is one consideration, and a relatively easy one to calibrate at that.

How the broader change in housing supply, infrastructure investment and consumer priorities aﬀect demand for existing stock and, consequently, its value, is a much more complicated task. One that is critically important, nonetheless. ●

STEVE

A specialist lending market review

The specialist lending market – which supports individuals with complex incomes, the self-employed, and those with impaired credit through ﬁrst and second charge products, larger loans, and bridging facilities – continues to experience substantial growth across key sectors.

According to Together’s ‘2024 Residential Mortgage Market Report’, demand is projected to reach new heights over the next ﬁve years, with an expansion from the current £32bn to £54bn by 2029, marking a 70% increase.

Over one-sixth of regulated mortgage lending in 2023 fell into specialist categories, with the sector forecast to expand by a further £22bn in the next ve years”

Inflationary pressures and the lingering effects of the cost-of-living crisis are fuelling the demand for these specialist lending solutions. The research shows that over one-sixth of regulated mortgage lending in 2023 fell into specialist categories, with the sector forecast to expand by a further £22bn in the next five years.

Non-standard borrowers

Despite growth across the specialist market, the research also outlined that access to ﬁnancing remains a challenge for ‘non-standard’ borrowers, with many ﬁnding themselves being rejected outright by mainstream lenders using a highly

automated approach when assessing mortgage applications, and tighter underwriting criteria.

In the past ﬁve years, 7% of nonstandard applicants were rejected, with 4% also denied ﬁnancing in the past 12 months. For some of this group, not being able to talk with an adviser who would understand their circumstances (9%), and a general lack of information about how to secure a mortgage for non-standard applicants (8%), were the biggest challenges. Of those rejected, 5% had no choice but to return to renting, with 4% giving up on homeownership altogether.

This underlines the importance of understanding the unique qualities of diﬀerent market sectors and individual product types, in addition to being able to provide comprehensive advice tailored to meet each client’s speciﬁc circumstances and open the door to the right solutions for them.

Fast-growing seconds

One product type that appears to be outpacing other mortgage market segments is the second charge mortgage, with lending increasing by 17% year-on-year in the ﬁrst half of 2024.

Research by Pepper Money highlighted that second charge mortgages have grown by 28% since 2019, double the growth rate of other specialist markets.

It was also noted that this sector saw 10-times more lending activity than buy-to-let (BTL) mortgages during H1 2024, with £804m in equity being accessed by homeowners through second charge mortgages, compared to £76m in BTL lending.

This growth highlights the ﬂexibility and appeal of second charge mortgages, which alongside traditional uses like debt consolidation and home improvements, are increasingly being used for tax bill payments and to fund deposits for buy-to-let properties.

DONNA FRANCIS is managing director at Envelop

Bridging for chain-breaks

Bridging ﬁnance also remains an essential solution for borrowers, especially when it comes to navigating chain-breaks.

According to Moverly, property fall-throughs increased by 18.1% in Q2 2024, with more than 76,000 transactions collapsing during this period, meaning that access to fast, ﬂexible ﬁnancing is becoming increasingly important for both brokers and borrowers in a challenging property market for many.

SMEs holding back

In the commercial lending space, small to medium enterprises (SMEs) are demonstrating caution amid economic uncertainty. Atom bank’s ‘Q3 SME Pulse’ showed that demand for external funding has slowed, with 15% of brokers reporting a decline in borrowing appetite in Q3 2024, up from just 3% in the previous quarter.

Uncertainty around the Budget and rising interest rates were highlighted to be the primary factors inﬂuencing this drop. Despite this, property purchases remain the leading reason for SME borrowing, cited by 54% of brokers, followed by growth and expansion. While some business owners are exercising caution, many were seeking to secure funding ahead of potential tax changes in this Government’s ﬁrst Budget.

From second charge mortgages to bridging ﬁnance, intermediaries have vast opportunities to guide their clients through this complex landscape, especially if they have the support of trusted packaging partners to meet these evolving needs in an increasingly dynamic lending environment. ●

The vital role of specialists in moving the market

It used to be that specialist lending was most commonly associated with adverse credit, reserved primarily for those who couldn’t secure a loan with mainstream lenders because of their ﬁnancial history. But it’s not only people with adverse credit who ﬁnd themselves not meeting standard lending criteria. There are plenty of would-be borrowers out there with clean credit scores who nevertheless sit outside of the more traditional criteria boxes.

This is another area where specialist lending can oﬀer the solution – by pu ing options on the table for people with unique circumstances who can meet aﬀordability, albeit not through traditional means.

It’s fair to say the demand for this particular kind of specialist approach has probably never been greater, as all the ﬁnancial, economic and social upheaval in recent years has resulted in a customer base with increasingly diverse and complex needs.

Dealing with the fallout of a global pandemic, energy crisis, rising inﬂation and higher interest rates, and the consequences of those for the housing market, means mortgage applications on the whole are no longer as straightforward as they once were.

New challenges

In addition to the obvious impact on aﬀordability, we’ve also seen income pa erns changing, as people pursue a be er work-life balance a er enjoying ﬂexible working during the pandemic, or seek additional income streams to make ends meet.

This has led to a much wider variety of employment situations for lenders to navigate, including self-employment, contractors, sole

traders, freelancers, or a mixture of income streams.

First-time buyers are finding it harder to raise the deposits needed or to meet affordability criteria for increasingly expensive first-time homes. In the buy-to-let (BTL) space, higher interest rates are impacting landlords’ ability to achieve the interest cover ratio (ICR) required when remortgaging their properties.

Assessing cases holistically

Specialist lending has an important role to play in helping people to overcome these challenges. By taking a more ﬂexible approach to things like employment types and income sources, or indeed property type, size and location, a wider variety of cases can be approved.

However, specialist lending o en goes beyond property and income alone. It’s about assessing cases holistically, rather than taking the information at face value, or focusing on what it seems to be telling you ‘on paper’. Through detailed analysis and by bringing more factors into the aﬀordability assessment, a case that initially appears to fall outside criteria can present a client that could be helped.

For example, at Bank of Ireland we might look at savings, investments, or the oﬀse ing of liabilities against restricted stock units, to boost aﬀordability when underwriting cases through our Bespoke proposition.

Childcare or school fees might be excluded from the calculations where evidence shows these are being paid for by a third-party. We can use net proﬁt a er tax and salary and one year’s trading accounts for the selfemployed, and consider workers with multiple contracts, as well as locums

ALAN LONGHORN

is head of sales, distribution and marketing at Bank of Ireland for Intermediaries

and those in specialist industries. We can also factor up to 100% of additional income into the calculation.

This is alongside more standard approaches of looking at 40-year terms and ﬁve-times income multiples.

Our joint borrower, sole proprietor (JBSP) proposition, First Start, helps boost the borrowing power of a ﬁrst-time buyer by enabling them to combine their income with that of a sponsor. For landlords, some personal income can be taken into account to supplement rental income and help achieve interest cover ratio (ICR) as part of our Top Slicing proposition.

Unlocking homeownership

These examples demonstrate the positive impact of specialist lending. By taking a tailored, common-sense approach to underwriting, it becomes possible to unlock homeownership, and be er solutions, for more people.

Another key factor in the success of a specialist lending approach is the relationship between lender and intermediary. That’s why we’ve made it even easier for intermediaries to ﬁnd out how we can help their clients through our daily Bespoke underwriting surgery, where we can take complex case questions and get immediate answers for them, plus our online Working With Us Hub and live chat function.

This partnership approach, together with our dedicated Bespoke proposition, is opening the door to the increasing number of cases where one size doesn’t ﬁt all. ●

Reflections on six months as a new lender Building a

As the CCO of Interbridge Mortgages, I’m pleased to reﬂect on the journey we’ve embarked upon over the past six months.

From the very start, we set out with two key priorities: building a brand that resonates with both brokers and customers, and fostering a foundation of trust with our broker partners.

These priorities, coupled with a strong emphasis on continuous feedback and learning, have guided our strategy and helped us make meaningful progress in an increasingly competitive market.

I’d like to share some of the insights we’ve gained along the way, and explain how they’re shaping our approach to growth, innovation, and customer service.

A foundational pillar

In the second charge lending space, trust is paramount. This sector is not without its complexities, and brokers play a crucial role in bridging the gap between lenders and customers.

From day one, we recognised that building a strong and transparent relationship with our broker partners would be essential. Brokers are not only our distribution channel, but also a source of invaluable insights into the needs and preferences of customers.

To build this trust, we focused on direct, open communication and creating a reliable partnership that brokers could count on.

Our commitment to building these relationships has meant

spending considerable time on the front lines with our brokers. This isn’t just about discussing deals; it’s about understanding the day-to-day challenges brokers face, listening to their concerns, and collaborating to ﬁnd solutions. This has allowed us to create a bond rooted in trust, which in turn helps brokers feel conﬁdent in recommending our products to their clients.

We have found that nothing replaces the value of trusted, personal relationships, and we’re commi ed to keeping these relationships at the heart of our business model.

