FUTURE DEMANDS AN ANTHOLOGY OF IDEAS - Insights on the housing and mortgage market in 2021 & beyond - HL Partnership
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FUTURE
DEMANDS
Insights on the housing and mortgage market in 2021 & beyond
AN ANTHOLOGY OF IDEAS
JA NUARY 2 0 2 1
1
CONTENTS
INTRODUCTION
Foreword 04
Contributors 06
The year in data 08
ESSAYS
A plan for our shared future Rt Hon Christopher Pincher MP 10
Estate agency in 2021 David Plumtree 14
Time for some joined up thinking Simon Brown 18
Vive la révolution! Maria Harris 22
At the end of the storm, there's a golden sky Ying Tan 26
Something remarkable happened… Stephen Smith 30
Futuristic lessons from the Stone Age Payal Jain 34
Resilience in the face of the storm Alex Maddox 38
Subscribing to change Niki Cooke 42
The role of leaders in challenging times Dominic Scott 46
Home is where the heart is Jeremy Duncombe 50
An insight led future Damian Thompson 54
There's no such thing as a free holiday Andrew Montlake 58
Beating the pandemic together Louisa Sedgwick 62
Data: evolution or revolution? Phil Bailey 66
2 3
FUTURE DEMANDS FUTURE DEMANDS
JAMES TUCKER That’s the question we posed the insightful The way the industry has leant on tech is
CEO – TWENTY7TEC experts you’ll find in this anthology, and game-changing, but that’s only half the
it’s been inspiring to have discussed big solution and, as 2020 showed, great
ideas with such an eclectic and smart set things are only achieved by combining
of authors. innovative technology with empathic
people. And the past year has shown our
It got me thinking about how fast things can industry is full of both.
change. After all, this time last year who
would have predicted what was to unfold? Since 2015, we’ve been at the heart
of the industry’s evolving technology
It’s been a challenging year, and my heart transformation, and it’s been a privilege to
goes out to everyone who has suffered in work with so many exceptional individuals,
this most difficult of times. But, there is a businesses, and financial institutions. We’re
light at the end of the tunnel. committed to delivering the future tech
demands of each of these, and it’s been a
Of course, there are aspects to pre-pandemic greater honour again to have been by their
life we miss. For me, it’s golf with friends. For side throughout the storm.
my kids, it’s the days when their dad wasn’t
the world’s most impatient home-schooler. We’ve seen this collaborative approach
replicated across the entire spectrum of
However, when I compare the mortgage home buying and selling, and we see the
FOREWORD sector of early 2021 to a year ago, I see an
industry that – while battle-scarred – is
same outcome – a better future for all.
WELCOME TO stronger and more collaborative because
of what we came through together.
We’ve proven we can work as a collective
sector and change at pace. What if we
FUTURE DEMANDS questioned all those things that ‘have always
It’s been a source of inspiration to see how just been’? What if there’s a better way?
– despite what the pandemic threw at our
industry – we continued to look out for each 2020 proved that through technology and
other, pick each other up when needed, and collective thinking, we can survive. If we
move forward. continue to listen, talk, and collaborate
together we have the chance to thrive.
This anthology was conceived as the answer What if there was a place where informed
How did our industry achieve this? I think
to a question starting with two of my mortgage and property thinkers could share
it comes down to two things – people That’s the ethos within this anthology, and
favourite words, ‘what if?’ their ideas and start conversations that
and technology. I hope you derive as much value as I did
could make buying homes in the future
from the ideas and analysis brought to you
We’re passionate about how technology can better for all?
from some of our industry’s finest minds.
make buying homes simpler, faster, and
more efficient, and we’re far more interested In the UK over 800,000 of us make our
in what we don’t know. After all, if you don’t livings from sectors that build and help us
seek out new ideas, don’t be surprised if buy homes. Meanwhile, more than one
you’re left behind. million homes are bought annually – a third
by First Time Buyers. After such a difficult
As such, the question formed itself. 2020, what does the short and long term
future look like for these people?
4 5
FUTURE DEMANDS FUTURE DEMANDS
CONTRIBUTORS
RT HON DAVID PLUMTREE SIMON BROWN MARIA HARRIS NIKI COOKE DOMINIC SCOTT JEREMY DUNCOMBE DAMIAN THOMPSON
CHRISTOPHER PINCHER
Group CEO (Estate Agency) CEO Non Executive Director Head of Intermediary Managing Director Managing Director Group Managing Director
MP, Minister of State Connells Landmark Information United Trust Bank Twenty7Tec Alexander Hall Accord Mortgages Aldermore
for Housing Group
Christopher Pincher MP David is Group Chief Simon is CEO of Maria is a Non-Executive Niki is the 2020 Dominic is Managing Jeremy is Managing Damian is Group
is a Conservative Party Executive (Estate Agency) Landmark Information Director at United Trust Women in Financial Director of Alexander Hall Director at Accord Managing Director at
politician, and has of Connells, and has been Group, which provides Bank, and a fintech and Technology winner and and Chair of the Afro Mortgages and Head Aldermore, and a data-
served as Minister of labelled amongst the most data and legal support digital transformation Head of Intermediary Foxtons Network, and of Mortgage Distribution analytics advocate with
State for Housing since influential people in to property transactions. consultant in the financial at Twenty7Tec Group, ranked fifth in the 2020 at Yorkshire Building twenty seven years of
February 2020. UK property. services sector. transforming financial Mortgage Global 100. Society. He is also the financial services
services’s businesses. Deputy Chair of IMLA. experience.
