Julie-Ann Haines speech to the Cymru Annual Lunch

Julie-Ann Haines, Chair of UK Finance’s Wales Mortgages Policy Committee

Good afternoon distinguished guests, Ladies & Gentlemen – I’m delighted to welcome you all to our annual UK Finance Cymru lunch.  As always your support of this event is very much appreciated and it is great to see so many members, associates and guests with us.

Jackie Bennett mentioned the broad role of UK Finance and I am clear that the mortgages Wales Policy Committee plays a vital role in supporting UK Finance in its wider work.

In mortgages, this includes the ongoing and important work arising from the recent publication of the FCA’s final report on its Mortgage Market Study and consultation on changes to affordability rules and advice. 

It is encouraging to see from the MMS report that the regulator has found that the market is working well for the majority of customers, and UK Finance is continuing to work very closely with the FCA on the areas where it has identified improvements are needed. 

Turning to issues in Wales, Brexit has obviously dominated the market landscape and I am sure I speak for all when I say that never has it seemed so hard for business to plan ahead given the uncertainties we’ve faced. Yet the housing market in Wales has shown great resilience and growth in 2018

We have seen a number of interventions including the introduction of Land Transaction Tax in early 2018, which is an attempt to support the more affordable end of the housing market with zero tax up to £180k. It certainly changed buyer behaviour in the first half of 2018 and now seems to have settled down. With the average house price in Wales at £185k according to Principality’s House Price Index for Wales, then this certainly does ease the cost burden on those new to market and house movers.

The removal of the toll roads has also been initially seen as positive and anecdotally starting to impact the flow of business and visitors to Wales, as the commuter belt appears to have increased impacting prices in this area.

The Welsh mortgage market saw a strong performance in 2018 with the number of first-time buyers reaching a 12-year high.

 In 2018, there were 16,800 new first-time buyer mortgages, 1.2 per cent more than in 2017. This is the highest annual number of first-time buyer mortgages in Wales since 2006 when the figure stood at 16,900. The £2 billion of new lending in the year was 4.1 per cent more than in 2017. Undoubtedly this growth has been aided by initiatives such as Help To Buy Cymru, and we look forward to clarity from the Welsh government on the future of this important scheme.

Homeowner remortgaging reached its highest level in the decade since 2008, as fixed-rate loans came to an end and customers locked into attractive rates. In 2018, there were 20,100 new homeowner remortgages in Wales, 12.3 per cent more than in 2017. The £2.4 billion of remortgaging in the year was 16.3 per cent more than in 2017.

AHR and government responses

We welcome the Deputy Minister’s update on the work the Welsh Government is doing to encourage Private Rented Sector landlords to rent to lower-income households. We will work with government on any lender issues that might arise.

UK Finance recognises that ensuring fair access to the market for tenants on benefits is a challenge affecting landlords, letting agents, property websites, mortgage lenders, and tenants alike.  UK Finance is closely engaged its members who lend in the buy-to-let market to understand their positions on the matter.

In a recent lenders survey, UK Finance found that lenders accounting for nearly 90% of the market hold no restriction against tenants on benefits.  So any landlord wishing to let to tenants in receipt of benefits should easily be able to find a mortgage product which will allow this.

Earlier this month the Affordable Housing Review for Wales was published and the report is an important contribution to the debate on how to boost the supply of affordable homes in Wales.

Lenders are committed to playing their part in increasing affordable housing and the industry already provides billions of pounds of private finance for social housing in the UK each year.

UK Finance and its members now stand ready to work with the Welsh government to build on the recommendations of this report and support long-term investment in affordable homes.

Access to competitive funding for housing associations and smaller developers remains an ongoing challenge. If we are going to help the Welsh housing agenda in the next decade, it is important lenders continue to work across sectors because collaborative working is going to be key to providing viable solutions for developers, the Welsh Government, housing associations and for the communities of Wales who badly need to access suitable housing for their needs.

Outlook

Whilst the political uncertainty is clearly not helpful, the housing market in Wales is expected to remain broadly the same. The key issues we need to address are the barriers to housing supply and working collaboratively across sectors will ensure we provide appropriate affordable housing right across Wales.  We have shown that we can do it, by keeping things simple and straightforward, working together in partnership to deliver realistic and workable solutions that take us forward.  We need your ongoing support and partnership if we are to continue delivering a market that works for consumers and lenders and I know that I can count on that support going forward. Whatever happens in 2019 I am confident that the mortgage industry will continue to survive, if not thrive, and UK Finance will continue to represent lender interests both in the UK and here in Wales.

Before I go can I just ask you to complete branded charity envelopes you should find on your table for the prize draw at 3pm. You will need to write clearly your name and table number on the envelopes.

Around seven young people aged between 13 and 24 are diagnosed with cancer every day in the UK. They need expert treatment and support from the moment they hear the word ‘cancer.’ Teenage Cancer Trust are the only charity dedicated to making this happen. So I hope that we can all join forces today and make a real difference to the lives of young people here in Wales who really need our help by making donations to Teenage Cancer Trust Cymru.

To raise additional funds for Teenage Cancer Trust Cymru, one guest per table can take home their table's hatbox (on a first come first serve basis) for a minimum of £7 donation. If interested, please put the additional donation in the separate 'Flower Donation' envelope on each table, write your name and table number on the front envelope and hand this to Jenna/UKFinance staff.

I’ve also been asked to remind you that a cash bar is available today.

It’s my great pleasure to invite Debbie Jones from Teenage Cancer Trust to say a few words.