A continuous journey

Feedback from brokers and customers has been invaluable as we reﬁne our products and services. We were determined that this journey wouldn’t be ‘one and done’. Markets evolve, customer needs change, and regulatory landscapes shi . Therefore, we’ve commi ed to an

SIMON MARTIN is chief commercial o cer at Interbridge Mortgages

brand

ongoing process of gathering and acting on feedback to ensure we stay aligned with the needs of the market.

One of our key learnings has been the importance of staying nimble and ready to innovate. Through regular discussions with our broker partners and customer feedback mechanisms like Trustpilot, we gain insights that allow us to continuously enhance our product oﬀerings. For example, based on broker input, we’ve started exploring new product propositions that cater for a wider range of ﬁnancial needs.

This approach enables us to stay relevant and responsive, creating a cycle of improvement that beneﬁts both brokers and their clients.

By maintaining a close relationship with brokers, we ensure that our products and services align with realworld needs. It’s not about introducing changes for the sake of it, but about making thoughtful adjustments that enhance the experience for both brokers and customers.

something that’s expected but not necessarily valued as a diﬀerentiator.

We believe otherwise. Our approach is to provide a level of service that stands out and sets us apart from other lenders. This means taking the time to deliver high-quality, well-thoughtout solutions rather than focusing solely on speed.

It’s not about ge ing packs out as quickly as possible. Instead, we emphasise quality and all-around service that ultimately leads to the best outcomes for our customers.

We aim to add value in every interaction, ensuring that brokers have the support they need to deliver an outstanding experience to their clients.

Raising the bar for all

while also contributing to the growth of the second charge market.

Dispel the myth

One of our ongoing goals is to simplify the second charge market for both brokers and customers.

Despite perceptions that this market is complicated, we believe that with clear communication, robust support, and straightforward products, we can make second charge lending more accessible.

Brokers play a vital role in educating customers, and we aim to support them by demystifying the sectors products and processes.

This clarity not only helps brokers feel conﬁdent in selling second charge products but also empowers customers to make informed choices.

This approach keeps us grounded, ensuring we don’t lose sight of our core values as we grow.

Not just a hygiene factor

In today’s lending market, service is o en seen as a ‘hygiene factor’ –

The evolving landscape of Consumer Duty has raised the bar for lenders and brokers alike, and we view this shi positively. We believe second charge lending should become an integral part of a broker’s core product range, not an a erthought.

By doing so, brokers present a full suite of options to customers, empowering them to make informed ﬁnancial decisions.

This approach aligns with our mission of transparency and quality,

Moving forward with purpose

Our ﬁrst six months have taught us that the journey of building a brand and earning trust is ongoing. By staying close to our brokers, listening to feedback, and embracing a serviceﬁrst mentality, we’re positioning ourselves to grow sustainably while meeting the evolving needs of our customers.

As we look to the future, our focus will remain on delivering quality, enhancing transparency, and continuously innovating to support our partners and customers.

We believe that by challenging perceptions and raising standards in the second charge lending market, we can build a brand that brokers trust and customers value.

The road ahead is exciting, and we’re eager to continue this journey alongside our broker partners and customers.

Together, we can drive meaningful change and help shape a more transparent, accessible, and customercentric lending market. ●

Why would you choose a second charge mortgage?

While meeting brokers I am o en asked to give speciﬁc examples of where a second charge loan can be the best advice to clients trying to raise capital.

In the past, advisers tended to be wedded to the remortgage option a lot more than they are today. Today’s crop of brokers are more willing to listen to alternative options to help them ﬁnd a realistic borrowing solution.

This more broadminded approach says a lot about the effect of changes to compliance, and the efforts of the regulator to redefine the broader meaning of customer support at the advice stage, as well as the generational shi that has meant that there are fewer advisers still looking at second charge secured loans with a negative a itude based on outdated views of the sector.

Market growth

The evidence this year shows the underlying growth in the second charge mortgage market, which experienced its eighth consecutive month of new business growth in August 2024, according to ﬁgures from the Finance & Leasing Association (FLA). New business volumes for the ﬁrst eight months of 2024 were 14% higher than during the same period in 2023.

There are many homeowners in the middle of very favourable fixed rate mortgages, who will not want to remortgage in order to raise money because of early repayment charges (ERCs) on their existing first charge, as well as being unable to obtain a similar or be er first charge remortgage. Second charge mortgages can provide suitable answers to questions

about the best way to ﬁnance homeowner clients who need to raise capital, and can oﬀer support for advisers who have clients in situations where conventional lending falls short.

A primary example of this is debt consolidation. The second charge route enables borrowers to streamline their monthly credit commitments into a single, more manageable payment without having to upset the main mortgage with the potential added costs of ERCs and a more expensive mortgage.

Making improvements

There are also a substantial number of homeowners who have decided to opt for improving their property rather than move.

At the beginning of the year, a third (32%) of UK homeowners planned to take on major home renovation projects, according to data from Confused.com.

The most common reasons for renovating in 2024 included modernising the home (48% of renovators), addressing maintenance issues (29%) and increasing resale value (9%).

With the current Government looking to maximise tax revenue, vague hopes of any reduction in Stamp Duty were scotched at the recent Budget, giving more weight to the decision to renovate rather than move.

There is plenty of evidence that deciding to stay put is becoming more popular and less expensive than moving house, while undertaking substantial renovation work such as new kitchens, extensions or lo conversions. These improvements should increase property value while maintaining existing ﬁrst charge mortgages.

Also, because second charge rates are increasingly competitive and more aligned to first charge rates, it is becoming a significant factor in making them appealing, because it allows borrowers to secure the amount they need. This should to be considered by advisers looking at the remortgage route and finding that their ability to reach the desired sum may be restricted through chasing a remortgage.

In short, second charge mortgages can oﬀer the right funding solution for homeowners aiming to raise capital from their properties without having to lose – in most cases – their highly advantageous existing ﬁrst charge mortgages.

Once advisers recognise that there is a usable alternative to conventional ﬁrst charge remortgages, they can see the many diﬀerent uses to which a second charge mortgage can be put over and above home renovations and debt consolidation.

Today’s advisers are fortunate to have more than one course of action when exploring the means to help clients who are looking for the best way to raise capital from their homes.

The second charge option has clear applications for clients for whom a remortgage is either too expensive, or because of issues over loan-tovalues (LTVs).

In an industry where innovation can take time to become mainstream, second charge mortgages are ﬁnally making an impact on the way that advisers consider the best course of action for their clients. ●

LAURA THOMAS is regional sales manager at Equi nance

The importance of the second charge mortgage market

The second charge mortgage market has received a signiﬁcant amount of airtime in recent years, as the challenges within the UK economy and the wider housing and mortgage sectors have seen demand increase.

Rising interest rates, high inﬂation and increased living costs saw the appeal of second charge mortgages come into their own as a growing number of brokers and borrowers sought alternative options to remortgaging to address their capital raising needs.

With the economy now showing greater signs of stability, demand for second charge mortgages is expected to remain healthy as we head towards the new year. Figures from the Finance & Leasing Association (FLA) show new business volumes have continued to increase over 2024, rising 27% in September – the third consecutive month of double-digit growth.

In total, 58.1% of new agreements in September were taken out for debt consolidation purposes, while 12.1% of all new loans were taken out for home improvement reasons. The remaining 23.3% of loans were expected to be used for a combination of both these factors. This continued demand in the sector is a positive sign and illustrates the growing signiﬁcance and awareness of the second charge market among borrowers. At Pure Panel Management, we have also seen increased demand in the second charge market, which is great news for brokers, lenders and borrowers alike as a healthy and buoyant second charge market is a crucial component of the mortgage industry.

Knowledge and education are the key to continued growth and demand

in this sector, and while there is certainly heightened awareness around the use of second charge mortgages for debt consolation and home improvement purposes, it is important that the industry continues to fly the flag for second charge mortgages as an important financial planning and capital raising tool.

The fact is that second charge mortgages can be used in most situations where raising capital is required.

While paying off debt and financing the cost of an extension are perhaps the most common uses, the money raised from taking out a second charge loan can also be used to pay a tax bill, finance school fees or even cover the cost of a divorce.

Cost-e ective option

Given that many borrowers looking to capital raise in the current economic climate are likely to lose the preferential rate on their ﬁrst charge mortgage should they reﬁnance, then taking out a second charge mortgage can make more sense.

That way, they can keep their ﬁrst charge mortgage in place and only borrow the amount they need with a second charge.

In many situations, a second charge mortgage may also prove to be a more suitable and cost-eﬀective option for a borrower’s capital raising needs, as they can tap into the equity si ing in their home and spread the cost of borrowing over a period of up to 25 years.

Taking out a second charge will also mitigate the need to pay any penalties, such as an early repayment charge (ERC), for leaving the ﬁrst charge mortgage early.