YING TAN STEPHEN SMITH PAYAL JAIN ALEX MADDOX ANDREW MONTLAKE LOUISA SEDGWICK PHIL BAILEY
Founder & CEO Non Executive Director Chair Capital Markets & Managing Director Chair Sales Director
Dynamo Twenty7Tec Women in Data Digital Director Coreco IMLA Twenty7Tec
Kensington Mortgages
Ying is Chief Executive of Stephen is Non Executive Payal is Managing Director Alex is Capital Markets Andrew is Managing Louisa is Chair of Phil is Sales Director
Dynamo Mortgages, and a Director at Twenty7Tec, of JCURV and Chair of and Digital Director of Director at Coreco the Intermediary and for Twenty7Tec, helping
qualified accountant with a and Deputy Chairman for Women In Data, and was Kensington Mortgages, Mortgage Brokers, and the Mortgage Lenders lenders and brokers
background in investment the Mortgages Advisory recently recognised as the with over twenty years' award-winning 2021 Chair Association (IMLA) solve their problems
banking having worked for Board at the Financial most influential data experience, including of the Association of and Managing Director through smart
Goldman Sachs. Services Forum. professional in the UK. securitisation and interest Mortgage Intermediaries. Mortgages at Vida technology solutions.
rate risk management. Homeloans.
6 7
FUTURE DEMANDS FUTURE DEMANDS
THE YEAR IN DATA Product Availability in 2020 Millionaire’s Club
Searches
27.02.20 for £1m+
property value
Highest:
Total Searches 2020 and Q1 Prediction
20,302 2.97%
16.04.20 Searches
for £1m+
mortgages
500,000 Lowest:
450,000
7,784 0.82%
Highest and lowest number of products Proportion of searches for
400,000 available at any given time £1m+ properties
350,000
Brokers’ Time Christmas Presence
300,000
250,000
Purchasers
(inc. landlords)
First Time Broker
200,000
Buyers 4.2 Remortgagers
searches
150,000
3.3 3.0 329
100,000
Broker
documents
25
50,000
0
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Search to docs ratio Documents/searches prepared on Christmas Day
2019 2020 2021
Flying Start The Working Day in Searches
In 2020 the CloudTwenty7 platform by In a market that goes way beyond upfront
Twenty7Tec processed over 17 million eligibility, instant decisions, and speed to
searches, revealing a very bumpy and busy completion, the way both lenders and AM PM
ride for the UK mortgage industry! brokers have collaborated is highly Mon Tue Wed Thu Fri Sat Sun 0 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11
impressive, and is the catalyst for the
As those who follow Twenty7Tec’s monthly positive future projection.
data reports will know, the mortgage HALF THE HALF THE
industry achieved both record highs and WORKING WORKING
lows in 2020, and now tracks towards a
WEEK WEEK
positive Q1 in 2021.
The working week based on searches Searches throughout the day
8 9
FFUTURE DEMANDS
UTURE D EMANDS FUTURE DEMANDS
RT HON CHRISTOPHER PINCHER MP
MINISTER OF STATE FOR HOUSING
A PLAN FOR OUR
SHARED FUTURE
A post-pandemic world is in sight and with it an unwavering
commitment from this Government to not only bounce back,
but to build an even brighter future.
For young people, that means ensuring that Having a new generation of ready and
the dream of home ownership is firmly within raring first-time buyers is key for growth
their grasp. in every aspect of the market and the
businesses who rely on it – from developers
We know that, given the choice, most to decorators.
people would prefer to own their home –
giving them a tangible stake in society and The latest figures show the progress being
a feeling of being rooted in their community. made: more than 250,000 much-needed
new homes were completed last year – the
As mortgage lenders and brokers, you know largest number in more than 30 years – and
better than most the importance of these the home ownership rate has increased
aspirations for a buoyant housing industry. following a period of decline.
10 11
FUTURE DEMANDS FFUTURE DEMANDS
UTURE D EMANDS
But we know there is more to do. Supporting ownership is one way in The Royal Institution of Chartered
which we are supporting the country Surveyors will also be bringing
Through our new £11.5 billion to build back better over the coming forward new advice to foster a more
Affordable Homes Programme – the weeks and months. proportionate approach to the use
biggest investment in a decade – we of these forms.
will deliver up to 180,000 new
Another integral aspect of that
affordable homes across the country.
endeavour is ensuring that every We have also announced nearly
single person in this country is safe, £700,000 to train more assessors,
But we are not just stumping up the
and feels secure in their own home. speeding up the valuation process
cash: we are also providing new
for homeowners in cases where an
pathways into ownership.
We are delivering a new Building EWS1 form is required. This training
This includes the new Shared Safety Bill to bring about the biggest will mean up to 2,000 additional
Ownership model helping more changes to building safety for nearly assessors within 6 months.
people across the country realise 40 years – improving regulations and
their dream of owning their home. bringing forward a clearer system For times when assessments are
genuinely needed, we are working
urgently with professional bodies to
increase the number of assessors to
clear the backlog and resolve the
“HAVING A NEW GENERATION OF issue for good.
READY AND RARING FIRST-TIME
BUYERS IS KEY FOR GROWTH” Working together, we can deliver a
fairer deal for homebuyers and support
the market to build back better from
this pandemic. In doing so, we will
ensure that every single person in this
This model will be fairer and more with residents’ safety at its heart. country lives somewhere which is
accessible, reducing the minimum But some people already on the decent, safe and secure – a place they
stake in the property from 25 per property ladder are now struggling are proud to call home.
cent to 10 per cent and relieving new to sell their flat because of EWS1
shared owners from the cost of forms. We want to fix this complicated
repairs for the first 10 years.
and painful problem.
Through our First Homes scheme we
We are working closely with industry
will also take 30 per cent off the cost
on building safety issues affecting
of new homes – typically saving first-
homeowners across the country. Both
time buyers around £70,000.
surveyors and lenders have confirmed
that EWS1 forms are not required for
buildings without cladding. This helps
to clear the way for up to 450,000
flat owners to sell, move or re-
mortgage their homes.
12 13
FUTURE DEMANDS FUTURE DEMANDS
DAVID PLUMTREE
GROUP CEO (ESTATE AGENCY) – CONNELLS
ESTATE AGENCY IN 2021
Taking the lessons from 2020
The UK housing market is more accustomed than most at
responding and adapting to rapidly changing market conditions.
