Press comment: Access to mortgage information is key,
but cheaper is not always better
4 May 2018
If you’re covering the interim report of the Mortgages Market Study, please see the following comment from Gemma Harle, managing director of Intrinsic’s mortgage network.
“A huge proportion of the population engage in mortgages, which accounts for over 80% of total UK household debt. It’s crucial this market works effectively for all and it is encouraging that the market study has found that for the vast majority it does.
“A major theme of the interim study and its findings is more access to information for consumers. This can only be a good thing and will mean more informed decisions. With technological advances creating such tools should be straight forward. But will require the full engagement from across the industry and specifically lenders in sharing more information on their lending criteria.
“However, throughout the paper the focus was on price and the tone suggests that cheaper is almost always better. This ignores some of the complexity of mortgages. Parts of the population, such as the growing self-employed population, need flexibility, which can come in a variety of forms. Recognising this and choosing an appropriate solution requires an expert.
“The proposal to extend which mortgages qualify for execution-only mortgage is well meaning, but could unintentionally lead to lower standards and heighten the risk of mis-selling or buying of inappropriate products. The thinking behind this proposal seems motivated by the fact that advisers aren’t leading to cheaper lending. However, the value of advice is not solely cost.
“The study also found that online advice may be the key. This is something the industry should look at and the mortgage advisers may be the perfect testing ground for such innovation.
“It is right that mortgage prisoners are taken into consideration. The mortgage market has advanced substantially since pre financial crisis and customers should not be locked into products that may no longer be suitable. The concern is that the information the regulator is using may now be out of date. The Mortgage Market Study has been a long time coming, first pitted in 2015, with a call to evidence in 2016.
“A mortgage is often the first big financial decision that people make. Unlike savings or insurance, which you can review or alter regularly, mortgages are a long term financial commitment. With interest rates on the rise, that commitment is going to get even steeper. A decision such as this needs careful thought and is often aided by a professional adviser that understands the nuances of the market place.”
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Notes to editors:
Intrinsic is part of Quilter a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.
On a ‘go forward basis’, Quilter oversees £ 111.6 billion in customer investments (as at 31 March 2018).
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Advice and Wealth Management encompasses the financial planning network, Intrinsic; Old Mutual Wealth Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Old Mutual Wealth’s multi-asset investment solutions business.
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· The UK Platform to Quilter Wealth Solutions
· The International business to become Quilter International
· The Heritage life assurance business to Quilter Life Assurance
· Quilter Cheviot will retain its name.
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