Similarly, in this new and higher interest rate environment, where

JAMES GILLAM is managing director at Pure Panel Management

Understanding the signi cance of the second charge mortgage market is crucial if brokers truly want to provide practical capital raising solutions for their clients”

many homeowners are still adapting to higher living costs and budgetary pressures, seeking out ways to make their money go further and last longer remains paramount.

This is particularly true for those who may have seen their levels of unsecured debt climb in recent months, as capital raising by tapping into the equity in their home and taking out a second charge mortgage to service that debt could make their monthly outgoings more manageable.

Given the recent challenges in the economy and the ongoing uncertainty many homeowners may feel about their ﬁnances, understanding the signiﬁcance of the second charge mortgage market is crucial if brokers truly want to provide practical capital raising solutions for their clients.

As with all aspects of borrowing, a second charge mortgage may not be the best solution for every client, but for those looking to capital raise, it should certainly always be a consideration.

The need to explore every option has never been greater. ●

Later life lending for the over-80s

The later life lending sector is evolving at a rapid rate as the lifestyles and ﬁnancial needs of those over the age of 50 continue to change at pace.

Gone are the days of retiring at 60 and living for another ﬁve to 10 years. These days, many people continue to live and work well beyond the traditional age of retirement.

Whether this is because they need or want to continue to receive an income, enjoy the mental stimulation and social interaction that o en comes from being employed, or simply because they enjoy working, these shi ing dynamics underline just how important it is for the later life lending market to adapt and develop its oﬀerings.

According to ﬁgures from UK Finance, the percentage of mainstream mortgages extending beyond the expected retirement age has grown to more than 60% in 2024,

compared with around 20% two decades ago.

In addition, data from specialist over-50 provider Saga shows that rising house prices mean people are waiting longer to buy their own home, which has helped to fuel a 30% increase in the number of ﬁrst-time buyers over the age of 50.

These ﬁgures not only show how the concept of retirement has changed over the past 20 years, but it demonstrates an urgent need to provide relevant and useful tailored ﬁnancial solutions that be er meet the diverse range of borrowing needs for those in retirement.

Enquiry uptick

To this end, we recently enhanced our lending in retirement proposition for borrowers taking a mortgage past the age of 80. These changes have been adopted to reﬂect the uptick in enquiries from brokers with clients looking for ﬂexible later life lending solutions.

ASHLEY PEARSON is head of intermediaries at Loughborough Building Society

Under the new criteria, income will now be assessed at 4.5-times up to the applicant’s retirement age, with aﬀordability then calculated according to the balance of the mortgage and the applicant’s projected pensionable income to ensure this multiple income still applies.

If the mortgage is still aﬀordable based on 4.5-times pension income at the point of retirement, and they are taking the mortgage past the age of 80, then the borrower will be eligible for a lending in retirement product. If the applicant is already aged 80 or over, then income multiples of 3.5-times are still used to assess aﬀordability.

A ordable future

Improving the way in which aﬀordability is calculated for those taking a mortgage past the age of 80 will help to increase the options, as income streams and earning potential don’t end for a huge number of people, even entering their twilight years.

Given the aﬀordability challenges facing all borrowers, coupled with the fact that people are living and working longer than ever, improving access to later life lending is essential if the industry is to continue to meet the changing needs of this demographic.

Borrowing beyond the age of 80 is likely to become more common. With more individuals purchasing their first home later in life, the continued evolution of the later life lending market is essential, to be er meet borrowers’ needs and offer flexible, practical solutions to help them achieve the lifestyle they desire and have worked hard to provide. ●

Improving access to later life products is essential to continue to meet the changing needs of this demographic

Act now to ensure certainty for clients

For full transparency, I am writing this prior to the Budget, so it’s not possible to give a full rundown and review of all the measures announced, and in particular, how they impact on later life borrowers and our sector speciﬁcally.

What I can say is that we will have much more certainty by the time you read this, by dint of two things. Yes, the Budget will have been announced and those measures outlined, and of course we will also have had the latest Monetary Policy Commi ee (MPC) meeting, and therefore a greater understanding of the Bank of England’s view on rates, and in particular, potential cuts.

That definitely ma ers a great deal for all mortgage sectors, and of course for all mortgage borrowers, because even if there isn’t necessarily a direct link between what the Bank Base Rate (BBR) is and what product rates are on offer – it’s much more complex than this with swaps and future funding, etcetera – we know that customer sentiment can be shi ed significantly by MPC action, or indeed, inaction.

We certainly saw that, in a wider sense, following the bank’s vote to cut the BBR in August, and I would certainly suggest that – in the mainstream market particularly –that lack of clarity around the Budget, and no action being taken by the MPC in September, has had a converse eﬀect in recent weeks, in terms of borrowers preferring to adopt a ‘wait and see’ approach.

Softer focus

The good news for those active in the later life lending sector is that we tend not to be so in ‘thrall’ to the rates situation, albeit with the caveat that rates of course ma er, and certainly as we move towards a market where there is a greater crossover between the mainstream and later life, then the

focus on rates and cost is going to be increasingly heightened.

However, for the most part, later life lending product need and demand tend not to be so forensically price focused, which can of course allow the adviser to concentrate on all manner of other product features and beneﬁts to get the most appropriate solution recommended.

By the same token, where we generally have a mainstream market which can fluctuate depending on the month, or the season – a er all, that’s why many house price indices, for example, get ‘seasonally adjusted’ throughout the year – this is certainly not a prevailing feature of the later life lending market, and this can allow advisory firms in particular to benefit from not having such potential peaks and troughs.

Through the summer, for example, at Air we didn’t see a noticeable seasonal drop-oﬀ in terms of adviser engagement with us, whether that was through use of our helpdesk or sourcing sessions, for instance, which again suggests a ‘summer dip’ is not a pronounced part of our market, and that demand held up through the summer months.

However, as many advisers will know only too well, that doesn’t preclude wider public uncertainty feeding into later life lending decisions, not least because these tend to be longer-term in their nature, and therefore a signiﬁcant commitment that o en requires time to think over.

When you are looking at products that can potentially last decades, rather than just two years, and which can come with charges over those lengthier terms, it is natural to take more time over such decisions.

Also, most recently, as alluded to earlier, when you have ‘big ticket’ events on the horizon which have the potential to signiﬁcantly move the ﬁnancial dial for lots of people, as the Budget undoubtedly has by the time

you read this, then it is to be expected that there will be a degree of deliberation, and a natural tendency to want to wait and see what is delivered, particularly when it’s from a new Government.

But, as you read this, we will now (hopefully) know exactly what those much-debated-over tax and spend measures are, and indeed, they might well prove to be the catalyst for people to want to act, and act quickly, in order to beneﬁt potentially from any ‘grace period’ aﬀorded to them.

Supporting clients

Of course, older borrowers who have equity to access – and who might have been dealt a diﬃcult hand by the Government in terms of increased taxation in areas like Capital Gains Tax (CGT) or Inheritance Tax (IHT), for example – could also be a much more motivated client base for advisers to be dealing with right now.

However, to point out the obvious, advisers and their ﬁrms have to be in a position to support these clients and ﬁnd the most appropriate solution from the growing range of options that exist for over-50 borrowers.

If you’re not currently in this position, then the time to act is now – to understand what is required, work with the likes of Air, to have everything in place to access and grow business within this space, and to provide an all-round service which can give your client the certainty they are going to want. Of that there can be no doubt. ●

PAUL GLYNN is CEO of Air

Meet The BDM

Retirement

The Intermediary speaks with Gemma Brown, South West and Wales business development manager (BDM) at Pure Retirement

How and why did you become a BDM?

A er eight years as a mortgage and lifetime mortgage adviser, I knew I was ready for a new challenge, something that would allow me to use my skills in a di erent way. My experience as an adviser, combined with the BDMs I’ve worked alongside, inspired me to take the leap.

When my children moved up to ‘big school,’ it felt like the perfect time to make a change and take on a new role within the industry. Becoming a BDM was the ideal t, as I’ve always believed in the power

of relationships, and this role lets me build those connections while making an impact on the business.

What led you to join Pure Retirement?

From the outside, it was clear that Pure values strong relationships, both externally and internally, and when I joined, I found this to be 100% true, as it’s a company where people genuinely care.

Additionally, my experience as an adviser played a big role in my decision and I was already familiar with the lifetime mortgage products and the needs of clients, which

allowed me to hit the ground running. It’s great so see the company continue to evolve and innovate since I’ve started, up to and including o ering an interest servicing option on our Heritage range in September, o ering a rate discount to customers who commit to making monthly payments.

What makes Pure Retirement stand out from

the crowd?

I believe we o er exceptional support to advisers both pre- and post-application via our dedicated business development teams,

and based on conversations and feedback it’s clear that they value the comprehensive support we o er throughout the entire process.

We even assist with lead generation and provide full marketing support, both digital and print, for all our registered advisers.

What

are the main challenges facing BDMs right now?

A huge challenge is keeping up with the fast pace of change in the industry, as rates are always shi ing, regulations are changing, and market conditions are constantly evolving. BDMs need to stay on top of all these updates and make sure advisers and clients are always in the loop in a timely manner.

