Andrew Baddeley-Chappell: More innovation is needed

Michael Lloyd

July 10, 2019

The chair of the Bank of England’s residential forum, Andrew Baddeley-Chappell, has criticised the lack of innovation in the mortgage market and called for more.

Baddeley-Chappell, who’s also principal consultant, homanity, was speaking this morning at a Westminster Business Forum Keynote Seminar about ‘‘The UK mortgage market – sector growth, regulating lending practices and the future for ‘Help to Buy’’

He said: “I’m struggling to see real innovation in the market. This market which used to excite me a lot and scare me at times, has become rather boring.

“It’s hard to blame lenders with intense regulatory oversight. There’s uncertainty in the market. But there’s still niches out there.”

He said that building societies have been leading the way with variation and said there’s still a niche of reaching specialist niche customers.

Baddeley-Chappell argued he couldn’t think of another consumer market that’s made so little progress in the time since the financial crisis.

He added: “I think the main issue to me is customers continue to struggle to operate during the market. I think the choice is more complex than it needs to be and the opportunities to access and compare products are much harder than it should be.

“The fundamental issue is the big uncertainty of future interest rates. It’s very hard to compare 5-year and 2-year rates because no one knows how interest rates will move in the future.

“I do think more could be done to create transparency around that and that there could be more done with technology to help specialists serve niche customers.”

He said that the process of customers getting the most competitive deals has been facilitated by the powerful intermediary market, but argued that lenders have been too slow to improve transparency.

Baddeley-Chappell said: “This is never acceptable and always damaging in the long-term.

“And intermediaries have to do more to disclose their own statistics as to their business…there is more that can and should be done to ensure that customers are getting the best deal for their individual needs from all lenders and intermediaries.

“It’s fair to say overall that customers do benefit from the current market despite its imperfections, because advice is readily available.”

He added that major change is needed to energy use in the home and robust technology that already exists, needs to be used.

He made it clear that these are his personal views, rather than those of his employer.


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