We spoke to Chris Schutrups, Group Managing Director of the Mortgage Hut, about how the uncertain economic outlook will continue to affect the housing market and the solutions on offer for self-employed, limited company directors and contractors.
FR: The Mortgage Hut is celebrating its 6th anniversary - how has the mortgage market changed during that period?
The mortgage market has changed massively following the introduction of MMR for direct distribution, which has led to more focus on broker distribution. With the reduction in rates, lenders have had to widen their criteria to maintain and increase distribution. Over the last 2-3 years, there has also been the launch of some great new challenger banks, such as Metro Bank, Atom and Secure Trust, which are opening up the market and driving competitiveness and increased choice for consumers.
FR: You have recently launched a specialist products for niche markets, such as IT contractors, police and cabin crew. How successful has that been?
This has been extremely successful. We've proved that by focusing on customer needs, we are able to plug an advice hole in the market. Having specialist teams who understand the complex income, allows for us to have better customer outcomes and help more people. We have been able to rapidly grow our share of police and airline mortgages and are now sitting as the number 2 broker for police and number 1 for airline in these niche markets.
FR: What plans does The Mortgage Hut for developing other market areas in 2017?
We will continue to focus on our existing distribution, supported by a business strategy that will strengthen our position as a key player in these markets. Using our innovated technology we will continue to grow our distritution whilst implementing our brand new customer nurture process, which allows a very automated put personal approach to staying in touch with out existing clients.
FR: Do you think the industry should do more to support the self-employed, contractors and business owners?
I think the market has come a long way in the last six years. Today, lenders now offer a huge amount of solutions for self-employed, limited company directors and contractors. I think generally the market performs as a market should and offers a wide variety of options. Consumers will always find if they walk into one bank branch they are likely to struggle with complex incomes, however brokers now have some many options at their finger tips to help.
FR: If you could see one major change in the Government’s housing policies, what would that be?
An extension of the Help to Buy scheme as this is soon coming to an end. It’s disappointing that there has been little, or no guidance on if the scheme will be a renewed, or if it is going for good. If it does end, will it be tapered out, or are they going to have a cliff edge effect? Many house builders are reporting that first time buyers using Help to Buy account for more than 60% of the purchases on their sites. It is crucial that some form of support continues, as the supply and sale of new homes is heavily dependent on first time buyers.
FR: What do you see as the biggest issues facing the mortgage industry over the next 12 months?
I believe the housing market will continue to slow due to the uncertain economic outlook and weakened consumer confidence. Slowing transaction numbers will effect new lending volumes. Brokers do have a great opportunity with the introduction of payment of proc fees on product transfers. However, many lenders have rushed to the market to confirm they will do this, but some are very unclear on when it will actually come.