What

are the opportunities for BDMs at the moment?

An exciting opportunity for BDMs is the variety of experiences that come with being out in the eld.

No two days are the same, and business development managers have the chance to meet a diverse range of people with di erent life experiences; whether it’s a formal meeting in an o ce or a hike on Dartmoor, the exibility and variety of conversations are part of what makes this role so rewarding.

It’s about adapting to each adviser’s situation and providing a personal service that works for them, while also sharing great news and product updates.

What products does Pure Retirement o er?

As a specialist lender, Pure Retirement is able to focus exclusively on delivering awardwinning lifetime mortgage solutions. Over the year we’ve enhanced our range through product updates

such as seven-year early repayment charges (ERCs) and a new drawdown facility on our Emerald range.

However, o ering interest servicing on our Heritage range has undoubtedly been a highlight of 2024. Discounts of up to 1% will apply for customers making monthly payments from just 25% to 100% of the monthly interest.

Customers can choose to stop making the monthly payments at any time, or if they just need a break from making payments, they can bene t from a payment holiday of up to three months each year.

Does the rm have a typical customer base?

While we provide exclusively for over-55s, that customer pro le has undoubtedly diversi ed, as evidenced by the ndings of our new research paper, e Evolving Lifetime Mortgage Customer. is is an exploration of changing equity release demographics, which traces demographic changes in new lifetime mortgages between 2018 and 2024.

How

do you work with advisers to ensure the best borrower outcomes for borrowers?

For me, one of the key aspects of building strong relationships is always following through on what you say you’ll do.

If I promise to call back, I will. If I don’t know the answer, I’ll nd it.

Trust and reliability are crucial in this environment, and I’m committed to delivering on my promises. I also make it a point to really listen and ask the right questions to understand both the adviser and their clients.

Every adviser has di erent needs, so I take the time to gather as much information as possible, ensuring that I can provide the most relevant support for each unique situation.

One of the key aspects of building strong relationships is always following through on what you say you’ll do. If I promise to call back, I will. If I don’t know the answer, I’ll nd it”

What advice would you give potential borrowers in the current climate?

My main piece of advice would be to speak to an adviser, they have the right knowledge and experience to help you make an informed decision.

Don’t be scared of lifetime mortgages – in the right situation, they can be the perfect solution.

An adviser will assess individual circumstances, explain the di erent products available, and explain the bene ts and potential implications. It’s all about making sure you’re fully informed and con dent in the decision you’re making. ●

Why are some HNW risks so challenging to place?

High-net-worth (HNW) insurance has always been a specialist sector for insurers and intermediaries alike, requiring specific policies and a unique approach. For your clients, they are not only buying an insurance policy, they’re buying valuable peace of mind. For you, HNW clients are some of your most cherished relationships, offering you the chance to flex your muscles as a trusted adviser.

Despite HNW wealth exceeding $86tn, and the number of HNW individuals increasing by 5.1% to more than 22 million globally in the last year according to Capgemini, we’re currently experiencing one of the hardest markets for HNW insurance risks in the last two decades.

HNW insurance isn’t immune to the increased costs experienced across the whole market, and neither are HNW clients immune from the overriding challenging economic conditions right now.

Insurers have become more selective on the risks they want to quote. They are seeing more cases than they can write, so are picking and choosing the ones they want.

Good broking is partly about understanding the risk and the market and knowing which of the insurers would be best placed to quote that risk. Likewise, providing a really good presentation of the risk is more important than ever to ensure it a racts the a ention of the insurer.

Top tips

Get the risk presentation right ﬁrst time. What does a good risk presentation look like? It must include all the necessary information

in a way that is accurate, clear and easy to understand. The more information you can provide the be er, and don’t leave any grey areas that could be open for misinterpretation. Where possible, give a split on the contents between general contents and the more expensive belongings – and split that into its constituent parts: antiques, ﬁne art, jewellery, gold and silver items, etcetera.

Get granular. The key is to make it as easy as possible for the underwriter – for example, if there are multiple buildings, can you document the value of each, including the method of construction, photos, plans, location data and surveys. If there is a recent estate agent sales pack, that’s a really good starting position. Likewise, include accurate appraisals of high value possessions such as ﬁne art, jewellery, watches, and collections, along with photos and provenance information.

Security. Not surprisingly, the security and risk mitigation factors are key. Do they have an intruder alarm, and if so what type? Is it professionally installed and maintained? Do they have CCTV or a ﬁre alarm system. Do they have a safe, and if so, what is the make or model, and the cash rating?

Get to know your clients. Listen carefully to their needs, understand their lifestyle and dive deep into their assets. Do they travel frequently, meaning the house could be le unoccupied for periods? Are they high proﬁle? Celebrities are o en photographed wearing expensive jewellery or watches and publicise their movements, making them a greater target for thieves.

GEOFF HALL is chairman at Berkeley Alexander

Be honest and open. For these types of policies, its vital to be open and honest. Speak to your client to understand their current insurance provision, target premium, previous experience with both insurers and brokers, so that you target the right markets in the right way.

I know this sounds like a lot of work, but I promise it’s worth the eﬀort. Ge ing HNW presentations right ﬁrst time will ultimately save you and your clients from unnecessary time wasting and frustration. It can also help identify which policy options are best suited to individual portfolios, needs and lifestyles.

This can also help mitigate the risk of underinsurance. Importantly, knowing your clients will make it easier to identify unique requirements such as cyber protection, liability for staﬀ, or the need for cover in speciﬁc jurisdictions.

As the linchpin between the client and insurer, you play a vital role in ge ing HNW insurance right in terms of product, service and claims prevention. In a hard market, it is more important than ever that you work with a general insurance provider with access to the right range of insurers, and hands-on specialist technical expertise to help you protect your clients’ assets and lifestyles.

Don’t turn your back on high-networth in a hard market. This is exactly when you show your worth, and cement client relationships for the long-term. ●

Discover how working with VAS Panel can support your business through our comprehensive services and solutions tailored to your needs.

T 01642 262 217

E info@vas-group.co.uk

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Why brokers should be thinking about the AR route

CHRISTOPHER TANNER is CEO at HLPartnership

If ever there was a time for brokers to commit to appointed representative (AR) status, it’s now. The truth, in my opinion, is that the arguments for and against have been coming down more heavily on the side of AR status over the past two years.

I realise that I am likely to stir up advocates of the independent route, but as the CEO of a successful mortgage and protection network, I feel this is a great time to be or become an AR, especially if you can choose the right principal ﬁrm to join.

There has never been a more difficult time to be an independent firm, whether well-established or just starting out. The days of running any firm on a manual paper-based system, for example, are long gone. Substantial investment in IT infrastructure, both in up-to-date hardware and sophisticated customer relationship management (CRM) systems that work seamlessly from a compliance point of view, as well as connectivity to lenders and other product providers, is of paramount importance.

Customer outcomes

Managing customer data must include the facility to schedule regular client reviews, as well as maintaining a ﬁrst class data capture and ﬁle checking system. Not only does it cut down on time consuming manual processes, but means that much of the nuts and bolts administrative side of compliance is taken care of.

Compliance, especially under Consumer Duty, means that we are all under greater scrutiny to ensure the right customer outcomes. That places the same burden on all ﬁrms, but particularly smaller ones.

The need to document and maintain the information that we take from clients – and then justify the subsequent research and recommendations we make – is only part of the challenge we must tackle to remain compliant.

Also, don’t forget that the importance placed on us to maintain client relationships in the long term is a feature of the requirements under Consumer Duty that tends to be overlooked.

We know that keeping up with the requirements of Consumer Duty places a disproportionate obligation on smaller ﬁrms in terms of resource in comparison with larger peers. Of course, no one could have foreseen the pressures that would become evident for smaller ﬁrms, but there is no doubt that the cost in terms of time and cash makes it harder for them to keep up.

Apart from compliance, adviser ﬁrms need to recognise the importance of technology, not only to help manage their ongoing business but also for its ability to integrate best practice into the everyday running of the business.

While there are many very good IT solutions in the market, covering CRM, sourcing services and back oﬃce functions, making them work together seamlessly is not so straightforward.

Assuming that the cost of bringing this together is even within the budgets of many ﬁrms, successful integration is not guaranteed. Networks like ours have spent, and are continuing to spend, hundreds of thousands of pounds upgrading and developing integrated IT systems that our members make use of for free.

Deciding on the right path is a challenge for every ﬁrm – whether to opt for AR or independent status.

There has never been a more di cult time to be an independent rm, whether well-established or just starting out”

However, it is not just a question of choosing one or the other. Networks only want to a ract the best ﬁrms, and the selection process is rigorous.

A network is not just a convenient umbrella under which members can operate knowing that they are shielded by a large principal. It requires a mindset that is built on a two-way partnership that works for both parties.

Compliance regime

For ﬁrms that have always aspired to remain independent, having to adapt to the changing compliance regime must sometimes feel like painting the Forth Road Bridge – a never-ending task, and one that has to be completed alone, although there are external resources which independent ﬁrms can pay for. Yet another cost to add to those of keeping up with the right technology solutions.

