The Lending Market in the UK by Bob Hunt (Paradigm Mortgage Services)
Bob Hunt, CEO of Paradigm Mortgage Services has a deeper look at the state of the UK lending market because sometimes numbers tell everything you need to know.
Looking at the latest gross lending figures to be published by UK Finance you can get a real grasp of what is happening beneath the surface of the mortgage market, and also what impact a new generation of lenders are having, particularly in the intermediary space.
The universal picture – despite plenty of negativity around the market at present – is positive.
Gross lending finished 2017 at £257bn, up 4% on the previous year, and (mainly due to a very strong remortgage market) it’s anticipated that 2018 will finish ahead of that.
UK Finance has also published its first set of product transfer data.
With it on course to be around £200bn this year, let’s just say it’s sizeable, and there are clearly plenty of opportunities for advisers in this part of the market.
Delve a little deeper
Talking of lenders, a quick look at the top 20 would suggest that little has changed in terms of who populates the table.
However, delve a little deeper – and a little further down – and you’ll see some notable showings from a number of specialists and challengers that might be delivering a flutter of nervousness to the Big Six.
Those who are relative newbies to the market are pushing ahead and taking a growing share of business.
It is particularly interesting to see those lenders who have put technology at their heart of their propositions, not just forging an identity in the market but clearly appealing to many by growing business volumes.
This appears to be an underlying theme within the lending community.
We envisage lenders who continue to push the digital envelope will make further inroads into the traditional mortgage market, particularly in the mainstream parts, given it is the most open to the quickness and slickness that enhanced technology can offer.
It is interesting that lenders like Vida and Foundation are making a significant push forward.
It also goes without saying that we have a vibrant specialist sector at present and, even with buy-to-let purchase business tailing off slightly, the remortgage part of this sector is still strong and will continue to be for the future.
Also, in other specialist niche markets, specifically the later life and equity release market, we are seeing increasing levels of business.
As more mainstream operators look to service those in later life, one might expect transaction levels to increase right across the board.
Finally, both advisers and lenders might wish to look at the opportunities, and review propositions, within the new-build market, which have grown considerably with an increase in government funding.
All in all, the statistics appear to show a very healthy marketplace with the intermediary remaining right at its heart.
Those lenders wishing to make further progress will no doubt be looking at the adviser community to help facilitate their advances – with 75% of all business going through the channel, why wouldn’t you?