One-third of brokers think MMR has reduced business.By Tony Wornell
Any change to business as usual was always likely to cause some disruption.
The introduction of the new MMR rules has caused some issues at first, but will ease with time as lenders, intermediaries and borrowers accommodate to the new environment. At BDRC, we have set in place a simple tracking study to measure this process.
This study is based on interviews with random samples of 100 UK mortgage intermediaries per month. The first wave was in May 2014, just after the introduction of the new MMR regime and will continue until October 2014 to track the progress of the new MMR regime towards embedded business as usual.
In May 2014, more than a quarter of intermediaries thought the MMR was reducing their business, while less than a third thought it was increasing it. This may be a passing phase, however, driven by the issues lenders are having coping with the MMR. 13% more intermediaries thought lenders were not coping well than thought they were.
This perception was strongly related to the impact of MMR on intermediaries' business. Those who felt lenders were not coping well were more inclined to say the MMR had reduced their business; those who thought lenders were coping well were more inclined to feel the MMR had increased their business.
Consumers looking for a new mortgage were the other group intermediaries felt were struggling to cope with the MMR - although here slightly more thought they were coping well than not coping.
The groups thought to be handling the MMR well were intermediaries themselves and mortgage networks. The FCA was generally thought to be doing well with MMR, although one-in-five intermediaries felt the opposite.
Initially, then, intermediaries have reported that the introduction of MMR has had a major negative impact on business. Most felt lenders were not coping well with MMR and that the subsequent reduction in business volumes was negatively affecting some intermediaries as well. As we move forward with our tracking, we will see how quickly this perception dissipates.