Brokers debate what's ahead for the industry
In the somewhat unpredictable mortgage market of recent years, trying to anticipate what’s ahead may be something of a fool’s errand, but that won’t stop people speculating, of course. Natural curiosity will always make human beings wonder what’s ahead, and that’s no exception in the world of mortgages. So, what do the sector’s professionals believe is the next big thing on the horizon for the industry?
Unsurprisingly many think it’s AI, though everyone seems to have a different take on just how impactful it will be. Broker Steve Humphrey (pictured left), director of The Mortgage Pod, is positive about it. “The next big thing is going to be utilising technology and AI in the way applications are underwritten,” Humphrey said, “reducing the human time involved, with a lot more tools available to brokers to seek information such as EPC ratings for properties, instantly bringing it back into your CRM system. So I think 2025 is going to be huge for technology in our industry.”
Broker Gauruv Shukla (pictured second from left), managing director of Home Me Mortgages, also acknowledges AI’s growing popularity, but needs some convincing on just how transformational it could be. “Everyone's jumping on the AI bandwagon,” said Shukla. “I don't think it's going to change mortgages if I'm completely honest, when people need that personal advice, specific to their life. But there’s definitely a lot of tools within the AI sector which can help with marketing and admin - all of those different things outside of advice – and speed up the process of the admin work that needs to be done. I think it will just help the small companies get to a higher level, if there's two to three people working in a company and they don't have the funds to hire staff. More companies should open their eyes and start using it to their advantage.”
For Jack Goguelin (pictured centre), broker and founder of Convici Capital, AI is the next big thing too, but he is uncertain how much it will enhance his work with his HNW clients. “If somebody can populate one of these AI systems with two or five years’ worth of completed transactions so that the AI model can figure out what the criteria and terms of the private banks are, that would probably be a bit of a game changer for placing cases,” Goguelin said. “So, it might speed up the process and how quickly you can convert enquiries - that's one thing that we might see. But I don't think it generates more business and creates more enquiries. Me being me, I'll always say that relationships win and that the personal relationship is super important. But there is definitely space for some sort of AI technology to speed up processes.”
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Interest-only mortgages’ revival
Broker Kelly Worthington (pictured right, from All You Need Mortgages, is looking beyond tech and identifies a revival for interest only mortgages, with an emergence of new solutions for first-time buyers. “What's the next trend? Lenders have come back on the interest only side of things, but there's lots of strict criteria around that now,” Worthington noted. “You've got to be a high income earner to get interest only, and obviously with interest only you're only paying the interest, so that could cause problems further down the line. I think more lenders will look at helping first-time buyers with income multiples - that would be good. First-time buyers is my speciality, and I think Nationwide blew a lot of lenders out of the water with their Helping Hand product (the lender’s first-time, fixed rate mortgage).”
Meanwhile, Luther Yeates, head of mortgages at Orton Financial, anticipates more lenders moving into specialist finance. “The trend really is that everyone's trying to seek new ways to actually do more business, more specialist business, “ Yeates said. “Everyone is trying to move into a space that you would have traditionally said is the specialist mortgage space, five or six years ago. Banks are just desperate to find new ways to lend. I'd say that's the main thing we're seeing. The banks I've met with this year, even the big banks, have said, ‘We want to double our lending this year,’ and how are they going to do that? Either they’re going to bring down the pricing for everything – great, but that could mean no specialist lenders, they can't compete anymore.”
He questioned: “Do they leave the market, because they then have to charge more of a premium and they've got less business?”
