Government needs to step up to address affordability, it's suggested
Prospective buyers are enormously challenged to afford property in the current market, with one government after another failing to add enough affordable homes to the UK’s housing stock, it’s claimed.
Tom Denman-Molloy (pictured), intermediary sales manager at Mansfield Building Society, is urging Westminster’s decision makers to commit to a policy that addresses such a pressing issue.
“Affordability is a huge challenge at the moment,” Denman-Molloy told Mortgage Introducer. “There’s a generation of borrowers who have only ever known cheap money and record low interest rates. I think there’s a little bit of expectation setting that borrowers need.
“Successive governments haven’t added enough affordable housing stock to curb house price inflation. I would like to see a government that’s committed to delivering a housing policy which creates enough affordable housing. Budgets will be incredibly tight for whoever wins the election though.”
What is the government doing to address an unsettled economy?
Political campaigning in the forthcoming general election is likely to highlight housing challenges, Denman-Molloy believes, and he acknowledges the current incumbent of 10 Downing Street has been focused on calming a wayward economy.
“The primary goal of government and the Bank of England more recently has been to get inflation under control and bring about more stability,” he observed. “This has been tough but necessary and we certainly don’t want to go back to the rate instability that we saw under Liz Truss. With more stability and inflation slowing, we’re currently seeing rates steadily reduce in the market.”
Denman-Molloy is optimistic that over the next 12 months the industry could explore some fresh approaches to the affordability issue.
“I think there will likely be some innovative ways to look at enhancing affordability,” he considered. “Whether it’s following some of the changes we have made, such as introducing a revert-to-rate or offering more long-term fixed rates that stress at pay rate, or perhaps something else entirely. It’s certainly one of the biggest challenges most borrowers face so I think lenders will look to tackle that.
“There’s talk about really long-term fixed rates of around 25 years too, but we’ll have to wait and see whether a funding model can work for these schemes and whether there truly is demand for them.”
READ MORE: Mansfield introduces enhanced Versatility Range
How complex are borrowers’ circumstances today?
A key headache for brokers is overcoming the complexity of borrowers’ cases, Denman-Molloy suggested.
“Complex is a term which is bandied around a lot, but the reality is that borrowers’ circumstances are more complex now,” he declared. “Intergenerational finance, multiple income streams and credit blips due to the pandemic or the cost-of-living - it can be a real minefield.”
Its history may date back to 1870, but Mansfield Building Society takes a pragmatic approach to today’s challenges, and a flexible approach to underwriting.
“Whilst criteria search engines do a great job, the team here also provide a lot of value by taking a common-sense view on quirky cases,” Denman-Molloy noted, “We can even get an underwriter to review it before it goes to DIP.”
The Mansfield, as it’s known, describes itself as a mutual organisation, run for the benefit of its members. It has thousands of savers and offers a wide range of residential, buy-to-let and shared ownership mortgages.
Denman-Molloy looks after its intermediary sales team and supports key broker relationships, particularly with networks and clubs.
“A key part of my role is raising awareness of our flexible criteria, including our Versatility range for complex cases and our new Credit Repair range for those with credit blips,” he explained.
“In the role that I do, I really enjoy getting to speak to people from all over the UK and from all walks of life to understand their businesses and how they are helping their clients. Given the types of lending that we do at Mansfield, I also get a buzz from helping brokers place cases. Not only have you helped solve their problem, but you also really feel that you’ve helped them grow and empowered their client.”
He shared: “Like a lot of folk, I fell into financial services. I took a temporary Christmas job just following university and worked my way up. I started my journey at Mansfield in direct mortgage sales and eventually moved over into intermediary sales.”
Denman-Molloy has an approach that he aims to follow in business.
“Be yourself!” he urged. “Everyone else is already taken! I think being genuine is really important, not only in order to find what truly makes you happy in terms of the role that you do but also the interactions you have with others.”
