In the mortgage market we can often get carried away with talk of innovative new products but how much of this is actually innovation rather than evolution?
Marcus Dussard is sales director at Hampshire Trust Bank
In times gone by, whispers of any new innovation often emerged with a tangible sense of intrigue but has it now simply become a buzzword for the masses?
So, in the spirit of science and technology I thought I would undertake a highly scientific test of my own to see just how obsessed we have become with the word innovation.
With that in mind I opened Google – other browsers are readily available – clicked on the news tab and, you guessed it, searched for innovation. This generated about 388,000,000 results (0.24 seconds). In contrast, a search of evolution generated about 180,000,000 results (0.38 seconds).
Google also highlighted many definitions of the word, all of which are very unspecific in their own ways. Of course, this is a highly subjective word which, quite rightly, produces plenty of discussion and debate. In short, it can mean many different things to many different people but, as with most things in life, overuse will inevitably blunt any originality if we are not careful.
In the mortgage market we can often get carried away with talk of innovative new products but how much of this is actually innovation rather than evolution?
Taking this back to basics, a mortgage is mortgage. No matter how we dress this up or how many bells and whistles we attach to it – it is what it is. When it comes to mortgage products, the industry has developed and delivered so much over the years that we are now severely limited to what can be classed as ‘new’. And ‘new’ is a fundamental element in my personal definition of innovation.
Which means that I tend to take any announcement around product innovation with a little pinch of salt. After all, is a five-year fixed rate with a two-year early repayment charge which allows people to do a light refurb and still move onto the term product classed as innovative? Some people may deem it as this, personally I think it tends to fall more in the product evolution category. By the way, I am referring to our 5:2 product.
Another example is how we look at our holiday let product as, in many ways, this sums up what HTB is all about. We approach this by approaching local letting agents and collating information about the high, medium and low seasons with variable occupancy rates – essentially data points which are specific to that locality. Meaning that how we assess a holiday let in the Lake District will be completely different to Cornwall or Central London.
Which again leads to the question - should such an approach be classed as innovative or evolutionary?
Specialist lenders are often classed as innovators but, in many ways, we’re not trying to reinvent the wheel. From a HTB perspective, it’s all about the criteria and those little nuances that we can find on a case-by-case basis to drive a borrower to the right solutions, and for us to deliver the right result in a responsible manner.
The next time you see the word innovation in a headline, maybe ask yourself what it actually means to you. There may be no right or wrong answer but it’s never a bad thought-process or conversation to have.