Whilst we have never seen a year like 2020, Yes, there is no doubt that we will continue
the experience gained in recent years to see a wider range of technology
certainly helped the best estate agents supporting service delivery, and our use of
navigate their businesses and safeguard their robotic processing is already helping to
clients’ and customers’ interests through the improve administrative processing.
uncharted COVID-19 waters of 2020. However, this will continue to be an
evolutionary process, that is focussed on
In a year that has seen technology solutions supporting the services our people deliver
enable remote working and online customer to our customers through our branch
interactions, it would be easy to assume network in person, over the phone and
that 2021 will be driven by technology, and online, rather than replacing them.
potentially the moment ‘prop-tech’ finally
takes hold and delivers on its aspirations to During the year, much was made of the role
revolutionise estate agency forever. that virtual viewings would play in enabling
prospective purchasers to find their next
However, as we enter 2021, it really is a property, whilst allowing agents to be more
case that – whilst everything has changed, productive and handle more viewings.
nothing has.
14 15
FUTURE DEMANDS FFUTURE DEMANDS
UTURE D EMANDS
While that sounds great, in practice Localised restrictions look set to why we place great importance on
nobody is going to commit to buy a remain a feature for the foreseeable listening to their views, and providing
property based purely on their virtual future and, as a result, the current them with the tools and support that
viewing, as evidenced by the desire blend of remote, online, in-person, allows them to deliver the Connells
from both vendors and purchasers and socially-distanced interactions Group service to all our customers
for pandemic safe in-person viewings. between agent and client will remain. and clients.
Even if this has needed some
flexibility by both parties at times. This multi-channel future bring Ultimately, we are all part of one
challenges we must face directly. For industry, and the learnings that will
Indeed, there was some speculation at example, open communication come from the challenges we’re
the beginning of the first lockdown that between all parties remains key, and currently seeing in terms of
consumers would gravitate to online- providing customers with timely managing record sales pipelines will
only agents, based on the notion that updates and full visibility of their increase the appetite for greater
there would be less ‘human interaction/ transactions at a time and through a integration within the supply chain.
contact’, and instead their sale/purchase medium of their choice will deliver We expect to see links between
could largely be facilitated online. benefit. This is of particular importance agents, conveyancers, lenders and
“WE EXPECT TO SEE LINKS BETWEEN
AGENTS, CONVEYANCERS, LENDERS AND
PLATFORMS SUCH AS MIO GAIN TRACTION”
The reality is that consumers have once sales have been agreed and platforms such as MIO gain traction
not responded in this way and transactions are progressing. to support a more seamless
continue to favour the added benefit experience for the customer and
and support that a full-service local There will be an increased appetite help deliver reduced transaction
high street estate agent – aided by for innovation but, as a company that timelines that benefit all.
smart tech – can provide. has helped drive a number of
advancements within the industry,
It is fair to say, though that 2021 is we know more than most that in a
set to be a transitional year, as people-led industry the best
progress continues to be made innovations will come from the people
against the virus and we all seek a that really understand our customers.
return to ‘normal’ life. Whilst technology remains a key
enabler, the greatest impact on the
service that we deliver in 2021 will
come from our frontline staff. That is
16 17
FFUTURE DEMANDS
UTURE D EMANDS FUTURE DEMANDS
SIMON BROWN
CEO – LANDMARK INFORMATION GROUP
TIME FOR SOME
JOINED UP THINKING
The resetting of any new year is a time for looking back and looking
forward, but as I sit down in December 2020 to review perhaps the
most societal-changing year in living memory, it’s even more so.
How do you make sense of the rollercoaster However, I said it was challenging, and
that was the year that was, and what lessons not impossible.
we can find to help us predict what is ahead
of our collective property industry for 2021? The good news for our industry is that – if
we combine a clear understand of what’s
The truth is it’s challenging to do so. happened before, alongside a precise
understanding of the current state of play
The Stamp Duty Land Tax (SDLT) relief cliff – we can forecast forward, and better protect
of 31st March 2021, Brexit, COVID-19 our industry, and the millions of people who
restrictions, and economic uncertainty are rely on each of us to buy their dream home.
four factors significantly impacting 2021,
and any one of these would cause serious At Landmark, we are privileged to operate
concern in a normal market. across multiple parts of the entire house
buying process, which allows us to develop
Meanwhile, delays in reporting completed a wide data-led view of the market. From
property transactions to Land Registry, here, we can analyse trends and predict
alongside the dynamic nature of the current futures, and it’s been a pleasure for us to
market means there is reduced clarity of share this insight with partners and
the property market in general. government since the outset of the pandemic.
18 19FUTURE DEMANDS FFUTURE DEMANDS
UTURE D EMANDS
It’s this three stage process of data Our analysis can explain this partly in 2020. However, potential events
gathering, data analysis, and insight as pent-up demand washing such as further C OV I D - 1 9
that allows for more informed through, but also reflects the impact restrictions, hard Brexit, adverse
decision making. of SDLT relief. economic impact or an end to SDLT
relief all provide discontinuities that
To demonstrate, let’s take a look at However, Completions were still could impact the market.
a real-world example. In this case, well below 2019’s numbers, and
the impact of the pandemic on our only recovered to the previous For example, we conservatively
property industry, and how this can year’s results in October. This has estimate that there are more than
help us predict future trends. had a material financial impact on 200,000 house transactions in the
businesses who receive payment pipeline that will not complete before
Phase One – Gather the Data at the end of a transaction, 31st March. Meanwhile, Money
It is critical to capture the right data. including estate agents, lenders, Supermarket reports that 24% of
As we cover such a wide spectrum and brokers. buyers would abort should their
across the entire property market, transactions not receive SDLT relief.
we are able to track four key stages Our analysis reveals the entire cycle These two data points alone pose
of the property transaction cycle: has a finite transaction completion serious potential consequences for
Listings, Sold subject to contracts, capacity available, and this is the industry should they play out.
Searches ordered, and Completions. currently less than market demand.