For ﬁrms looking to continue operating at maximum eﬃciency and develop their businesses with support in all key areas, including compliance, marketing, training and the all-important tech required in today’s market, joining a network represents, now more than ever, a strong viable option. ●

Navigating di cult client conversations post-Budget

Although each Budget comes with a whirlwind of rumours, this year felt far more damaging, especially for business owners. Now that we know the headlines, clients will be dealing with the pre- and post-Budget emotions, with one question on their minds: How does this aﬀect me?

For some, the changes may immediately impact their plans. For others, previous advice may need revisiting, and some may be concerned about the longer term.

Advisers must prepare themselves for emotionally charged conversations.

Empathy and active listening

When a client comes in with heightened anxiety or frustration over tax changes, empathy is the best way to begin. Let the client express their concerns thoroughly before interjecting with solutions or advice. This involves active listening, where the adviser labels the client’s emotions with statements such as: ‘I can see that you share the concerns of so many people about the Budget decisions’. This validates their feelings and helps create a space where they feel genuinely heard.You may feel that the best first response is to provide advice, but be careful. You may dismiss the client’s emotions, making them think you aren’t listening. Respond with empathy first, and maybe follow up with an open-ended question to help them vent before you offer solutions.

Transparency and sensitivity

Don’t delay delivering unwelcome news. Tell the client you have bad

news, then tell them what it is. One element of this Budget that caused emotional damage was the high level of uncertainty and lack of communication from the Government to dampen it.

Snap decisions will have been made before the tax changes were announced, some regre ably. If you have bad news, it’s best to get it out in the open rather than let a client ruminate on the impact.

Clients appreciate honesty, but also need assurance that the news doesn’t mean a dead-end for their ﬁnancial goals. Be direct but tactful, and avoid overly technical language that might confuse or frustrate them.

Acknowledge the challenges but open up room for solutions. The legislation may have changed, which may mean a diﬀerent approach to planning, so be ready to explain solutions once high emotions disperse.

Match, mirror, self-manage

Clients’ responses to ﬁnancial setbacks can vary widely, with emotions ranging from fear and disappointment to frustration and even anger.

If your client is angry, the trigger for that is something interfering with our goals, such as the Budget interfering with immediate plans, and while it is not your fault, the client may direct their anger at you.

If this happens, be ready to match and mirror the client’s anger at about 75% intensity. This may sound odd, but mirroring emotions is inﬂuential; it communicates that we are listening and prepared to see things from the other’s perspective.

Emotions are brief, seconds to minutes at most, so once the anger is out there, it will fade, and you can move on to solutions.

JAMES WOODFALL is communication and behaviour specialist at Raise Your EI

Avoid becoming defensive or reactive, though – even if a client’s response is emotionally charged.

Emotional intelligence (EI) is a crucial asset here. You may notice your emotions rising; pausing for up to seven seconds can help you manage your response. Controlling breathing helps – breathe in, hold, and exhale for longer than the breath. This signals your nervous system to calm down, counteracting the emotion.

Follow up regularly

A er diﬃcult conversations, follow up to ensure clients feel supported and informed. You may have decided that discussing solutions wasn’t the best thing to do while emotions were high. The client might need a day or two before they are ready to hear your advice.

Emotions, especially when intense, can change our mood. For example, if they experience intense anger, especially if the cause wasn’t resolved, they might be in an irritable mood for days while they replay the scenario in their head. In this instance, you might need to let a client cool down before you follow up.

Show empathy through a quick phone call or a follow-up email. Trust grows when we are mindful of others’ emotions and respond appropriately.

Navigating diﬃcult client conversations requires empathy, EI, and clear communication.

By empathising, framing challenges as opportunities, and reinforcing a long-term perspective, advisers can transform potentially strained interactions into moments that deepen client trust. ●

Case Clinic

CASE ONE

Homemovers with credit issues

Acouple, client A and B, live in a house bought by A, with around £50,000 left on the mortgage. The house is valued at £310,000, and the couple earn £92,000 a year combined, both with steady jobs in the civil service. However, A had some bad debt, around £11,000, which they are in the process of paying off. Despite this, the couple is looking to sell up and borrow around £100,000 to add to the equity and buy a new house.

HARPENDEN BS

Unfortunately, this doesn’t sound like one for us at this stage. Our minimum loan is £150,000. Aside from this, if the applicant is currently repaying a default or County Court Judgements (CCJ) – if that is what is meant by ‘bad debt’ – we would require this to be fully repaid as a minimum at application stage.

ATOM BANK

The bad debt will likely appear on a credit check, which will rule them out for a number of mainstream lenders for a host of different reasons. Some may exclude the clients from gaining a new loan due to the debt not yet being settled, some due to the length of time it has been since the event occurred, and others due to the adverse impact it will have on the customers credit score.

The clients’ bad debt could take a number of forms, be that unsatisfied defaults, CCJs or arrears. Depending on which, we may be able to support

them with our Near Prime range, subject to our criteria around current adverse balances and time since the debt occurrence being met.

We will consider applicants with up to £2,500 in unsatisfied registered defaults or £1,000 in CCJs. Importantly, this covers the amount still owed, not the original charge amount, meaning we may be able to support these clients if they have managed to reduce the £11,000 over time.

We recently reduced the ‘look back’ period for defaults to two years for Near Prime customers, while CCJs are three, which again may allow us to help these clients.

Finally, we take a proactive approach in supporting clients with credit issues back to Prime status. When the time comes to remortgage, if their circumstances have improved, these clients would be offered a Prime product rather than another Near Prime product.

UNITED TRUST BANK

If both applicants wish to be party to the new purchase mortgage, then A’s adverse history will need to be taken into consideration. However, we can consider a mortgage in just client B’s name if their credit history is much better, and they may qualify for a better product with a lower interest rate, but the case would need to pass affordability purely on one income.

We would not insist on client A being party to the mortgage and can sign an occupier’s waiver, even if married.

If A has some outstanding unsecured arrears which could be brought up to date before our mortgage offer, we will ignore the adverse payment history on these.

Any CCJs or defaults over £300 registered in the last two years would be taken into account for product selection, ignoring any mail order or communication supplier accounts regardless of when registered and regardless of value.

CASE TWO

Self-employed expat

An expat is looking to purchase a new home in the UK. The client has his own has selfemployed company in The Netherlands and the company accounts are in Dutch. Lenders have turned him away as his income was self-employed and coming from overseas. The applicant, however, also has a holding company in the UK.

HARPENDEN BS

We don’t presently lend to expats. However, seeing that the purchase is for a UK home, we would be keen to know how long the client will reside in the UK following completion, as this may be something we could consider. Overseas selfemployed income is not an issue for us as long as the income documents can be translated.

BUCKINGHAMSHIRE BS

Before accepting an application, we would need to understand a little more about the case. For example, what is the purpose of this purchase? Is the applicant moving back to the UK? If this was a buy-to-let (BTL) purchase, we would be unable to help while the applicant is residing in the Netherlands. The society does have a large list of countries that are acceptable for expat applications, the list is viewable on our website. Self-employed expats are also considered. If the applicant is looking at purchasing a residential property and moving back to the UK, we can consider this subject to a maximum loan-to-value (LTV) of 60%.

TOGETHER

If the customer is purchasing a property for their own residence, we will assess the income based on UK income. If the holding company declares UK tax, and the customer can provide selfassessments or an accountant’s reference, we will assess affordability using this. We can support customers with only 12 months trading in the UK, but request an appropriately qualified accountant provides projected figures for the next trading year. We do not have a minimum period an expat must have resided back in the UK before they can apply, but we will need to see proof of address and residential history for the past three years.

CASE THREE

Residential home to BTL investment

Aclient is looking to buy a second property, using it as her home and turning her preexisting property into a rental opportunity. However, without the additional earned income from the potential rental property, lenders have turned the client away due to affordability concerns. On top of this, the client hopes to keep mortgage payments as low as possible.

HARPENDEN BS

In order to consider a BTL mortgage on the current residence, the client would need to earn a minimum of £30,000 per annum from a source separate to this rental property. To keep repayments as low as possible, we can offer interest-only if the LTV is no higher than 70%.

BUCKINGHAMSHIRE BS

The society can consider this case, the previous property would be classed as a consumer BTL, unless the applicant is doing this for business purposes. A declaration would need to be signed to confirm the applicant’s intention. A signed Assured Shorthold Tenancy (AST) or an ARLA letter would also need to be provided to confirm that the property is self-funding.

WEST ONE LOANS

We can consider let-to-buy, but we would first need to look at affordability. We would need the rental income to cover the mortgage, so we would not use rental income for affordability. However, we could then discount the mortgage on the second property from outgoings. We can look to support on the lower mortgage payments by offering variable fee-carrying products.

