Mortgages  

MMR uncertainty lifts market

MMR uncertainty lifts market

Uncertainty remains over the commercial effect of the mortgage market review a year after its introduction, although brokers remain hopeful, John Heron has said.

The director of provider Paragon Mortgages, said brokers had given different responses when asked how MMR had influenced business volumes, suggesting there was a mixed picture of how they felt the rules, introduced on 26 April 2014, had affected them.

Mr Heron said: “This uncertainty is not unexpected. As with any significant change in regulation there will always be a period of adjustment, but it is important the industry monitors this carefully.”

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Research among 200 intermediaries in the first quarter of 2015 revealed that 43 per cent thought the MMR had no effect on business volumes, while 24 per cent reported an increase in business. However, 25 per cent said they had experienced a decrease.

How brokers feel the MMR has affected business volumesPercentage
No effect43%
Increase24%
Decrease25%

Source: Paragon Mortgages

Lenders were positive about the changes, though some acknowledged initial market disruption.

According to Miguel Sard, head of Santander Mortgages, the changes have been positive overall. He said: “MMR has brought about disruptive change for the market in the most positive sense. Implementing the required changes presented a number of challenges, but the industry has come out the other side stronger, fairer and more sustainable as a result.”

Others expected the mortgage market to perform better now the changes were in place and lenders had become accustomed to them. Andy Knee, chief executive of property services firm LMS, said: “A year on from the implementation of MMR, lenders have overcome any initial hiccups and have adjusted well to the new regime.

“Rather than erring on the side of caution as they might have done last year, lenders are now expected to grow their business this year, equipped with a firmer understanding of the lending criteria now in place.”

Adviser view

Ray Boulger, senior technical manager for London-based John Charcol, said: “Overall there has been a positive commercial effect for brokers because people have to get advice on mortgages. I think the lenders would have been happy to stick with the old conduct of business rules rather than additional regulation.”