BSA Mortgage Meet-up: Discussing the future of mortgages

Author Alice Sauvage
  • Date October 09, 2018
  • Reading Time 4 minutes

BSA

The event focussed on the future of mortgages and home buying, including:

  • The digital future of land registration
  • Lessons on using AI to innovate the mortgage process
  • Keynote debate: What is the future of mortgage distribution following the Mortgages Market Study?  
  • Bigging up Bank of Mum and Dad: how societies can continue to support first-time buyers
  • How can we improve the homebuying and selling process?  

Shaun Ewings, Product Manager at HM Land Registry kicked off the day presenting the vision of HM Land registry: to become the world’s leading land registry for speed, simplicity and an open approach to data. He walked us through the tools already developed, as well as those in development, that make the mortgage process as paperless and as safe as possible.

Then, Hinckley and Rugby Building Society and Festina Finance shared an AI system “Mortgage Advisor” they are developing for intermediaries.

 

BSA

The main debate on the future of Mortgage distribution featured a panel of Mortgage specialists from Knowledge Bank, Mortgage Kart, Criteria Hub, Hinckel and Rugby Building Society and Intermediary Mortgage Lenders Association (IMLA). Changing customer needs was the core of the debate.

They gave their views following The Financial Conduct Authority (FCA) interim report.
https://www.fca.org.uk/publication/market-studies/ms16-2-2-interim-report.pdf

 

BSA

After lunch, we got a sneak peek at the interim findings of the BSA’s intergenerational Lending report with its two authors Dick Jenkins (Bath Building Society) and Bob Planell (CML). The main learning of the report:

Home ownership is dropping for younger generations
Raising a deposit remains the most important barrier to property purchase
The Government is seen to be helping but not enough

Among their recommendations, was for authorities to lift tax restrictions on older generation gifts as many young people require financial assistance from their families.

 

BSA

The last session was focussed on how can we improve the homebuying and selling process, which including Dock9 demonstrating our Mortgage Blockchain proof of concept project.

Matt Prior, Home Buying and Selling Policy Lead at the Ministry for Housing, Communities and Local Government shared information about their push to improve the home buying process.  In particular, the information available up front for buyers and bringing in reservation agreements.

Beth Rudolf, Director at the Conveyancing Association detailed how the Conveyancing Association could create a positive home moving experience by improving the lending process: DIP - supporting binding offers and set up post valuation queries.

MarkLusted

Mark Lusted, Managing Director at Dock9 closed the day by presenting an overview of blockchain and smart contract technology and discussing how this could radically improve the home buying process in the future.

He identified the key issues in the current home buying process:

  • The process is slow and archaic 
  • There are many parties in the process, each with their own challenges around legacy and costly infrastructure 
  • It is challenging to coordinate meaningful change with so many parties 
  • Steps are repeated again and again in the process by different parties (for example Customer Due Diligence)
  • Paperwork has to be printed, signed and returned in the post (or faxed)
  • Lack of trust with technology: see recently Natwest, Barclays and TSB
  • Industry and regulatory conservatism: for such a large financial transaction it is understandable there is a high threshold of due diligence

From an agency perspective, we can see the mortgage sector is a few years behind others, and ripe for disruption.

To help move on the discussion around how blockchain could aid the mortgage process Dock9 invested in building an experimental Mortgage Blockchain proof of concept (POC) application earlier this year.

We’ve written previously about this project in the Mortgage Finance Gazette.

Mark demoed the POC to the audience then wrapped up the day by highlighted that there would be huge dependencies in implementing this in the real world: all parties need to be in alignment to really leverage the benefits.

Although use of blockchain is currently in its infancy (“the Web in 1995”), but now is the time to start looking at this seriously.