Henry Woodcock IRESS - IRESS Mortgage Conference 2017

Innovation and efficiency in the

mortgage market conference 2017

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Mortgage Efficiency Survey 2017Background

• 21 lenders

• 2016 gross lending of circa £129bn

• Over 52% market share

• High street names, regional building societies, specialist lenders & new entrants

Atom Bank; Bank of Ireland Mortgages UK; Birmingham Midshires; Cambridge Building Society;

Clydesdale Bank PLC; Coventry Building Society; Family Building Society; Hinckley & Rugby Building

Society; Leeds Building Society; Leek United Building Society; Lloyds Banking Group; Market

Harborough Building Society; Newcastle Building Society; OneSavings Bank; Principality Building

Society; Royal Bank of Scotland Group; Santander; Tesco Bank; Vida Homeloans; West Brom;

Yorkshire Building Society

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Mortgage Efficiency Survey 2017What did we find out?

Market overview

• Buy to Let – sales only dipped by 3%, but next year?

• Re-mortgage market grew – 11% year on year

• Offers made in ten days or less increased by over 12% to nearly a third (30.8%)

• Instant and offers in less than five days remains low (5.3%)

• The intermediary channel is still King - 80% on average in the survey

• 75% of lenders saw an increase in intermediary applications

• And the same number expect volumes to remain level this year

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Direct v’s intermediary business

• Similar average DiP accepts 49.5%, declines 16%, refers 34.5%

• Sales to offer - direct 1.5% higher at 81.5%

• Offers to completion both 85%

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Direct v intermediary business : 2015-2017

IFA Declines

24%

16%

IFA & Direct Refers

34.2%

23%

IFA Accepts Direct

54%

49.1%

65%

49.5%

MMR levelling the market?

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Going social - is 140 characters useful?

• Intermediary engagement – 53% LinkedIn, 63% Twitter

• Consumer engagement – 47% Facebook, 58% Twitter

• YouTube and Instagram also gaining traction

61%

28%

11%

Importance of social media

Somewhat important Very important Vital

39%

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Going digital - Mobile, Robo-advice, Digital broker, AI, Chatbot, Gen-D

• Mobile a given for lenders, 80% affordability, 66% DiP and over half FMA & case tracking

• 50% offer or about to offer digital self-service mortgages, aimed at re-mortgage market

• Robo-advice & millennials

• 41% use an app to buy a mortgage, 1 in 4 happy or very happy online AI robo-advice1

• 1 in 5 brokers set to launch a robo-advice proposition, cost & time savings2

• Would you trust a robot to ….3

• …give mortgage advice?

• …set you up on a date?

1 EDM research; 2 Panacea adviser research; 3 HSBC Trust in Technology

11%

11%

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Going digital – the Canadian way

• 3 reasons why 95% of Canadians will turn to robo-advice/chatbots for mortgage advice1

• Chatbots provide instant answers

• Automatically source the best deals

• More accurate and faster than any mortgage banker or broker

• The tipping point will be when the quality/objectivity is proven

• Alterna bank already live with a digital end to end mortgage platform2

• Pre-approved in 10 to 15 minutes, no paper, no conversations

• Will robo-advisers some day surpass humans for delivering one-on-one mortgage advice?

1 The Globe and Mail; 2 BNN Business News Network