TOGETHER

Together can utilise 90% of a surveyor’s projected rent towards the affordability assessment, if we are comfortable the property will be tenanted within a reasonable timeframe. If the customer fails the affordability assessment, they then have the ability to assess affordability based on stated expenditure. Subject to the exit strategy being plausible, we can also support with interest-only mortgages to help keep payments low. ●

How resilient are you?

There has been so much a ention to ill health in the past that we have o en overlooked how common good health and wellbeing really are. Most of us have been through diﬃcult times, and most of us get over it eventually and go on to have rich and fulﬁlling lives, rather than lives of distress or failure.

However, people vary. Some people do seem to have a ‘natural’ resilience and come through even very diﬃcult times constructively, bouncing back to where they were before or even growing stronger. Others, referred to as ‘eggshell personalities’ in law, have a vulnerability that makes them especially susceptible to hard times. For others, resilience is just ﬁne until an extreme breaking point is reached, with potentially catastrophic consequences.

Ideally, we need to work to raise our level of resilience, not so that we can just pile on more and more work, eﬀort and strain, but so that we can keep learning while in the eye of the storm, realise our limitations, continue to function well and come back faster from adversity.

The big question, of course, is whether we have any control over our levels of resilience, or whether we are mere victims of our genetic inheritance. The ‘nature versus nurture’ debate rages for just about everything in life, and as o en as not, scientists end up telling us it may well be 50:50.

If there is even a 50% chance of strengthening your capacity to cope with life’s vagaries, then that sounds like a good deal to me, and one worth pursuing. Some people may be blessed with a robust character and physiology, which, combined with constructive coping strategies, protect them from day one. Others may have to deliberately seek ways of increasing their resilience.

O en considered a personality trait or aspect of character, resilience is be er described as a process that both promotes wellbeing and protects from risk. Ideally, it is built through the development of individual coping strategies, underpinned by good family relations and upbringing, excellent schooling, strong communities, constructive workplaces and positive social policy. Building a range of protective factors gives a cumulative protection that becomes increasingly important as ever more risk factors come into play in everyday life.

People who have a strong personal process for resilience have the greatest chance of sound wellbeing.

Under pressure

Stress and lack of wellbeing have been around for a long time. The research is immense and the data irrefutable regarding people’s vulnerability to extreme pressure.

It is only more recently that scientists have turned their a ention to the idea of living positive, well lives, realising that some of the way our working lives have developed might not be conducive to the best health, negatively impacting commercial performance.

Building resilience isn’t that diﬃcult as a concept. It can just be hard to get around to doing!

◆ A personal resilience model – what are the places, people and activities that keep you sane?

◆ Strong thinking – eliminate ‘thinking errors’ and build optimism and constructive thinking.

◆ Constructive behaviour – sometimes we self-medicate with coffee, alcohol, chocolate or drugs, instant fixes with li le long-lasting benefit. Review this behaviour and form be er habits where possible. At the risk of sounding like your mother – sleep, nutrition and exercise are critical.

AVERIL LEIMON is co-founder of White Water Group

◆ Positive emotions – ﬁnd ways daily to experience positive emotion. Gratitude, joy and delight need to be worked at.

Surviving stress

It is great if you can use less stressful times to build your personal model of resilience, but you also need to think about how to survive when it all goes pear shaped.

Here are a few tips to learn how you can become more resilient to life’s big disappointments:

◆ Accept the setback. Know that this happens to everyone, and you may never understand what happened.

◆ Face your fears. It’s normal to feel insecure, but don’t avoid uncertainty.

◆ Be patient. Reﬂect and think about what you plan to do, and don’t rush, it will only aggravate the process.

◆ Go beyond your comfort zone. Take risks. Go a er that job you think you can’t do, doing so will build selfesteem and resilience.

◆ Find your hero. Think about people who have survived adversity.

◆ Know what you want. If you have goals, it’s easier to make plans and move forward.

◆ Be a problem-solver. Don’t be the victim, instead learn to behave proactively.

◆ One step at a time. To move forward, the enormity of the task – such as ﬁnding a new job a er redundancy – may seem insurmountable. Focus on each step you must take, not the entire undertaking.

◆ Seek support. Talk to friends, family or a coach

◆ Be kind to yourself. Facing disappointments is a source of stress, so make sure to exercise, eat right and get rest. ●

The importance of diversi cation, and how to do it

If nothing else, the past couple of years of turbulence in the mortgage market have served to remind us that it can be incredibly cyclical in nature. Those of us who have been around long enough will have ridden the industry rollercoaster a few times already, but newer advisers could be forgiven for falling into a false sense of security.

It’s quite likely that anyone joining the profession in the lead up to – and during – the pandemic may have been so busy riding the uphill that they haven’t prepared for the inevitable downwards slope. While things are starting to improve again now, the incline is more gradual – and what goes up, must come down.

It therefore makes good sense for advisers to structure their business in a way that enables them to ride the whole of the proverbial rollercoaster and come out as unscathed as possible.

One of the best ways firms can protect themselves from market dips is to diversify their offering. Rather than pu ing all your eggs in the ‘standard homeowner loan’ basket, it pays to branch out into other products, such as later life lending or equity release, buy-to-let (BTL), second charge, bridging loans, development finance, as well as mortgage and income protection.

Although this might sound daunting, it’s something a good network should be able to support you with. At Rosemount, we’re focused on empowering advisers to be able to assist clients at every stage of their ﬁnancial journey, whether that’s buying a home, buying a property to let, investing, planning for retirement, insuring income, and various other opportunities that may present themselves.

This doesn’t mean brokers need to become the experts in all these types of ﬁnance. By joining a network with decent partnerships in place, you can access all the contacts and knowledge you need to provide clients with truly holistic ﬁnancial support for life.

Simplifying diversi cation

We oﬀer a wide range of products and services, but only through partners who share our ethos of delivering the highest standards of expertise and care to customers. Our recent partnership agreement with Loans Warehouse is an example of this, providing Rosemount’s growing team of advisers with the option of referring clients with second charge or bridging needs over to Loans Warehouse

We know that both products are increasingly in demand, and this new partnership means advisers can provide valuable help to those clients, while keeping them within the wider Rosemount family. They can also be safe in the knowledge that their case will be handled by sector experts who we trust to work with our customers.

Earlier this year we also partnered with specialist BTL lender Quantum Mortgages, which enables Rosemount advisers to help landlord clients with a variety of mortgage products, including for single units, multiunits, houses in multiple occupation (HMOs), specialist lets, expat, limited company special purpose vehicles (SPVs), green options, and more.

Another growing area of the market is later life lending, with more borrowers looking for mortgage options to support them into retirement. As a result, more of our advisers are asking us to arrange their equity release training and qualiﬁcations so they can take full advantage of this new income stream.

While things are starting to improve again now, the incline is more gradual – and what goes up, must come down”

Even those who aren’t qualiﬁed in this area will be able to pass the case on to another Rosemount adviser via our centrally managed referral system. Other income streams to explore include mortgage and income protection, insurances, and referrals for associated services, such as conveyancing.

Value for broker and client

Diversifying enables brokers to gain more value from existing clients, as well as a racting new ones. But crucially, it’s also a win for the customer, because it makes you a really valuable adviser to have.

Being plugged into the Rosemount network means you can assist your clients with all their ﬁnancial needs, whether directly, or by referring them to someone we know and trust.

As well as saving them the hassle of doing their own cold research, they will be more likely to get holistic, joined-up advice that looks at their whole life picture – and to keep coming back.

Taking these steps to diversify can really help improve your chances of surviving that next big drop on the housing market rollercoaster. ●

AHMED BAWA is CEO of Rosemount Financial Solutions (IFA)

Each month, The Intermediary takes a close-up look at the housing market in a speci c region and speaks to the experts supporting the area to nd out what makes their territory unique

Focus on... Manchester

Manchester’s market is at a turning point, influenced by both local demand and new national policies that could serve to reshape the city’s property landscape.

The Autumn Budget introduced higher Stamp Duty rates on second homes, a measure aimed at cooling investment and encouraging the owner-occupied market. This policy has significant implications for Manchester, however, where buyto-let (BTL) investment and rental demand have historically thrived.

For first-time buyers, hopes for targeted support have also been left unfulfilled, making it even harder for locals to step onto the property ladder in an already competitive and increasingly expensive market.

Average prices

In the Manchester postcode area, the average property price currently stands at £252,000, with the median price slightly lower at £220,000. Over the past 12 months, the average price has seen a marginal increase of £343. Established properties are priced around £251,000, while newly built homes command a higher average price of £308,000.

In the past year, approximately 10,200 properties were sold, reflecting

a significant drop of 32.3%, or about 5,300 fewer transactions.

The majority fell within the £150,000 to £200,000 price range, accounting for 2,233 sales (21.8%), closely followed by the £200,000 to £250,000 price range, with 1,973 properties sold (19.3%).

The most affordable area in Manchester is ‘M50 1,’ where the average price is a more accessible £125,000. In contrast, the priciest area is ‘M2 3,’ with an average property price reaching £1.2m.

