Family Building Societywants tolaunchintoretirementinterest-only mortgages, Keith Barber, director of business development at the society revealed.
Family Building Societywants tolaunchintoretirementinterest-only mortgages, Keith Barber, director of business development at the society revealed.
Barber saidhe’ll be able to discuss the society’s launch in more detailby the end of Q2.
Family will also make changes to its offset rangearound Autumn time, which willinvolve changing the categories of people who can use offset.
Barber said: “Retirement interest-only is important to us. Later life lending is one of our key strengths.
“With offset, we’re looking at helping self-employed people in the contractor market make better use of the funds tied up in their business.
“We think it’s a niche offset will help with. The main plan will be to carry on with the momentum we’ve built up the last couple of years.”
He praised theFinancialConductAuthority’srulings on retirement-interest only mortgages but criticisedthe regulatorfor a “slight disconnect” initsthinking.
Barberadded: “We’ve been waiting a while for the FCA to finalise the rules on retirement interest-only and we’re very pleased to see them in place. They’ve listened to feedback and done something positive for consumers so it’s a tick in the box for me.
“But I think there’s a bit of an asymmetry in place in that the rules only require the adviser to say a lifetime mortgage might be available and might be appropriate but they haven’t amended the rules in the lifetime mortgage space to say that a mainstream mortgage might be available and might be appropriate for the customer.
“Everything they’ve said is helpful but I just think they should’ve gone a step further in their rule changes and made a symmetrical change around that disclosure because of the overlap between the mainstream and lifetime mortgage markets.”
Family has published record results in 2017, seeing an increase of 33% in mortgage applications during the year andgrowing its market share by 17%.Itincreased market lending from £267m in 2016 to £310m in 2017 and Barber reportedthatthe lender has started strong in 2018 too.
He said: “This year has got off to a good start but we think 2018 will be a harder year so we’re expecting similar results to last year but they won’t be the same percentage increase.
“The lending volumes, however, will be similar over the course of 2018. I think there’s more competition around for remortgage business and competition will keep rates down.
“It’s going to be interesting to see what the latest inflation report says on the 10 May and what they do about interest rates. We hope our latest set of pricing is appropriate even if the Bank of England pushes rates up.
“With all the uncertainties around Brexit, the path of interest rates–and we’ve seen a lot of media comments about consumers tightening their belts and seeking value–I can’t help to think the market isn’t going to be as buoyant as many would like us to think.
“If we do as much gross lending in the market as last year, I think we would have had a reasonable result as an industry but I can’t see the growth some others predict.”
Despite the buy-to-let changes such as mortgage tax relief, a 3% surcharge for landlords and stricter underwriting for portfolio landlords, Familyhasgrownitsbuy-to-let side of the business.
Barberadded: “There’s more demand for buy-to-let than we feel we want to take on at this point. We’re doing a lot of remortgage business and some work with professional landlords on portfolios.”
The society lends to limited companies, although that’s only a small percentage of the business. But Barberisworrieditwould at some point become a targetofmortgage tax reliefchanges.
He added: “It depends on the flavor of the government. I don’t think it would happeninthe short-term with this government. If it changes and we get Labour, I suspect we’d see a range of tax changes.”
