**CHECK AGAINST DELIVERY**

Thank you, Clare, for that very engaging insight to the work of the Financial Services Skills Commission, and the role the lending industry can play in helping address the skills gap.

Like David, I?m delighted to welcome you this year's mortgage lunch and finally have the opportunity of meeting so many of you in person.

Looking back over the last 2 years, the industry has experienced one of the greatest challenges it has ever faced 'supporting homeowners impacted by the effects of the pandemic. As an industry we should be proud of the work we did to provide almost 3 million Payment Deferrals which, at the peak, covered nearly 1 in 5 mortgages in the UK.

The success and the speed of the sector's response to the government and regulatory ask was coordinated through the Mortgage Product and Service Board, chaired by Lloyd Cochrane, and supported by his two deputies - Richard Fearon and Damian Thompson.

Although Lloyd has completed his term as PSB chair I?d like to use the occasion to show our thanks to him, the PSB members and the rest of the Mortgage team at UK Finance for the sterling work they undertook during 2020 and 2021. (PAUSE)

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So, what next for the mortgage market?

It's fair to say that 2021 was a lending year like no other and 2022 has, so far, started very strongly. Last year:

1. Gross lending totalled £309 billion (the highest figure since 2007).

1. And, within this, we provided:
   1. 400,000 loans to FTBs (46 per hour)
   2. 440,000 loans to homemovers (50 per hour)
   3. 1.6 million refinancing transactions (179 per hour)

Whilst the sector has demonstrated its ability to evolve and respond to the needs of customers, regulators, and government, over the next few years, this flexibility will continue to be tested, as we respond to a number of emerging themes. These include:

The Cost of Living Squeeze - Whilst we helped 400,000 first time buyers get on to the property ladder, the affordability tests should ensure that these borrowers have flex in their budgets to manage additional costs pressures.

The increases in national insurance contributions, energy, food and day to day living expenses will create challenges for some borrowers (not just first-time buyers). Although households look to be in a good position currently, we expect increases in arrears throughout this year as cost-of-living pressures begin to bite.  

Whilst, as an industry, we are ready to help and support these homebuyers, we have an opportunity to build on the positive momentum achieved following the pandemic. Our message is clear: customers worried about meeting their loan payments should speak to their lenders early, who stand ready to help.

Sustainability

David touched on the challenge of getting the UK's housing stock to meet the net zero targets set by government. Homeowners will not be able to do this in isolation, and support will be required from mortgage lenders. When the team and I have been talking to government, one of our key messages is that this is not an issue that can be fixed by mortgage lenders alone - it will need a coordinated approach involving governments (whether based in Westminster, Belfast, Edinburgh or Cardiff), the energy sector, the retrofitting industry and trusted agencies. Without this, there will be significant risk of homeowners receiving multiple, possibly conflicting, messages that lead them into the wrong course of action.

Building Safety is probably the biggest issue to the impact the UK's housing stock in recent memory. Every homeowner should be able to live in a home that is safe and where they feel secure.

Over the course of the past two years, we have been working closely with the government, to seek the right solutions for these homeowners. We welcome the recent announcements from the Secretary of State in relation to the remediation plans for properties above 11 meters in height - and we are lobbying to have these extended to cover all blocks of flats, regardless of height. Whilst there are still details to be worked through, we believe this is a step in the right direction.

We will continue to work with governments and lenders to ensure that the solutions being developed are fair, proportionate and that the principle of ?polluter-pays? is followed.

Digital Innovation

One thing the events of the past two-years? have demonstrated is the growing importance of digitalisation? and how technology can help remove friction to improve the customer experience. The home-buying and selling process is one of those areas that is often cumbersome and 'stop-start?. I am encouraged to see early signs of digital innovation in this area, and we will continue to work with the multiple stakeholders involved to improve the process for all.

Market Segments

Much of what I have talked about covers both mainstream and non-mainstream lending. Within UK Finance, we have over 150 mortgage members, representing all parts of the UK's housing market. From my perspective, it's important that each of our members has the right forum to ensure the issues they face, whether cross-cutting or sector specific, can be discussed. Over the years, we have worked hard to ensure that sub-sectors have their own working groups, be those covering Islamic finance, high net worth lending, buy to let or later life. 

At the end of last year, we took the opportunity of refreshing the Mortgage Product and Service Board - I am pleased to say, that it now more fully represents the make-up of our mortgage membership.

Turning now to Consumer Duty.

Over the course of the two consultations, UK Finance has enjoyed regular dialogue with the FCA, on one of the most important regulatory interventions of the last ten years.

Implemented correctly, it will enable the FCA to identify harmful practices more quickly and intervene before they become entrenched. However, such a fundamental rewiring of conduct regulation will be a significant undertaking for firms and not without risks for consumers.  To minimise these risks, we have been strongly advocating for an extension to the proposed 9-month implementation period.

Before, I sit down, I would like to say my personal thanks to my colleagues in the mortgage team who work tirelessly to support our members. Their enthusiasm, energy and commitment has been outstanding. Thank you.

Finally, I would like to remind guests that today's charity partner is Depaul UK.

Please do use the envelopes on your tables to donate generously to the raffle which will be drawn after dessert. Don't forget to put your name and table number on the outside.

In addition, for a minimum donation of £10.00, you can take home the table flower decoration. If you?d one, please use the separate 'Flower Donation' envelope, and write your name and table number on it, and hand it to a member of the Events Team on Table 61.

Thank you

Charles