Detached homes have an average price of £450,000, while semidetached properties average around £290,000. Flats in the city are priced at approximately £188,000, and terraced houses average £215,000.

Strong demand

Despite wider economic pressures, Manchester’s property market has continued to show strong demand for a variety of homes. Jamie Thompson, mortgage adviser at Jamie Thompson Mortgages, says: “Manchester’s housing market is diverse.”

Alongside affordable two-bedroom terraced homes, the area also boasts high-end family homes in desirable neighbourhoods. The cityscape is evolving, too, with more quality highrise flats coming to market, ensuring that, in the words of Thompson, “there’s something for everyone.”

JESSICA O’CONNOR is senior reporter at e Intermediary

Julia Brownley, sales director at Manchester Money, says: “In the last few years, we have heard Manchester referred to as the London of the North.”

Manchester’s blend of a major international airport, worldrenowned football teams, and a vibrant arts and food scene paints an attractive picture. Brownley says: “We are seeing clients relocating to the area along with the locals moving house and investing within it – the market is a buoyant one.”

Christian Duncan, mortgage and protection adviser at Manchester Mortgage Centre, confirms that the market is bustling with residential and buy-to-let (BTL) activity.

A buoyant market

TJULIA BROWNLEY sales director at Manchester Money

n the past few years, we have heard Manchester referred to as the London on the North and with the attraction of the one of the UK’s largest airports, home to two world-famous football teams and a thriving music, food, arts and culture scene, we believe it delivers an experience that is hard to match.

Manchester City centre is attractive to a certain demographic of buyers, but the tram network within Great Manchester makes for an easy commute into the city making the outskirts attractive to families. Due to the accelerated growth that the area offers, we

Duncan expects this trend to strengthen in 2025, which could further drive up demand and, eventually, prices.

Madeleine Birtles, mortgage adviser at Birtles Mortgage & Financial Solutions, notes that the usual summer holiday market lull was almost non-existent this year.

She says: “Summer is often a quieter period of the year, but this year has been busier for me than previous years, which shows that people have more confidence in the markets. Supply of properties coming to the market is up 15%, and estate agent available stock is at a 10-year high.”

Diverse demographics

Manchester’s bustling market is partly fuelled by a younger demographic, with a substantial proportion of borrowers being first-time buyers. In 2020, this postcode area housed 1.2 million residents with an average age

are seeing clients that are relocating to the area along with the locals moving house and investing within it.

Manchester City centre and surrounding areas are bursting with developments. Exclusive, luxury apartments typify the types of developments that are now dominating Manchester’s skyline, which attract UK investors but also overseas buyers looking to invest.

The developments are significantly regenerating the surrounding areas, creating new neighbourhoods in around the Green Quarter and Cheetham Hill. With new property comes further infrastructure, and included in some of these developments are leisure facilities, commercial space, public courtyards and even spas.

The BTL market has its challenges, and we have seen many of instances of a change into limited companies. We are certainly not seeing an influx of properties being offloaded. Many landlords are increasing rents to cover the short-term income stream, but also thinking ahead to the long-term property value. Considering locations around Manchester versus rental yields seems to be key.

of 36.4 years, reflecting an overall younger population.Thompson notes that many of his clients are young professionals.

“There are lots of first-time buyers out there still wanting to get on the property ladder,” he remarks, adding that despite media pessimism, many clients have benefited from career advancements and pay increases, leaving them “substantially better off.”

There is also an observed rise in popularity of the ‘Bank of Mum and Dad,’ with parents providing gifted deposits or even remortgaging their homes to help fund their children’s dreams of homeownership.

Birtles notes that as borrowers begin to adjust to the new norm of higher interest rates, many feel confident enough to take that first step onto the housing ladder. She says: “Manchester is popular area for first-time buyers to look at as a lot of younger people settle in the suburbs after finishing degree

courses in the city.

“The suburbs are very popular as they tend to be houses rather than apartments, a lot of the surrounding suburbs have great transport links into Manchester, and also the motorway network for commuting elsewhere in the North West.”

Explaining that many of his clients are dealing with complex credit issues, Duncan says: “We’ve seen an influx of clients coming forward looking for debt consolidation, or looking at the feasibility of a transfer of equity.”

Brownley adds that while her firm serves a wide client base – from firsttime buyers and property investors to clients seeking commercial loans, bridging finance, or solutions for adverse credit, it has recently expanded to assist foreign nationals.

Favoured lenders

When it comes to popular mortgage lenders, options span a range of

Something for everyone

MJAMIE THOMPSON mortgage adviser at Jamie Thompson Mortgages

anchester’s housing market is diverse. You can pick up a two-bed terrace in the towns of Greater Manchester pretty cheaply if you know where to look. At the other end of the market, you’ve got huge family homes in desirable areas and ever more high quality high-rise flats being built, so there’s something for everyone.

There are lots of first-time buyers out there still wanting to get on the property ladder and I don’t expect this to change. People have begun to accept that today’s rates are the new normal and the rates of three years ago were once-in-a-lifetime lows. The most welcome thing at the moment is that customers who were forced to fix at over 6% due to the disastrous Truss debacle have now come to the end of their 2-year fixes and are able to fix at today’s lower rates. Some have chosen to pocket the extra each month, and some to keep paying the same and reduce the term of their mortgage. Those coming off a 5-year fixed from 2019 are still getting an unwelcome shock, though.

Gone are the days when clients’ first question would be ‘what is the very maximum I can borrow?’ Now they come with a monthly budget in mind, and we work backwards from there.

Almost all of my clients are first-time buyers. Many of them are coming around for their first remortgage now that I’ve been in business for five years. It’s really nice to catch up and see how their lives have changed.

Despite all the doom and gloom, in almost every case they are substantially better off, having had pay increases, though this is a reflection of my client base mostly being young professionals early in their career. This idea that everyone is worse off now than a few years ago is simply not the case, though.

I’ve had a few more cases of the ‘Bank of Mum and Dad’ not just gifting their children a deposit, but remortgaging their own home to be able to gift a deposit.

Technology has and will keep playing an increasing role in the sector, at least with some lenders. I had a lender issue a mortgage offer in 13 seconds earlier in the year, with an automatic valuation on the property and using open banking to automatically verify the applicant’s income.

high street banks, regional building societies, and specialised lenders.

Thompson notes that for straightforward cases, borrowers typically end up with one of the major high street lenders, which tend to offer the lowest rates. However, many of his clients often face challenges with these big lenders, especially those in unique financial situations.

He says: “Many clients come to me after having issues applying to the big lenders or being told by another mortgage broker, they can’t get a mortgage due to their circumstances, which is often incorrect.

“For people on fixed term contracts,

locum doctors, or PhD students receiving a stipend, smaller regional building societies are often the way to go.”

As his brokerage specialises in adverse credit cases, Duncan notes that he works with a wide array of lenders.

He adds: “We love getting our teeth into something meaty, but still manage to use a wide spread of lenders from Nationwide all the way up to Together Money. Nationwide is well known for providing the very best mortgage interest rates to consumers the majority of the time.”

While the big six lenders are

commonly chosen by returning clients, Brownley says: “We have particularly utilised The Skipton Building Society and Accord for their first-time buyer offerings and Together Money for our more non-standard and complex purchases around the area.”

A wave of development

Duncan remarks that “there’s plenty of new-build developments coming into the local area,” though he notes that without the Help to Buy scheme, these are not as appealing as they used to be, as “clients don’t have the same affordability as they once had.

Nevertheless, according to Brownley: “Manchester city centre and surrounding areas are bursting with developments.”

These are transforming areas like the Green Quarter and Cheetham Hill, creating vibrant new neighbourhoods with added infrastructure.

Many projects include leisure facilities, commercial spaces, public courtyards, and even spas, making Manchester’s regeneration not just a housing boom but a significant enhancement to local lifestyle and amenities.

Birtles says: “In the surrounding areas, there are a lot of Shared Ownership developments which are very popular with my client base. These give first-time buyers an opportunity to get on the property ladder either as a sole purchaser or joint purchasers.”

Rental landscape

Currently, private rental homes make up 26.7% of Manchester’s housing stock, surpassing the national average of 23.6% across England and Wales.

As a prominent university city and economic hub, Manchester’s rental market remains active, but much like the rest of the country, it faces economic pressures and the fallout of recent policy changes.

According to Birtles, while BTL activity has slowed compared to previous years, “enquiries are still coming through.” She adds that the market’s future may be shaped further by recent Budget changes which could negatively influence investor sentiment.

Brownley points out that while the BTL market has its challenges, there has been an increase in landlords transferring ownership into limited

A busy summer

SMADELEINE BIRTLES mortgage adviser at Birtles Mortgage & Financial Solutions

ummer is often a quieter period of the year, but this year has been busier for me than previous years, which shows that people have more confidence in the markets. Supply of properties coming to the market is up 15% and estate agent available stock is at a 10-year high. Against 2023 there has been an increase of around 20% more sales being agreed, which has resulted in more mortgage enquiries. Manchester is popular for first-time buyers, as a lot of younger people settle in the suburbs after finishing degree courses in the city. The suburbs are very popular as they tend to be houses rather than apartments, a lot of the surrounding suburbs have great transport links into Manchester, and also the motorway network for commuting elsewhere in the North West.

