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At the beginning of each year, we see a flurry of articles predicting what to expect in the coming months. New trends that will appear in our market, or new challenges and opportunities.
But if there’s one thing we’ve learned over the past few years, from the pandemic to the war in Ukraine to the “mini budget,” it’s that making predictions is a fool’s game.
Instead, I want to focus my efforts on what changes we are already seeing in the mortgage market and how we can turn them into opportunities in 2023. And the secret to adapting to these changes is to focus our energy not on fighting the old, but building our businesses to embrace the new.
Acceptance of positivity
Despite challenges in the fourth quarter of 2022, £109.5bn worth of property was completed through the Legal & General Mortgage Club last year. This year, the first signs indicate that the situation will start to slow down, with UK Finance and Imla suggesting that the gross lending market will contract in 2023 and 2024.
However, we must recognize the positives and opportunities that this new market presents. An estimated 1.8 million borrowers will see their fixed rate end in 2023, so remortgages will clearly continue to support a calmer buying market. There’s already some evidence in the data – SmartrFit search volumes are hitting new records in January, and our Digital Assessments team diaries are full again. One swallow, as they say, does not make summer, but this is a good sign of healthy demand.
And, despite the predictions of a collapse in housing in the newspapers, statements about falling property prices must be considered in context. Let’s remember how much prices have risen in the last year alone. Hometrack data shows that it is as much as 7.2%.
Acceptance of a new era
The retreat from the record low of the past decade means our market is in transition, but that’s not the only change we’re seeing. A continuous shift is also happening with technology.
Technology can play a huge role in improving our market. Last year we saw our industry struggle with service levels, especially after the ill-fated “mini-budget”. This has resulted in product abandonment and higher rates, which is not good for customers, not to mention future ownership transfer delays that add to frustration. I hope this will lead to fundamental changes in our industry so that the impact of dramatic ups and downs will be lessened and ultimately clients will get the best from us.
We plan to play our part, starting with the decision to transfer technology from the Legal & General Mortgage Club to its own home within our mortgage services business, allowing us to operate not only with our own mortgage club business, but also help other clubs and their partners. also use technique.
Acceptance of regulatory changes
Perhaps the biggest change for our market in 2023, even for our working lives, will be the FCA consumption tax. Regulation is far from everyone’s favorite topic, but the key dates we all need to keep in mind are April 30, 2023 (when companies must undergo due diligence so they can comply with the four rules of regulation)31.T July 2023 (when open products and services must comply with applicable consumer responsibility and safety guidelines) and July 31, 2024 (when open products and services must comply with closed products).
Our industry is off to a positive start, but there is still a lot of work to be done before the first deadline. Many of us already live up to the higher standards set by law, but now we need to record, measure, and validate those high standards we aspire to. However, we all need to keep one thing in mind: Consumption tax is not just about individual transactions. What matters is the big picture and how we manage our business as a whole.
Acceptance of Diverse Leadership
With so many issues competing for attention, we must not lose sight of our mission to create a more diverse and inclusive mortgage market.
I was delighted to welcome my colleague Claire Birdmore as the first female director of the Legal & General Mortgage Club in October. This was long overdue, but still a positive thing for the business.
But diversity in our sector cannot be simply prescriptive. We will all know the numbers. Amy’s Diversity and Inclusion Report found that more than a third (37%) of women disagree that the mortgage industry is attracting a workforce that represents the diversity of our communities. This figure rose to 44% for ethnic minorities and 53% for LGBTQ+ respondents.
We need not only more women and minorities in leadership positions, but also to keep them there by creating an inclusive and supportive culture. We need more male allies, especially middle-aged white men, to do more to encourage diversity in our sector. Just as soccer player Ian Wright led women’s football with a speech calling for a lasting legacy following last year’s Lioness victory, we must do the same in the mortgage market and the broader corporate world. Not only is this the right thing to do, but it will enable our market to better cope with the challenges we face today and seize new opportunities in the coming years.
For my part, I will continue to push for positive change and work with the great initiative led by Amy and Imla under the slogan “Working in Mortgage Lending Shaping the Future” – please join.
Kevin Roberts is Managing Director of Legal and General Mortgage Services.
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