From these data points, we’ve Factors include conveyancing Armed with this data Landmark,
focussed on the period from April capacity, search delays from local working with leading industry
2020 to November 2020, in relation authorities, and increased daily partners, has suggested to the
to 2019’s same results. This allows interrupts to conveyancers by government that they extend, or
us to compare year on year. nervous clients. soften the impact of, the SDLT cliff
so that the current uptick in the
property market may continue
Transaction Pipeline
smoothly. This brings further
160%
economic benefit to the economy
140%
120% through increased construction,
100%
increased housing and property
80%
60% services, and continued direct
40%
stimulus to retail sales arising from
20%
0% increased property transactions.
Apr May Jun Jul Aug Sep Oct Nov
Listing Sold subject to contract Searches ordered Completion
What is clear is that 2021 will be very
interesting, and that the new “normal”
is proving to be anything but normal.
Phase Two – Analyse the Data Phase Three – What We Can
From this one chart we can easily Deduce From the Data
identify two terrible months in April In the absence of change the
and May, but from July a recovery expectation is demand would remain
in Listings, SSTCs, and Searches buoyant, and the industry would
to a level considerably above steadily work through the backlog
2019’s volumes. established from the strong demand
20 21FFUTURE DEMANDS
UTURE D EMANDS FUTURE DEMANDS
MARIA HARRIS
NON EXECUTIVE DIRECTOR – UNITED TRUST BANK
VIVE LA
REVOLUTION!
Think about the last time you were running a little late on your
morning commute (who knew you could miss those!) only to find
your regular station closed, bus cancelled, or road diverted.
Did you panic and worry about being late, Which brings me to the point we should all
or did you welcome the opportunity to be aware of – change is coming to our
embrace a new and potentially better future? industry this year. And it’s not modest. It’s
revolution, not evolution, and if any of us
The chances are it was the former, as 71% shy away from the positive challenges this
of us admit to finding any variation in our will present, we will find we are left behind.
lives hard to cope with.
Because, not only is change nothing to fear,
In the scientific community they call this it can actually make a positive impact in
fear of change metathesiophobia, and the our lives.
bad news for sufferers is their nemesis is
inevitable. As the historian of human Take, for example, the five million London
evolution Yuval Noah Harari wrote, “The commuters who – like the opening
single greatest constant of history is that hypothetical I posed you with – had to take
everything changes.” alternative routes to work during the 2014
public transport strikes. While almost
certainly grumbling at the time, some
22 23FUTURE DEMANDS FFUTURE DEMANDS
UTURE D EMANDS
250,000 found their new way so much But it’s not just financial. From a months of waiting, the heartbreak
quicker at getting to the office they human perspective 23% of First Time of another fall-through, and the
stuck with it once normality resumed. Buyers had to take a day off work just accompanying tears.
to sort mortgage admin, and –
It’s this practical open mindedness perhaps most sadly of all – in 2017 The facilitator for all of this will be
that we should collectively be we discovered one in ten First Time data. From Land Registry, to customer
channelling, as our mortgage industry Buyers were reduced to tears, due finance, almost all of the info is
– in all its one hundred year glory – is to the exhausting process we were already there to make the most
creaking at the seams. limping by with. incredible positive differences to our
industry. And it is accumulating this
Over a century, our entire house buying At a time when tech is re-imagining data and moving it all to the front of
and selling process has been built in everything from how we take taxis, the process – in a way that ensures
ramshackle silos. Our component parts how we bank, and how we virtually our customers feel trust in us as an
– from estate agents to conveyancers, meet our friends and family, we had industry – that will help us all to go
lenders to brokers, and everything to be aware that at some point it would onto great things.
in between have focussed on our be our turn. Well that turn is now.
own challenges, with next to no We have a responsibility and an
consideration for the rest of the chain. The government is leading an opportunity to work collaboratively in
industry working group to reimagine 2021 and beyond to shape our industry,
We can all cite personal examples of and redesign our entire buying and but it will take honest appraisals of our
frustrating inefficiencies in our own selling process – and it promises to collective failings, and bold imagination
businesses, but the real loser in all finally give the customer the very to craft our new path.
of this is the customer. best experience.
Change is coming for us all, and now
In 2019 the average time taken to sell Unlike the last one hundred years, this is our time to make this count. After
a property from listing was 19 weeks, time all parties will be involved in the all, as Benjamin Franklin once said,
and government sources estimated creation of a new and better way for “When you are finished changing,
up to 33% of all home buying people to buy and sell their homes. you are finished”.
transactions failed, costing buyers
and sellers “more than £1,000 every Gone will be the days where things
time”, and amounting to “hundreds were allowed to nearly get to the end,
of millions of pounds annually”. only to fall down because all the
parties involved didn’t have access
This trend continues across to the readily available data.
remor tgaging, with research
suggesting painful mortgage Farewell to those infuriating days of
memories put off one million Brits our lives working on a sale for a
from switching mortgage, even when homeowner – only to discover that
it’s in their financial interest. This the prospect buyer was never able to
costs UK homeowners an estimated complete from the very start.
£9.8 billion annually, with around two
million borrowers in the UK on a And, for the most important people
Standard Variable Rate mortgage – the customers – so long and good
when they don’t need to be. riddance to those ponderous
24 25FFUTURE DEMANDS
UTURE D EMANDS FUTURE DEMANDS
YING TAN
FOUNDER & CEO – DYNAMO
AT THE END OF THE STORM,
THERE’S A GOLDEN SKY
What to expect from the BTL Market in 2021
When assessing the 2020 buy-to-let marketplace you’d be forgiven
for not instantly seeing parallels with the dramatic transformation
of a struggling Second Division football club in the 1950s. But, look
a little closer, and you might be surprised by what you find.
For, while not glossing over how tough the The club was founded in 1892, and had
storm was last year, I feel we can be proud sporadic moments in the spotlight, but by
of the way our collective industry stood the fifties was floundering in the second tier
together and walked on with resilience and of English football. Meanwhile, the city’s
togetherness. If we continue to do this, proud working class roots were being eroded
success follows. And that’s the take-out by strikes, unemployment, and civil unrest.
from this footballing history lesson.
