Mortgage Broker Industryhypothecary industry
Just this moment in time shows how fast the tempo of transformation has been over the last ten years. In this sense, what are the next 10 years for our industry? The Mortgage Strategy asked some of the best known firms on the board to remove their crystals and forecast what the mortgage and real estate sector could look like in 2027.
A decade ago, the regulation of the markets was much easier than it is today, leading to more relaxed lender requirements. The subprime sector flourished, drove by a dozen non-bank creditors, often financed by US mutuals. In 2007, total loans peaked at £356 billion.
In general, the tecnology was crude, and mortgage interest was much higher than it is today. As a result of the global economic downturn, almost every non-bank creditor fell the Berlin Wall and the number of brokerage houses fell to around 10,000, only a third of the 2007 number. Credit issuance experienced a similarly sharp decline, falling to 133 pounds.
Afraid of a repetition of loosely applied loan granting practice in the run-up to the financial turmoil, the Financial Services Authority - the former City Guardian - launched the Mortgage Markets Review in 2014. The MMR marks the end of an age for the mortgage markets with creditors tightening the rules after the subprime mortgage crises.
What will the 2027 state of the art be? Only last weekend the Bank of England increased its key interest rates to 0.5 percent for the first consecutive year. We expect it to rise further, but gradually and in small steps, possibly 0.25 percent at a stroke.
In the three years following the end of the crisis, loans had declined by almost two third. However, here too, our experts' estimations of where the loans will be in 2027 are very different. For Sinclair, loan approval is expected to be "around 20 percent higher than at present" - around 294 billion or 17 percent below the 2007 high.
I am currently forecasting 255bn for 2017, which happens to be almost 4 per cent more than last year. Mortgage Strategy in February 2015 report how creditors invested large amounts in their on-line platform to gain more immediate borrower. The intermediate part of the overall portfolio is at its highest level and is not expected to grow any further.
Nevertheless, Tucker and other analysts believe that brokerage will continue to be the enabler of the markets. It will be an important driving force for what the futures hold for the broker advisory framework, but I can't see the situation where broker are taken out of the equation outright. "The unstoppable progress of our online skills will, if anything, free up space to do what real estate agents do best: provide their clients with very individual and service-oriented guidance and interaction.
According to a recent poll conducted by the Legal & General Mortgage Club, 49 percent of brokerage firms see robot consulting and tech as the greatest threats to their businesses over the next three years. The Mortgage Brain CEO Mark Lofthouse agreed, although he believes that selling on-line will be restricted to easier cases.
"AI is progressing so fast that it should be able to give decent guidance in some cases by 2027. Given that the technologies will be playing a greater part in the markets, what kind of utilities will the real estate agents use in a ten year period? The most important utilities used by the real estate agents were mobile phones (for phone and text calls), fixed networks, e-mails and facsimiles.
Since then, tech companies have built multi-lender single-application delivery systems that eliminate the need for broker re-entry. It is Tucker's belief that the AI will help to free agents from many administration duties and help them better keep in contact with clients. Mortgages are not the only sectors that will profit from technical progress.
Real estate tech companies spend billions of lbs a year on ways to make the home buying experience faster and easier. Rightmove Proprietary website is just one of a number of companies that have tested VR headphones that allow customers to view multiple features in a single day without having to visit any of them.
Says: "I can see a period when a tenant would like to visit a real estate with a VR and book it with a click of a mouse.