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How would you reshape the property and mortgage market

Journalist: Hannah Smith, Freelance

ended 10. January 2023

Hello! I need mortgage brokers, property experts and property market analysts to give me their views for a cover story for The Intermediary's first print edition (readership is 500-1000 mortgage lenders, mortgage brokers and ancillary companies). The topic is what an ideal mortgage and property market could look like with the right changes and intervention from the government and regulators. Essentially, what would you change if you were in charge to improve the system - this could include everything from access to finance, affordability, house price stability, things that would make it better for consumers and for professionals working in the property sector, Obviously quite a meaty topic to discuss! I won't be able to use everyone's comments and I don't want to waste anyone's time so please don't write an essay, just keep it reasonably short and then I can follow up with a call if I need more detail. Thanks all.
 

15 responses from the Newspage community

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Samuel Mather-HolgateVerified
Independent Financial Adviser at Mather and Murray Financial
Help to Buy has ended, the economy is in crisis and the government didn't think to introduce anything to replace this scheme that will help first time buyers. They have tinkered with stamp duty, but there needs to be something bold and innovative to really stimulate the affordable housing market. The government needs to look at schemes that will incentive house builders (a decades-old problem that no one seems to grapple with) and also buyers alike.

I fear that we have a zombie government, where all of these big decisions will be passed up for fear of upsetting some, despite it being for the greater good. That will happen anyway with so many Tories out to get Sunak, so maybe a new government could bring some new ideas.
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Justin MoyVerified
Managing Director at EHF Mortgages
I would like to see the lenders not be able to sell their own mortgage products. How can any lender be able to offer only its own products, when a market has well over 100 lenders that cater for the diverse needs of consumers? Let the lenders do their best work with the risk management and product design, let the mortgage brokers provide detailed and regulated advice to consumers, and both channels can then make sure the right products & advice are delivered every time.

I would also make some form of mortgage insurance compulsory when taking a mortgage, the number of people taking no or little insurance to cover such an important committment is astounding, and many that do will buy it from an online website with no advice or suitabilty checks. Wouldn't this approach help reduce some of the UK's annual benefit costs?
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Mike StatonVerified
Director at Staton Mortgages
The one major thing that is needed in the property market is to stamp out the constant mis-selling and bullying tactics used by a lot of estate agents and New build developers. They appear to be above the law and this is only detrimental to the client. It makes it hard to swallow watching an unqualified and unregulated estate agent or builder bark out orders and demands that appear to be both unethical and unrealistic. Many people are complaining about high property prices, but these were heavily influenced by greedy builders and estate agents during lockdown and we are now paying the price for that. During lockdown, I had one client offer on a house, a week later stamp duty was scrapped saving him £7k, the next day he received a call from the developer saying the price had increased by exactly £7k. This would not happen if regulated
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Kylie-Ann GatecliffeVerified
Director at KAG Financial
The changes I would love to see would be mainly aimed at first time buyers, and overall affordability. We still see clients time and time again that simply cannot afford to buy in their current area, based on the lenders "affordability" but they are stuck paying rent much higher than what the mortgage payment would be. I appreciate the need for stress testing, but this part of the industry seems dated and I believe a change in this area would open up home ownership to many. If I had a magic wand house prices would be worth a multiple of the average salary in that area - to keep pricing in line with actual wages - as we seem to be moving further and further away from this. But whilst this isn't an option, lenders should be working on a more sensible and realistic approach to affordability, with the backing of the government.
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Rhys SchofieldVerified
Brand Director at Peak Mortgages and Protection
I'd like to see the regulator do a bit more of a job educating the population that talking to a broker is a good idea, and how to find a good one.

The fewer people that end up getting ripped off by a cowboy outfit or end up going direct to lender without realising that very often better deals may lie elsewhere in the market, the better in my book.

The regulator exists to make sure we have a functioning market and to my mind, the biggest barrier to that is lack of financial knowledge.
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Helen LlewellynVerified
Founder at Mediterrano
Thinking more creatively about property ownership could revolutionise the market.

How about more rent to buy options or better still co owing homes with 1 or more others.

This works especially well for second homes, ideal for commuters and those that work from home but want variety of environment.
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Gareth DaviesVerified
Director at South Coast Mortgage Services
Financial education needs to become more prevalent in our schooling systems. The importance of budgeting, saving, planning for future home ownerships etc needs to happen across the education board. This will give future FTBs a headstart and those that really want to achieve home ownership will have more knowledge behind them to do so.

