The Lenders’ Perspective Paul Broadhead Head of Mortgage Policy Building Societies Association

Mortgage finance supply Consumer barriers to home purchase Developments in the market Agenda

The Mortgage Market

Consumer Outlook

Consumer Demand

High LTV mortgage availability

Low interest rates

Market Developments Help to Buy: Equity Loan Help to Buy: Mortgage guarantee Right to Buy Self Build

Help to buy: Equity Loan Government provides equity loan up to 20% of property value Interest free for 5 years Repayable within 25 years or on sale of property Open to all buyers Newly built properties only

Help to Buy: Equity Loan A number of lenders have signed up Over 15,000 reservations since April launch Gives developers confidence to build High profile scheme

Help to Buy: Mortgage Guarantee Opened for Applications 7 October Designed to increase lending to borrowers with small deposits Government will guarantee a portion of lenders’ losses about 80% ltv for a fee Open to all buyers Open to all properties up to a value of £600,000

Help to Buy: Mortgage Guarantee 5 of the 6 largest lenders have joined Designed to address market failure in the provision of high ltv loans Many mutuals already very active in this sector though MIG, so will they benefit from joining? What about the unintended consequences?

Help to Buy: Mortgage Guarantee Temporary intervention So were Fannie Mae and Freddie Mac Could there be a cliff effect upon exit? Is it really needed? It is vital to monitor the recovery of the ‘housing market patient’

MMR All change from 26 April? Assessing affordability Stress testing Advice Supervision

AssocRICS AssocRICS + valuer registration scheme A more specialised qualification – not necessarily a bad thing We need more valuers – AssocRICS could help

Independent commission on the valuation market Initial recommendations: Lender should pay for the valuation Valuation-specific insurance Use of AVMs Withdrawing confetti letters Retaining copies of valuations

Independent commission on the valuation market Next steps: Conflicts of interest Professional indemnity insurance Instructions/terms of engagement Quality of valuations

Why lenders need valuers now more than ever Japanese Knotweed HS2 Solar panels Flooding Self build

Any questions?