However, something changed in 1959 when
Way back in the 1950’s you would have they appointed the (literally) game-
found the national game looked very changing Scottish manager, Bill Shankley,
different from the lucrative and glamorous who recognised the power of the group.
obsession we know today. And back then
you would have found Liverpool Football He didn’t see differences between players,
Club a very different institution from the coaches, and fans. Instead, he had a vision of
global powerhouse of 2021. a collective one-ness, that if harnessed could
make them unstoppable. And so it proved.
26 27FUTURE DEMANDS FUTURE DEMANDS
Over the next thirty years, the club However, as the Kop tells us ‘At the Meanwhile, 2020’s second half With this in mind, once the pandemic clients have shown a desire to All of which is largely positive stuff,
achieved unprecedented success, end of the storm, there’s a golden results in the housing market proved is firmly behind us – which we all hope purchase properties in Q1 this year, and I’m optimistic for the BTL sector
winning forty two major honours, sky, and the sweet silver song of a to be as irrepressible as a Jurgen will be sooner rather than later – we when they anticipate a greater in 2021.
including a remarkable thirteen First lark’, and analysis of the BTL data Klopp teamtalk, and we have seen anticipate the feel-good factor will number and variety of opportunities
Division championships, and four shows us that there is good reason significant increases in purchase likely return to cities, and young will emerge. However, wider than the immediate
European Cups – the pinnacle of to have hope in our hearts for 2021. activity due to pent-up demand, and professionals will be enticed back concerns of our individual sub-
world club football. huge numbers taking advantage of into urban lifestyles. Meanwhile, holiday lets threatened sections of the market, I can see a
In terms of growth and opportunity, the Stamp Duty holiday. to gain momentum in 2020, but short-term future in which we all
That this came directly after such one of the main BTL areas which We have also seen a growth in the constantly changing COVID-19 rules come together to make our entire
tough times didn’t escape the canny immediately springs to mind is houses We’re still waiting to see how number of clients looking to ‘buy and meant that this didn’t really translate property sector as dynamic and
Scot, and it was Shankley who in multiple occupation (HMOs). lockdowns and working habits improve’, and in many ways the market into significant levels of business. productive as possible for all. That, I
introduced the famous anthem You’ll influence consumer behaviour in has gone back to basics, with buyers believe, will be the legacy of the
Never Walk Alone to the club, with Limited company HMOs have certainly the long-term, but the short-term focussed on making money from However, if the vaccine proves to be pandemic on our industry.
its call for strong togetherness in the been in vogue this year as a growing effects extend clearly to the property. To back this up, we’re seeing a success and Brexit goes relatively
face of adversity. number of portfolio landlords are purchase market. many people looking to remortgage smoothly, this will be an area to keep As the late, great Bill Shankley once
tuned into the fact that these within six months of completing their an eye on over the next twelve months. said, “The socialism I believe in is
purchase, in order to start works, and everybody working for the same goal,
in many cases converting a ‘standard’ Finally, our analysis predicts the and everybody having a share in the
property into an HMO. growth in purchase activity may take rewards. That’s how I see football,
a little more of a back seat in 2021, that’s how I see life”. I am certain that
“THE SECTOR, THE DEDICATION, Looking forward to 2021, this rise with the remortgage market heating if we apply his words to our industry
FLEXIBILITY, AND SKILL SHOWN BY OUR PEOPLE in buying to improve is likely to up and lenders jostling for rates and the rewards will be game-changing.
IN 2020 HAS BEEN TRULY INSPIRATIONAL” continue, and a number of our market share.
Snap back to today, and the lyrics of properties represent the most Market data shows us flats and city
that haunting refrain are indelibly profitable type of investment for tax centre locations are likely to have taken
marked on every LFC fan – and if you purposes, and continue to generate a hit in value, as people seek outside
hadn’t guessed, there’s one sat robust rental yields. This is largely due space, and new locations become
writing this right now – but its to strong demand from professional potentially work-from-home viable.
message seems to me perfect for tenants and – despite some concern
where our industry finds itself. over the summer months – amongst However, research reveals that many
the student population. major employers are still uncertain
Across the sector, the dedication, if they want to fully embrace the
flexibility, and skill shown by our This trend has not gone unnoticed office-less ‘revolution’, and so this
people in 2020 has been truly within the lending community and we value-shift may be a short-term
inspirational. After all, ‘When you walk have recently seen some lenders issue. That said, houses appear to
through a storm, hold your head up initiate extensions for HMOs and be a solid bet, with higher purchase
high, and don’t be afraid of the dark’ multi-unit freehold blocks (MUFB) to prices seemingly likely to hold, due
has never been more relevant for us, include more bedrooms and units. to their increased desirability.
and it would have been easy to wonder
if we would ever see the light again.
28 29FFUTURE DEMANDS
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STEPHEN SMITH
NON EXECUTIVE DIRECTOR – TWENTY7TEC
SOMETHING
REMARKABLE HAPPENED...
2020 started with the mortgage market in high spirits and both
lenders and advisers forecasting record levels of business to come.
But then, something remarkable happened. At Twenty7Tec, the Q2 data showed us that
Something that no amount of blue sky risk remortgages were almost the only game in
thinking could really have contemplated. town during lockdown, at one point
The market closed. Across the UK nobody representing 75% of the total mortgage
was buying and selling homes. So what were searches, as purchase activity dropped to
mortgage advisers and lenders to do? 25% of pre pandemic volumes.
And then, to my mind, a second most I like to think that this dramatic change was
remarkable thing happened. Advisers because of an industry remembering one
remembered that servicing their existing of the fundamental rules of marketing, that
clients was not only something they should the customer you already have is much
actually do, but it was very good for more likely to buy from you than the
business too. customer you have to go out and find.
