Lenders are looking to invest in new products and services as their focus shifts following the introduction of the mortgage credit directive and buy-to-let rush.
The March introduction of the Europe-wide MCD, and a spike in BTL activity ahead of a stamp duty rise in April, have kept lenders busy over the past year simply to ensure compliance with regulation, a spokesperson for the Council of Mortgage Lenders said.
But younger institutions Atom Bank and Metro Bank have recently launched new, faster, cheaper digital services, with attention now turning to the bigger lenders.
Peter Rogerson, commercial director for mortgages at Virgin Money, said the time was ripe “to find more innovative solutions to help people buy a home”.
“Fast start options, longer terms, shared equity options or flexible mortgages, we collectively need to do more to help customers with their affordability challenges,” he told delegates at the annual CML lunch.
“Now we have come through changes that have taken a great deal of time and investment, I am sure lenders will turn their attention to developing more innovative solutions for our market.”
Henry Woodcock, principal mortgage consultant at technology firm Iress, said post-MCD, intermediaries “expect lenders to invest in innovative technology and reduce application processing times over the next 12 months”.
Recent research from Iress in April revealed a drop in lenders offering an online view of advisers’ cases, from 52 per cent last year to 44 per cent so far in 2016.
A quarter of lenders do not provide any online case tracking at all, according to the research.
But Barclays, Lloyds and Halifax, as well as Virgin Money, are poised to embrace research and development spending.
Ian Wilson, head of Halifax Intermediaries, said investment will be led by customer feedback, and could include enhancing existing policies and spending on technology “as needs change”. It is currently developing its self-employed and contractor policy, and more positive use of allowances, he said.
A spokesman for Barclays said technology and services updates for brokers and customers are planned during the year, and the bank is “very close” to launching a new version of one of its mortgage products.
Phil Rickards, head of Lloyds Banking Group subsidiary BM Solutions, said “the market continues to evolve at pace”, which could quicken its investment in research and development.
Last year Metro Bank launched one of the market’s first switching portals for intermediaries. Head of mortgage distribution Charles Morley said newer lenders have to innovate to gain market share. “If things go well, established players will often adopt what they’ve done,” he said.
“The run-up to MCD took up a lot of delivery time, but we specifically built in the time to work on other things.”
Earlier this month, new brand Atom Bank promised its completely digital strategy would bring both savings to customers and ease of use for brokers.
Michelle Lawson, director and adviser at Lawson Financial, said she wants lenders to provide a definitive list of documents outstanding, the ability to upload and download, to communicate directly with underwriters, auto certification and certifying on a portal.
“I like that the underwriters don’t look at a case until all documents are received. It speeds things up, as they aren’t wasting time on incomplete packaging.”
peter.walker@ft.com
