News Review


2012 will be a year of sharing the pain by


Robert Sinclair, director,


Association of Mortgage Intermediaries


What is meant to be a tough year with challenges aplenty has commenced with a flurry of more conflicting data. Truly the economy is troubled as it is not growing but it is not vis- ibly contracting and in Lon- don and some cities indica- tors are still positive. However in other parts of the country things do look much less en- couraging. Unemployment numbers


are now pushing up as the government cuts begin to re- ally bite. GDP is contracting slightly with inflation begin- ning to fall closer to target range. Sterling continues to operate within a good range and the government borrow- ing requirement is within tar- gets. So a real mixed bag. The eurozone crisis and what will happen when the USA hits its next debt ceiling still dominates the debate for politicians with really big de- cisions still to be made. The credit rating


agencies will


continue to push the agenda and force action. There is a clear need to (in some way) restructure the eurozone to avoid its fragmentation. The need for brave thinking and avoiding national self-interest in favour of wider issues has not been such an issue for a long time.


“It will be a tough year, but we have survived bad times already and proved up for the challenge”


Closer to home Our mortgage market ended 2011 with gross lending of £138bn - the top end of most expectations. I am also feeling positive about 2012 expecting another £140bn year rather than the more pessimistic numbers that many are pre- dicting. It is the changes pro- posed to regulation that are back in focus. As we assimilate the latest phase of the Mortgage Mar- ket Review, we have a more realistic and workable series


of proposals. With just a bit more work in the areas of transitional arrangements, interest-only and the require- ments on the collection and checking of income and ex- penditure data, then we could have a series of rules that will work well for industry, con- sumers and regulators. The introduction of operat- ing in the customer’s best in- terest, which is laced into the new rules, may prove a chal- lenge when we see how some lending organisations choose to interpret that. In addition, for advice to be considered adequate there has to be enough consideration of suf- ficient loans of the type with- in the range offered, which will lead to much debate be- tween now and final rules. Finally, the shift that it is not the recommendation of a particular product that is the “trigger” for regulation, but the making of a recommen- dation of taking a particular solution or action, leads to the significant removal of non- advised and introduction of the more restricted “execu- tion only” activity. Whilst we will be some


time away from formal imple- mentation of these proposals,


Fast-building a reputation as the home for BTL.


Whatever the Bank of England’s decision on base rates. Aldermore has it covered with a full range of variable and fixed BTL mortgages...


it is likely that we will see su- pervision teams asking lend- ers to embrace the principles as quickly as possible. Also as we see the European Mort- gage Directive continue to take shape, it looks as though approval dates are slipping backwards, leaving Financial Services Authority needing to progress.


Clarity The industry needs clarity. It also still needs an individual registration and authorisation system. I have little doubt that if the FSA had not commit- ted to this in 2010, the indus- try would have done more to establish its own processes. Better firms continue to be frustrated by our inability to make life harder for those who abuse positions of re- sponsibility. We need to be able to identify those who do not act in customers best in- terests, get them out of the in- dustry and it does not appear unreasonable to ask our regu- lator to see that as a shared priority. It will be a tough year, with some pain, but we have sur- vived bad times already and proved up for the challenge. Here’s to a strong 2012.


FOR INTERMEDIARY USE ONLY


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www.mortgageintroducer.com MORTGAGE INTRODUCER FEBRUARY 2012 7


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