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But, even if it wasn’t, and it was you need data. Data on the market and
simply driven by the economic data on your customers. What
imperative to stay in business, it customer groups can you approach to
is a great lesson, and one which service more of their financial services
many business owners will hope needs? What customer groups will
is remembered long into 2021 deliver best on your investment of time
and beyond. and effort? And when you really know
your customer, where can you go and
There is also a second rule of find more like them?
marketing that good advisers know
that reminds us that not all customers The mortgage market has many good
are created equally, and some are sources of data, from the granular
much more valuable than others. detail about customers from your own
“THE CUSTOMER YOU ALREADY HAVE IS MUCH
MORE LIKELY TO BUY FROM YOU THAN THE
CUSTOMER YOU HAVE TO GO OUT AND FIND”
These two rules underpin what the CRM systems through to the mass
‘Father of Management Consulting’ aggregated data from sourcing
Peter Drucker meant, when he said systems, and the future pathway for
back in the 1980s, “The purpose of our collective industry is clear. We
a business is to create a customer”. just need to embrace it.
What he’s saying is that a sale is a Ultimately, the lesson of 2020 is that
sale, but a customer could be for life, the remarkable, the unthinkable, can
and I’d like to see advisers finishing happen – markets can close. But,
their year proud about the number of even in the face of the most significant
customers they gained rather than challenges good firms and excellent
just the sales they made. advisers can survive and prosper by
doing the basics well – pursuing
And these rules apply to lenders, just customers, rather than just sales.
as much as to adviser firms.
To put both these rules into practice,
32 33FFUTURE DEMANDS
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PAYAL JAIN
CHAIR – WOMEN IN DATA
FUTURISTIC LESSONS
FROM THE STONE AGE
When I started out working in data-analysis for financial
institutions at the turn of the millennium, my colleagues and
I were able to predict many things which came to be.
Like number-obsessed fortune tellers, we It certainly wasn’t when I finished my maths
could then see how banking would evolve degree in the late nineties. Then, I was a
from branch to app, how alternative pariah for choosing a career in data-
currencies like Bitcoin would fill a void, and analytics over the lucrative City option. I
how peer-lending would provide real can still recall the horrified look on my
competition for traditional lenders. favourite professor’s face as he said to
me, ”but, where will the jobs be?”.
However, one thing would have filled me
with surprise. They’re not saying that to graduates in 2021.
For, when I think back to that windowless In fact, universities around the world cannot
office in 1999, and all those long days poring grow their data departments quick enough
over pages of statistics, I would never have to cope with global demand, and in 2016
forecasted that data would become sexy. data science became the highest paid field
to enter. Meanwhile, senior jobs continue
But, that’s the reality today. to bloom, and today over two thirds of
Fortune 1000 companies have a Chief Data
Officer in their C-suite. There were none
when I started out.
34 35FUTURE DEMANDS FUTURE DEMANDS
While this kind of thinking may Furthermore, as each year passed, Your challenges will hopefully be less in any group requires those with less different experiences of hunting, our prehistoric data cousins is because
seem very new, the truth is it’s records were compared to evaluate grave than this, but without clarity power to feel safe, and that trading, and simply surviving, to offer they looked after their notched bones
anything but. past successes and failures, and this at the planning stage, you’ll never confidence comes from seeing those thoughts as to why it happened. so well we found one almost perfectly
knowledge was passed down achieve the kind of gains you seek. with the most influence engage with preserved in 1960, which is on display
The last century has seen any generations. This meant the more the process. The question of ‘why?’ is key for your in a Belgian museum today.
number of examples of significant informed group could now be more So, drill down to the clearest – and most business, as is having as diverse a
figures analysing what’s been in confident in its predictions, and grow succinct – pain points you can, using Many companies invest in data set of people answering that Your data has all the information you
order to consider what might be. Just collectively stronger. the most simple language possible. teams, but leave them hanging out conundrum using their personally need to succeed in future, as well as
apply that to Churchill’s famous to dry in siloed operations, rather gained knowledge. the personal details of your customers
quote that “The farther backward That, right there, is data analysis, 2 than publicly show their importance who trust you to keep it safe, so
you can look, the farther forward you and that is the future we collectively Gather the right data to the wider organisation by For example, if you’re planning a new respect it.
are likely to see.” walk towards. In a world of limitless data points, integrating them into their day-to-day mortgage product for single parents,
picking the right things to track decision making. then you will almost certainly benefit To conclude, as I reflect on the year
But, it’s not just historic. It’s And, while technology evolves, the is key. By capturing the quantity of from having a range of single parents that was 2020, and look at 2021’s
prehistoric. Literally. basic principles of data analysis supplies, alongside which hunting 4 review the data trends and offer their predictions, my advice would be to
remain the same. So much so that location or trading partner the supply Data without insight is rarely valuable personal insight as to why those eschew the short term, and follow
A common fallacy is that the data is results might be. Churchill’s lead to look all the way
the most important factor, and this back to look all the way forward.
is almost never true. Far more 5
valuable are the people who can Look after your data After all, no matter how bad last
make sense of the results. It seems every week there is a major year was, history shows us the
“PALAEOLITHIC TRIBESPEOPLE CARVED NOTCHES ON data breach somewhere in the world, future is almost always both
BONES TO TRACK CRITICAL SUPPLIES, LIKE FOOD AND FURS, Eighteen thousand years ago, the and there’s never been a more predictable and shapeable through
ALONGSIDE HUNTING, FORAGING, AND TRADING RECORDS” data was able to say what had important time to ensure your data our actions. And that is why we
happened. However, they then used is held as safely as possible. should always remain optimistic.
a varied group of people, with The only reason we know about
For, if you travelled back eighteen this earliest recorded example was secured from, they had all the
thousand years to what today we call teaches us five practical and info they needed to make informed
Uganda, you’d find the earliest recorded contemporary lessons you can apply decisions. When you’re reviewing
data analysis system in full flow. today to make your business more your data capture, it’s important to
successful in 2021 and beyond. start wide in your scope, but logically
Back then, palaeolithic tribespeople narrow in as tightly as possible.
carved notches on bones to track 1 Irrelevant data is not only a waste of
critical supplies, like food and furs, Know the problem you’re trying to solve your time, but also a potential red
alongside hunting, foraging, and The tribes knew precisely what concern herring in your analytical thinking.
trading records. This data allowed they were addressing – their supplies
experienced elders to calculate future often ran out, which meant not all the 3
stocks, and plan resupply missions group could eat and stay warm. This Show top down leadership
before provisions got too low, meant mortality rates would be high. With the elders so heavily involved in
ensuring survival. the process, there was visible buy-in
from the top.
