Mortgages  

Post-MMR transitional rules to remain centre stage

Post-MMR transitional rules to remain centre stage

Nigel Stockton, financial services director at Countrywide, believes that product transfers will take central stage during 2015 as most major lenders continue to idle rather than accelerate lending and transitional arrangements remain a key area of concern for the industry and regulators.

Speaking to FTAdviser, Mr Stockton predicted Halifax Product Transfers would be a top 10 lender in its own right, adding that post-Mortgage Market Review, other lenders will look to grow their transferring customer books as transitional arrangements continue to be talked about.

The FCA has become increasingly vocal in recent months about lenders failing to apply transitional rules agreed with lenders, which do not require tougher affordability assessments to be applied where existing borrowers are not increasing their borrowing.

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Elsewhere, Mr Stockton does not expect major lenders “to change what they are doing”, with TSB and Virgin Money to grow their market share.

“Apart from these two lenders, it is difficult to see any other competing apart from at the fringes. As the largest lender, Lloyds Banking Group looks assured, with Santander, RBS, Barclays and Nationwide in the next tier. I expect HSBC will widen their broker distribution with Countrywide.

“Coventry, Leeds and Yorkshire will be the first tier of mutuals. All of the other lenders I expect will snipe at the edges, taking their share as they need. Remember, despite the frantic noise, secure, second charge and bridging haven’t yet reached £5bn of annual lending.”

Mr Stockton said he expects 2015 to be a quieter year overall, with modest growth in total mortgage lending to around £220bn, just a 5-7 per cent increase on 2014 figures, while the broker utilisation figure should grow higher in the next 12 months.

“I expect the current 65 per cent broker utilisation to grow further in 2015, with nearly all of the growth in the number of mortgages to be distributed by brokers. This would take the mortgage broker/lender branch split to over 66 per cent, or two thirds in the broker favour.”

“2015 certainly won’t be boring, just a bit quieter than 2014 proved to be,” he added.

ruth.gillbe@ft.com