We are in an era when one topic alone – the dreaded ‘B’ word – dominates not just the media and Parliamentary timetable but conversations at dinner or chatting over lunch at work.
Although the fact that MPs were debating low-level letterboxes right before voting whether to accept the Prime Minister’s Brexit deal is a good example that life continues even in the most adverse of circumstances!
No matter how trying the circumstances, it is vital that the government does not allow important topics like the mortgage market and supply of new housing to fall by the wayside, especially given the continued uncertainty in the market.
We are still a long way from the 300,000 new homes we need to be producing every year to get a handle on our housing crisis.
The government’s own preferred measure for housing delivery is net additional properties, for the simple reason that this measure takes into account new builds, conversions and where commercial units have a change of use to residential.
These figures come out annually and the latest ones show a large uptick in the volume of homes produced. From 124,000 units in England in 2012/13 to a more respectable, but still inadequate 222,000 in 2017/18.
A 79% increase in production in five years is obviously a good sign. However, relaxing the rules around changes of use and conversations played a big part.
Can private house builders now expand sufficiently to build the volume of homes required?
The good news is that latest quarterly figures for the house building sector show new build starts to be growing.
In Q3 2018 there were 38,000 new starts over the quarter alone, up from 33,000 the previous quarter. The last time quarterly levels were this high was 2007 when quarterly new starts of just under 40,000 were typical.
The blot on the landscape for new house building is the demographic trends facing the house building sector. The Federation of Master Builders’ House Builders’ survey for 2018 showed skills shortages for bricklayers, carpenters, joiners and site managers.
The FMB survey found 44% of small and medium-sized house-builders in England considered a shortage of skilled workers to be the major barrier to their ability to build more new homes.
All of which makes expanding the percentage of housing delivered by offsite construction a key priority.
The BSA published its study two years ago on the barriers facing Modern Methods of Construction (MMC). The government has made good on its commitment to assist the wider industry finding a solution by setting up a technical working group on MMC.
It is vital that in 2019 the group delivers a solution that the market as a whole can have confidence in to ensure we see the quantity of housing this country desperately needs.
Why open banking has not opened the floodgates (yet)
The anniversary of open banking has been and gone with, much like open banking itself (so far), little consumer interest.
Regulators are similarly ambivalent about open banking, with the Bank of England’s deputy governor recently arguing that the “jury is still out” on whether open banking and PSD2 will ultimately be a gateway to a bigger change.
Our assessment of consumer attitudes suggests that, unsurprisingly, consumers who like using digital services for banking are generally interested in new technology and have a good understanding about financial services in general.
The big question will be how interest in open banking broadens out from the early adopters to the wider public. There is still widespread consumer discomfort in sharing their personal details via an app, though this may gradually be receding.
Likewise, there remains nervousness among many using an app or digital-only service for mortgages. However, any nervousness about sharing their data with a third party firm may start to dissipate once borrowers see the services that are being offered.
For example, consumers will see it as a more attractive prospect if it provides a service that gets the best deal, one that can monitor and manage their money or uses technology to offer a faster service than other providers.
For many of the new fintechs that are looking to offer new services to consumers using open banking, the slow take up is no bad thing.
The BSA hosted three of the new fintechs looking to shake up UK financial services using open banking at our Digital Mutual event last year. The message coming loud and clear from all three firms, was that the gradual roll out and even the low visibility of open banking itself, were all advantages (at the moment!).
The true value of open banking will ultimately be if it can provide a personalised service to consumers and for the industry, a better understanding of customers, so that they can serve them better. If it can do these things, a quiet revolution will be inevitable.
Source: Mortgage Finance Gazette