The most effective cultural change
36 37FFUTURE DEMANDS
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ALEX MADDOX
CAPITAL MARKETS & DIGITAL DIRECTOR –
KENSINGTON MORTGAGES
RESILIENCE IN THE
FACE OF THE STORM
Why capital markets should feel optimistic about 2021
Capital Markets, like most other aspects of life, came to a grinding halt
in March when the COVID-19 crisis first caused the UK to lockdown.
Securitisation spreads shot through the roof, The government was quick to step in,
and any planned deals were put on hold as launching various support schemes,
investors shied away in light of significant including the Term Funding Scheme with
volatility in wider financial markets. additional benefits for SMEs (TFSME)
which, like the original TFS scheme which
New lending also slowed down considerably followed the 2016 Brexit vote, provided
as the sudden-onset restrictions on property quick and cheap funding to lenders that
access made originating new loans difficult, are part of the Sterling Monetary Framework.
and lenders’ risk appetite decreased in the
face of economic uncertainty, all of which When infection rates started declining and
resulted in an abrupt reduction of available the economy reopened in the summer, the
mortgage products. securitisation market slowly kicked off again.
38 39FUTURE DEMANDS FFUTURE DEMANDS
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However, in its first few months, it tightened considerably, and So far, RMBS performance has also
looked very different than to before. continued to do so until late autumn, weathered the storm relatively well.
Deals were almost all entirely when news of a second wave brought Despite the huge take-up of
retained or pre-placed – evidence jitters back to the market. payment holidays by mortgage
that most issuers did not have full borrowers early on, we have not
faith that investor appetite had Fortunately, positive vaccine news seen a significant decline in
returned to a pre-pandemic level seems to have reversed this, and, at performance, and most customers
where normal marketing of bonds the time of writing, spreads are once have now exited these deferrals and
was possible. again reassuringly moving closer to are back on track.
pre-pandemic levels.
The importance of confidence in this The lack of mortgage products over
part of the market should not be As with all crises, it is important to the summer led to a slow down in
underestimated, as if a mortgage focus not just on the hardships, but normal voluntary repayment rates,
cannot be collateralised and also see the opportunities they although this has been reversed by
securitised, it cannot be marketed create. When Britain voted to leave pent up demand and the reintroduction
in the first place. the EU in 2016, few RMBS-reliant of products in recent months.
“AS WITH ALL CRISES, IT IS IMPORTANT TO
FOCUS NOT JUST ON THE HARDSHIPS, BUT ALSO
SEE THE OPPORTUNITIES THEY CREATE”
Nonetheless, it was a relatively active lenders would have predicted it would It is difficult to predict where the dust
summer, with over £6.5bn of placed lead to better funding conditions for will settle come March 2021, when
bonds across 18 transactions between them, but the TFS-driven decrease government support schemes for
the end of June and mid-October. in RMBS issuances from deposit- customers come to an end, leaving
Only two of those came from banks, takers did just that. a clear gap for many, but if nothing
including one deal from Coventry else the last few months have shown
Building Society’s Economic Master The imbalance in supply and demand that the market is resilient, which
Issuer – the first new distributed UK helped drive funding spreads tighter gives us cause for optimism.
Master Trust in over a decade. for non-bank issuers whose bonds
became increasingly coveted in a
Kensington’s RMS32 deal in July was supply-light market. The new scheme
notable in that it was the first RMBS has once again jettisoned UK banks
deal after the start of the crisis to and building societies’ securitisation
publicly market its full capital funding needs, so we expect issuances
structure, successfully. Over the in 2021 to come predominantly from
course of the summer, spreads the non-bank sector.
40 41FFUTURE DEMANDS
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NIKI COOKE
HEAD OF INTERMEDIARY – TWENTY7TEC
SUBSCRIBING TO CHANGE
Adapting to new business models in 2021
Xerox, it was once famously said, sold ink cartridges rather than
photocopiers. Whatever they made on those machines was more
than surpassed by the value of their cartridge sales.
Well, this week, I was trying to buy a home Music is an obvious one. Movie streaming
printer. I wanted it to be colour, wireless is another. Microsoft and Adobe products
and capable of printing directly from my are now mainly paid for on a monthly basis.
phone. In my Amazon search, I uncovered Then there’s charity giving, which used to
yet another corner of the retail market that be dropping money in a tin, but now it’s
has moved to the subscription model. This chuggers asking for five minutes of your
time? For pages printed. The ink gets time and £3 per month. Oh, and my personal
delivered when you’ve printed a certain favourite: caffeine. Nespresso has moved
amount of pages. Very clever. so many of us to a subscription model by
creating desirability around the capsule
Now, if I asked you to think about the objects approach to your morning coffee.
or services that you used to own physically
or buy as one-offs, you could name at least
five that you now pay for as a subscription.
