Richard Rowntree, UK mortgages director at the Bank of Ireland has opened the UK Finance Annual Mortgage Conference as chair of the event.
In his opening speech, Rowntree expressed his delight at seeing so many attendees from the “diverse industry”.
The event was scheduled in line with the proposed date for this year’s budget which was postponed due to the Brexit delay and upcoming General Election.
Rowntree claimed that affordability, customers with inactive lenders on reversion rates and the ongoing transition from LIBOR to SONIA were all issues facing the sector.
It is these areas, Rowntree said, where the mortgage industry faces “profound” regulatory changes over the coming years.
In an overview of mortgage market trends, Rowntree added: “Despite the ongoing uncertainty, overall the mortgage market has continued to see steady growth in recent months.
“UK Finance’s latest figures show there has been steady growth in the number of first-time buyer mortgages in the year to date.
“This would suggest that support from parents and schemes such as Help to Buy are continuing to boost the number of borrowers getting onto the housing ladder.
“Gross mortgage lending across the residential market is also holding up at over £22.3bn in September 2019, up almost 4% compared to the same month last year.
“However, it’s too early yet to tell whether this recent growth will be sustained in the medium to long-term.”
Rowntree also suggested that the impact of recent tax changes on demand for new lending in the buy-to-let market could be “beginning to ease” thanks to the first yearly increase in the number of buy-to-let loans seen in July since October 2017.
Despite this, Rowntree claims that the buy-to-let market is yet to recover from the change in stamp duty in 2016 and upcoming tax changes due to come into force next year.
Rowntree continues: “We’ve also seen product transfers become more popular, with 292,500 homeowners switching product with their existing provider in the second quarter of 2019, up 7% year-on-year.
“This suggests that many of those who would traditionally have taken out a pound-for-pound remortgage are instead now switching products internally.
“These figures also show that customer engagement remains high and the majority of mortgage customers switch to a new deal shortly after their previous deal expires.”
In the speech Rowntree discussed upcoming FCA figures which looked into borrowers with inactive firms.
He said: “[These figures] will give us a better sense of how many customers may be able to be helped and inform the industry in developing products that meet these customers’ needs.
“However, it’s important to remember that it will be up to individual lenders whether they offer products under the new rules, depending on their current commercial and risk appetite.
“Given the complex changes that lenders would need to make to their lending policies, underwriting, systems and staff training, we also need to be mindful that it could take some time before any new products are in place.”