The three most pressing gaps across the housing and mortgage markets

There have always been a number of gaps across the housing and mortgage markets, many of which remain tough to plug. Arguably, three of the most pressing ones at the moment are the housing supply gap, the affordability gap and the advice gap.

The housing supply gap remains an age-old conundrum to which there are no quick fixes and until the UK manages to build enough housing to meet ever-growing demand there is sadly no end in sight. Although this will be harder to judge following the announcement from Michael Gove that he was withdrawing mandatory house building targets and rendering them ‘advisory’.

Having said that, there are some positive signs in the offing as the latest government statistics revealed that annual net housing supply in England jumped by nearly 9.9 per cent in the year to March 2022.

The Department for Levelling Up, Housing Communities figures showed that net supply rose to 232,820 up from 211,870 in March 2021, with new build homes making up 210,070 of the total, up from 191,820 to represent a 9.5 per cent increase. The South East topped the regions for new build completions with 37,060 followed by London with 31,620. The North East with 8,840 and Yorkshire and the Humber with 16,860 were the regions with the lowest new builds.

The affordability gap continues to rise in prominence as living costs hit new heights and mortgage rates sit at levels not seen for many years. Lenders are also having to balance their pricing, risk and service levels after a period of economic and political turbulence and some borrowers such as the self-employed remain underserved. This final point was highlighted in a recent study from Pepper Money which suggested that more than three quarters of self-employed people are concerned about their prospects of getting a mortgage due to affordability and accessibility issues.

Thankfully, we have experienced much greater market stability in recent weeks which is providing a more robust platform on which lenders can be a little more competitive in their pricing and in their appetites to write more business. Although there remains justifiable concerns for many borrowers including those in the self-employed community.

The advice gap is an interesting one. The potential for technology to help reduce this has been widely recognised throughout the mortgage market for some time and has proved itself critical in reaching those who don’t typically access advice. However, all too many advisers are still not fully aware of their options and/or are using systems and solutions which may not be the best fit for their business.

With many advisers being prevented from helping a wider range of clients due to a perceived lack of time and resources, this is where internal processes can benefit from a CRM system which can seamlessly create more time and deliver greater efficiency. A strong, highly compatible CRM system can help intermediary firms to better manage their customer data, offer stronger sales support, deliver actionable insights, integrate with social media and facilitate team communication. It should also support lender integration, audit trails, AVMs and credit searches to reduce admin burdens.

In short, such a solution can help firms to bridge the advice chasm and with the mortgage market becoming ever more complex and the value of advice rising, this is a hole which can easily be plugged in a cost-effective manner if they know where to look.