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Subscription is, possibly, the final stop Lenders and brokers could, in my
on the maturity of a market. In the view, get a lot savvier about how they
mortgage world, of course, we’re pre-market to mortgage customers
already using the subscription model. whose initial period is coming to an
We just don’t call it that. end. That number of people who are
willing to flip could well come from
Over 60% of people opt for the current 47% who remain loyal,
mortgages that are over 25 years in as well as from the 14% on reversion.
length. Yet after the introductory
rate, only 14% remain on reversion. It’s also interesting to see that some
Some pay off their mortgage, of building societies (including, for
course, but two-thirds remortgage example, Skipton) encourage people
internally or externally. Internal to leave a minimum outstanding on
remortgages outperform external their mortgages with the inducement
remortgages 2.5 to 1. Over the of deed storage and voting rights for
course of their introductory rate, anyone who leaves a minimum of
“IN THE MORTGAGE WORLD, OF COURSE,
WE’RE ALREADY USING THE SUBSCRIPTION
MODEL. WE JUST DON’T CALL IT THAT”
homeowners’ brand loyalty increases £150 unpaid. Societies know that it’s why (and how) and at what stage?
and they effectively fall into a to their benefit to have their How well are you tracking your data
subscription model. But even customers remain loyal to the brand: across the customer journey and to
external remortgages are still it costs five times more to attract a what extent can you predict when
subscribers – serially monogamous new mortgage client than retain an they will next want your help?
to one mortgage product at a time. existing one.
I think that despite our being an Here’s something that I subscribe to:
industry that has enshrined the use In addition to all the dashboards and 2021 will be the year where data-led
of the subscription model, there’s graphs that we’ve seen from lenders mortgage marketing becomes the
more that we can do to learn from over recent years, I firmly believe that norm, not the exception. Game on!
those who are much newer to it. we will see some new strategies
emerge in 2021 that take the
Spotify uses consumer subscription customer acquisition/retention model
data to offer new services – your most to the next level. The first step is to
listened to music is a personalised analyse the data that underpins your
playlist now issued to all subscribers acquisition and retention strategy:
at the end of each year. where do you currently lose out and
44 45FFUTURE DEMANDS
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DOMINIC SCOTT
MANAGING DIRECTOR – ALEXANDER HALL
THE ROLE OF LEADERS
IN CHALLENGING TIMES
What is the number one responsibility of a leader?
To make people successful? To offer a great service? These are the
answers I’ve typically heard in training sessions over the years.
But, maybe, in light of our experience of Working from home has been regarded
2020, the right response is to protect the as the panacea, but long term this is
well-being of employees and customers. broadly a middle class/middle manager
privilege for those with adequate space,
Often the application of this is contained desirable company and a job role which
to mundane health and safety briefings or complements it.
ensuring employees take pre-booked taxis
home after a night out, and amidst daily Only one of these elements needs to be to
protocols of office life our primary leadership be compromised for new challenges to
purpose to protect can get a little lost. arise, such as mental health concerns. After
all, there is a reason that solitary
However, the enormity of 2020’s event has confinement is a punishment.
brought an acute level of intensity to this
area, where decisions leaders make could
literally mean life or death for employees
and customers and their families too.
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Beyond keeping people alive, ensuring an occasional alternative to the
employees stay connected, enthused kitchen table, screaming child or
and engaged is the biggest challenge acrimonious flatmate.
for leaders across our industry.
Without a workforce who care Overcoming challenges is the truest
passionately about the brand and the leadership test. Can you keep your
strategic imperatives, any initiative head when all about you are losing
implemented will not generate the theirs and blaming it on you?
buy-in needed to make it viable.
Without leaders who are able to spot We’ve seen first-hand the huge
people who have gone quiet, we are pressures our lender and business
not taking our role for wellbeing as partners face, and we can either
responsibly as we should. choose to complain and be part of
the problem, or exercise patience and
At Alexander Hall we have successfully find innovative ways to offer support.
transitioned to a remote working set This innovation has served to
“OVERCOMING CHALLENGES IS THE TRUEST
LEADERSHIP TEST. CAN YOU KEEP YOUR
HEAD WHEN ALL ABOUT YOU ARE LOSING
THEIRS AND BLAMING IT ON YOU?”
up and maintained our strong accelerate the implementation of new industry – is the fight to stand up
company culture through a robust ideas and strengthen already strong when things get tough. And the fight
communication framework made up business relationships among those against the pandemic isn’t over. If we
of daily virtual meetings. who sincerely believe, ‘we are all in thought last year was tough, this one
it together.’ might be tougher again. But, this is
These meetings include one to ones, our collective fight, and – while last
team calls and company calls. Content The data provided by Twenty7Tec year caught everyone by surprise –
ranges from technical training serves to support this approach by we won’t be taken unawares this year.
delivered by internal leaders and providing clarity on how the mortgage
external industry figures, to topics sector landscape is shifting, helping This is our time as an industry to stand
more centred on employee well-being. us to make the necessary strategic together and lead as one. Because, if
adjustments in response. 2020 felt as though we were fighting
In addition to this, our offices are with our backs to the ropes, in 2021
COVID-19 secure having been There are many ways to lead, but the we as an industry can lead together
audited by an external contractor and one consistent thing every good and win. Only this time we will
provide respite for those who need leader possesses – no matter the command the centre of the ring.
48 49FFUTURE DEMANDS
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JEREMY DUNCOMBE
MANAGING DIRECTOR – ACCORD MORTGAGES
HOME IS WHERE THE HEART IS
(and the office, and the kids’ school, and the gym etc…)
Asking any Leeds United fan to predict the future is rarely
destined to end well.
However, based on how the market has So, what impact has this had on the
responded to events to date, I’m confident mortgage industry? The volume of
our collective efforts will deliver a strong applications we’ve consistently seen since
2021 for all. May clearly demonstrates how many of us
have decided to make lifestyle changes.
To understand where we currently find Whether improving or expanding existing
ourselves, we should consider what we property, moving to a better location, or
mean when we say ‘home’, a word that has simply prioritising our home life over a work
taken on a whole new meaning during commute, the way we view our homes looks
the pandemic. very different to this time last year.
Previously home was where we slept, The ending of the current Help to Buy
relaxed and ate with our families. However, scheme and Stamp Duty holiday on 31 March
since March 2020 it’s been our workplace, 2021 could dampen the market temporarily.
our children’s’ classroom, our exercise However, I suspect it will recover quickly and
space, and much more. remain strong throughout next year – even
if industry lobbying doesn’t result in an
extension or tapering of the relief.
50 51You can also read
