Loading…

Housing and mortgage market challenges post-pandemic

Originally published in Society Matters magazine.</p>

<p>By Sarah Howe, CEO, Harpenden Building Society

Originally published in the Summer edition of Society Matters magazine

By Sarah Howe, CEO, Harpenden Building Society

At the BSA Conference in May, Sarah Howe chaired a panel session exploring options to overcome the challenges faced by lenders and the mortgage industry as we emerge from the pandemic.

The panelists in the session at the BSA Conference wasted no time in getting to the heart of the key challenges facing the mortgage market. Whilst recognising government interventions, they questioned whether they will make a long-term difference or just prop-up the mortgage market in the short term.

There’s no doubt that some of those interventions, such as the stamp duty holiday, have created a buoyant market; whilst others have supported struggling homeowners, with households financially impacted by the pandemic taking mortgage payment deferrals. One task for lenders is balancing resource between the demand for new lending and supporting borrowers in financial difficulty.

First-time buyers

Affordability for first-time buyers is front of mind when discussing mortgage market challenges. The panelists raised the issue of the 3% stress test not being fit for purpose; the usefulness of having affordability assessments that include rental payments and the possibility of a privately-funded Help to Buy scheme.

Post-pandemic there has been some positive news for first-time buyers, with the return of 5-10% deposit mortgages. However, with house prices jumping 10% in the past year, has this provided the lifeline first-time buyers desperately need?  Or does the industry need to look creatively at minimum or no deposits and introduce new ways to mitigate risk, such as mandatory insurance?

New builds

Considering the new build market, Kate Faulkner of propertychecklist.co.uk suggested the FCA should look at how to build appetite for new homes, on the basis that the better the demand, the more homes will be built and the more we can mitigate the housing supply crisis. She also highlighted the need to build new homes suitable for older people to free up family homes.

Robert Sinclair of AMI & AFB highlighted the lunacy of heating systems going into new homes that will need replacing before the NHBC guarantee expires, to meet net carbon zero targets. He noted that heat exchangers are currently the main alternative, but they may not be the solution to achieving longer term targets. 

Technology

In 2021 it would be impossible to have a discussion on such a key area of the financial market without considering the role of technology. Recognising the pandemicinduced move to a largely remote workforce, lenders are now looking at how technology can support a more permanent move to flexible or hybrid working.

From a customer perspective, the panelists considered the value of Open Banking. Daniel Broadhurst of nCino, highlighted the ability to streamline the underwriting process, enabling faster decision-making. When challenged on how this automation fits with the building society USP of manual underwriting in niche markets, he discussed that easy access to data supports a flexible approach with greater speed.

Also worthy of note, were comments around buy-to-let lending and how lenders can play a role in tackling unsafe rented homes. Should they only lend to landlords who can demonstrate their compliance with the letting rules and regulations?

In summary, it was clear that there are many examples of the mortgage market emerging well from the pandemic, but just as in any other time in our history there continue to be opportunities and challenges that the whole industry could and should be considering

Panellists:

1. Sarah Howe, Chief Executive, Harpenden Building Society

2. Robert Sinclair, Chief Executive, AMI and AFB

3. Kate Faulkner, Property Market Analyst & Commentator & Managing Director, Propertychecklists.co.uk

4. Daniel Broadhurst, Regional Vice President of Sales, nCino EMEA

 

 

You may also be interested in...

BSA Card
  • BSA.IndustryResponse Industry Response
  • Conduct Risk & Regulation

FOS Consultation on charging Claims Management Companies & other professional representatives

The BSA strongly supports the principle of charging a fee to CMCs.

BSA Card
  • BSA.Event Event
  • Conduct Risk & Regulation

Annual Update & Networking for Boards

This autumn, the BSA is running its first event designed specifically for Board Members (Exec and Non-Exec) and Board attendees. This in-person e...

BSA Card
  • BSA.Event Event
  • Conduct Risk & Regulation

Consumer Duty: Navigating Board Reports

A free webinar hosted by BSA Associate, docStribute docStribute and Woodhurst are collaborating to bring you this webinar series. Following our pre...

BSA Card
  • BSA.Event Event

Building Societies Annual Conference 2024

Building Societies Annual Conference 2024 8th -9th May, Manchester   The Building Societies Annual Conference is the leading event in the secto...

BSA Card
  • BSA.Event Event
  • Audit & Taxation

Audit, Risk & Regulation Autumn Series

This year's annual update returned in a brand new format with a series of topical webinars covering key areas of audit, risk and regulation. This...

BSA Card
  • BSA.Event Event
  • Conduct Risk & Regulation

Consumer Duty: Linking Customer Outcomes to Customer Experience

A free webinar hosted by BSA Associate, Protiviti This webinar will explore ways firms can effectively test, monitor, and report customer outcomes ...

BSA Card
  • BSA.Event Event
  • Conduct Risk & Regulation

BDO's Financial Services' NED event: Consumer Duty Board Champions

BDO’s Financial Services’ team is delighted to invite you to our first FS NED event for 2024, to discuss the Consumer Duty’s ("the CD") next phase of ...

BSA Card
  • BSA.Event Event
  • Prudential Regulation

Preparing for successful regulatory visits

Two half-day sessions on 24 & 25 January 2024

  • BSA.IndustryResponse Industry Response
  • Conduct Risk & Regulation

GC23-2 FCA Guidance consultation on financial promotions on social media

Our response to FCA GC23-2