Around Manchester city centre there are always new developments popping up, mainly apartments, which are more attractive to investors. In the surrounding areas, there are a lot of Shared Ownership developments. These give first-time buyers an opportunity to get on the property ladder either as a sole purchaser or joint purchasers. The BTL market is definitely quieter than previous years, but enquiries are still coming through.

Recording breaking demand

TCHRISTIAN DUNCAN mortgage and protection adviser at Manchester Mortgage Centre

he housing market is extremely busy with a mixture of residential, BTL, first-time buyer and home movers looking to do business. I expect in 2025 this will only get better.

Residential mortgage applications account for 75% of the last three months’ worth of business submitted, which were record breaking months for us as a firm. So much so that we’ve introduced another full-time adviser into the team.

The trends we have seen in recent months all surround the media and the lead up to the Budget. Buyers get anxious and struggle making decisions when they’ve got the media telling them what might happen.

As a brokerage out bread and butter is bad credit. We love getting our teeth into something meaty, but still manage to use a wide spread of lenders from Nationwide all the way up to Together Money.

We’ve seen an influx of clients coming forward looking for debt consolidation and or looking at the feasibility of a transfer of equity and buying a partner out.

There’s plenty of new-build development, but without the Help to Buy scheme these aren’t as tasty as they use to be. Clients don’t have the same affordability they once had.

Until three months ago the BTL market was stagnant. But clients are getting ready to pull the trigger on those purchases.

We’ve just seen changes to additional property Stamp Duty and I expect this to impact the number of BTL mortgage applications and new landlords entering the market.

companies to mitigate tax liabilities. She says: “We are certainly not seeing an influx of properties being offloaded,” but many landlords are instead raising rents to maintain income streams.

Duncan notes similar activity from landlords in response to Budget changes, with the past three months seeing a surge in activity as clients prepared fot tax changes.

He adds: “I expect this to impact the number of [BTL] mortgage applications and new landlords entering the market.”

Value of advice

Manchester’s housing and mortgage market is poised at a critical juncture. Government policies, such as increased Stamp Duty on second homes, are reshaping the landscape.

Despite these hurdles, demand remains strong, driven by the city’s rich culture, robust economy, and expanding infrastructure. As it continues to develop and regenerate, the city’s appeal appears resilient.

For both newcomers and longtime residents, navigating this evolving market will require a careful balance between immediate affordability and long-term investment potential, making professional guidance more valuable than ever before.

Duncan says: “I would strongly recommend that anybody looking to secure a mortgage makes use of a broker and completely turns off from outside influences.” ●

On the move...

Hilco Real Estate Finance (HREF) has appointed London-based development and bridge lending specialist

Simon Pollins to join its rapidly growing team.

A qualiﬁed chartered accountant for over 35 years, Pollins joins HREF as senior business development consultant, bringing over 30 years’ experience in residential property lending.

LLandbay appoints Anna Macdonald as independent non-executive director over

For the past 10 years, he has set up and run specialist bridging and development lenders, and has also worked with the

andbay has appointed Anna Macdonald as an independent non-executive director on its board. Anna brings over 20 years of experience, most recently as an investment manager at Aubrey Capital Management, as well as at Amati Global Investors and Henderson Global Investors.

She is also a regular commentator on BBC Radio, BBC TV, Sky News, and Reuters TV.

Macdonald said: “The business has grown signiﬁcantly over the last few years, despite the challenging macro environment.

Bforward to the team during its next chapter

“I am looking forward to working with the team during its next chapter in its journey.”

Philip Jenks has been appointed as a non-executive director for Chetwood Financial Limited, trading as Chetwood Bank.

With over 50 years in ﬁnancial services, Jenks has held leadership roles in several mortgage businesses, including Halifax and HBOS.

In the past 10 years, he served as a non-executive director or chairman for Leeds Building Society, Charter

family oﬃces of ultra-high net worth individuals.

Pollins said: “I have watched HREF’s early progress and numerous transactions since its launch last year, and I am excited to be joining a new lender at such an early stage of its journey.

oﬀering in the sub-£100m lending space is in

“In a fast-changing lending market, HREF’s oﬀering in the sub-£100m lending space is in high demand, and its approach to streamlining access to funding resonates in the property sector at a time when many mainstream lenders are unable to compete.”

access to funding resonates in the property

ibby Financial Services (BFS) has appointed Helena Warne as business development manager (BDM) for Wales.

At Lloyds Banking Group she covered the Wales region for seven years, specialising in invoice ﬁnance and, in her role as area director, leading a team of commercial banking relationship managers.

Time Finance strengthens invoice nance team

Time Finance has appointed Sion Street as a business development manager (BDM) in its invoice ﬁnance team.

Warne said: “I’m thrilled to join BFS and reconnect with business leaders and introducers across the Wales region to address their funding needs and set them up for success.

He previously worked as a business development executive at Bibby Financial Services, and will focus on expanding his network of introducers in Wales and the South West to provide funding for business clients.

Street said: “I’m really excited to be joining Time Finance during an exciting growth phase for the business.

“With BFS’ reputation as a leading independent financial services provider, I’m eager to combine my own local expertise and BFS’s flexible approach to meet the unique cashflow solutions of businesses across the region and support their growth ambitions.”

“With BFS’ reputation as a leading

ﬂexible approach to meet the businesses across the region

"Their commitment to oﬀering ﬂexible funding solutions, coupled with their dedication to helping businesses achieve their goals, resonates with me.”

Chetwood Bank appoints Philip Jenks as non-executive director

Court Financial Services, City of London Group, and Recognise Bank.

At Chetwood Bank, Jenks will advise on strategic decisions and commercial growth, particularly in relation to ModaMortgages and CHL Mortgages.

Jenks said: “Across its diﬀerent brands and products, Chetwood Bank is always focused on

ﬁnding ways to help people ﬁnancially, and that’s an ethos I’m very pleased to contribute to.

“I look forward to helping them execute their ambitious plans for the year ahead, not least with the growth of the new easy access savings product and ModaMortgages’ proposition, as well as the other exciting products.”

Helena Warne joins Bibby Financial Services as BDM for Wales

Hilco expands team with appointment of Simon Pollins

SIMON POLLINS-

PHILIP JENKS

ANNA MACDONALD

SION STREET

WE KNOW YOUR CLIENTS WON’T ALWAYS FIT THE MOULD.

How can we help?

— We take into account earned income up to the age of 70, or even 75 if the client is in a non-manual role

— We’ll consider pension pots, as well as ﬁxed pensions, investment and rental income. Other income can be considered on a case-by-case basis

— We lend in retirement with higher maximum ages than most lenders

— We have a common sense approach to lending and use human beings, not robots, to underwrite each case. This means we can tailor our solutions to each of your client’s needs.

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Discover why more intermediaries are choosing to partner with us.

We’re not just another lender. We’re an award-winning team, building a company we love.

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The Intermediary – November 2024

From the editor...

The Team

Contributors

Contents

INTERVIEWS & PROFILES

From paper to pixels

TECH TRANSFORMATION AND THE WORKING LIVES OF MODERN BROKERS

A fact of life

Safe and simple

TECH IN THE MUTUAL SECTOR

Next steps

‘Soft’ skills

Future demands

AI TO SUPPORT AND ASSIST

Replaced by robots

Working for wellbeing

Investing in change

Is the market waiting for its Napster moment?

Disrupting the market

Changing the game

Understanding users

Why AI can’t be the whole solution

Helping hand, not replacement

Support, not solve

High-quality data

Adopting tech wisely

Servicing tech drives digital transformation

Product

APIs

Migration

Summary

The Inter view.

Phased progression

Building a bridge

Clarity and design

Data driven

Legacy and agility

Future intelligence

A stark choice: Digitise or die

Getting the details right

costs

Competitive advantage

Have we forgotten the borrower in all this?

Operational risks

The value of integrating conveyancing

Working in tandem

Need for modernisation

In Pro le.

Brand refresh, app launch

Changing needs

Connectivity

Boosting tech talent via regional hubs and education

Growing the talent pool

Seeking skills

A new era for underwriting using AI

Strategic allocation

Game-changing partnership

Enhanced client relations

Streamlined veri cation

Voice assistants in onboarding

Beyond automation

The role of tech in meeting sustainability goals

Energy management systems (EMS)

Sustainable materials and retrofitting

Digital twin technology

Water and air quality management

Regulatory and legislative drivers

Mortgage Brain Q&A

What day-to-day challenges does tech like this aim to address?

Does the market need greater connectivity and collaboration?

How can technology help brokers with regulation?

How do you solve today’s problems while remaining flexible?

Could legislation overhaul an appalling process?

Why does this matter?

Secure standards

Get streets ahead with our latest property market insights.

AI in the quantum era

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