There needs to be some more help for FTBs, and that something cannot be associated with higher premium new-build homes only. It needs to stimulate the whole market.

An area of focus could also be to entice the older generation to downsize. Reductions or the waiving of Stamp Duty perhaps, or the development of more bungalows for example. The amount of 'under-occupied' property owned by the senior generation is staggering, but the reason is a lack of suitable alternative choices for them.
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Joe Garner0
Founder & Managing Director at Joe Garner Consulting
The chronic shortage in available accommodation across the UK creates a constant and consistently inflated increase in house prices over any medium to long-term period.
Build as many Council owned homes as possible to stimulate the construction industry, create employment opportunities and increase the supply of affordable, sustainable new build homes.
Target 500,000 new homes a year with a 5 to 10-year plan to exceed demand. In exceeding demand, we regulate supply and create the ability to increase/decrease the supply of housing. Aside from cooling the housing market by invigorating supply levels to minimise the number of people on housing waiting lists additional benefits include the opportunity to raise environmental and sustainable standards and create employment opportunities.
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Ashley ThomasVerified
Director at Magni Finance
Scrap the stamp duty tax or reduce it to a set level that is fair to everyone. It is great for the government but harsh to those buying a property. It might give much-needed rocket fuel to the housing market after the huge increase in mortgage interest rates.
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Gary BoakesVerified
Director at Verve Financial
Ideas:
Financial Education in Schools around mortgages, budgeting and the housing market.
Rent based affordability- If a customer has a 2 year history of renting, let's take increased affordability based on the monthly rental figure.
The help to buy was a huge success, offering a similar mortgage for 2nd hand homes for FTB would be fantastic but a pipedream.
Improved innovation and education around Interest Only mortgages, we have been led to believe Interest only mortgages are wrong, but with mortgage education, we could show the benefits of interest only if managed well.
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Graham CoxVerified
Director at Bridging Hub
We need to get away from the idea of property as a speculative investment. It's entirely detrimental on so many levels, including increased homelessness, weaker economic spending and investment, as well as laying waste to the aspirations of the younger generation.

The first thing I would do is include house price inflation in the 2% CPI target. I'd also place a temporary moratorium on overseas buyers snapping up UK property, particularly in London. Then remove the Right to buy, whilst giving councils the means to start building social housing at scale again.
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Austyn JohnsonVerified
Founder at Mortgages For Actors
With the number of self-employed people in the UK, it would be stupid not to concentrate on helping them with applications and affordability. No self-employed person will earn the same every month. It's how it works! Why should they have to prove a single solid and continuous income to be able to buy a house? Year after year they have proved their income, why do they need to do it again with bank statements? Plausibility and checking the business is still running should be the best way forward. Let's stop this discrimination towards people who are not employed. Self-employment is a safer career anyway.
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Oliver Fish0
Director at Oliver & Co
I think that lenders should offer a facility to lend money for the cost of the stamp duty as well as the purchase of the property.

This would encourage more people to move and would help get many more first time buyers on the property ladder.

Asides from that we need rates to come down again to a more affordable level around 3 or 4%.
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Zaid Patel0
Director at Highcastle Estates
A key issue impacting the shortage of rental properties is unpaid rents.

Three solutions: First is to include rent payments on credit reports. The second is to provide a quicker solution to evict tenants, not the 6 to 12 months it currently takes. Third, the responsibility of rents for tenants housed by local authorities should lie with the local authority. Tenants are more likely to pay a council than an individual landlord or agent.

Tighten the laws, and suddenly, you'll see happier landlords, meaning more landlords on the market.
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David RobinsonVerified
Co-Founder at Wildcat Law
Bring back 100% and even 125% mortgages for first-time buyers. It is the only way to break the cycle of affordability trapping so many younger people in rental accommodation. This can be done easily and at a low risk to both the borrowers and lenders by maintaining affordability checks.
Negative equity is only a problem to borrowers if they are looking to move but is usually an issue resolved over time as house prices rise again or the debt is reduced. The main issue has always been for the lender's security if they need to repossess but this risk would be significantly mitigated through affordability checks at the outset, potentially combined with longer-term fixed rates as you find in Germany.