An interview with Andrew Montlake, director at Coreco, a London-based mortgage brokerage and owner of Monty’s Mortgage Blog. We’d also recommend checking out Andrew’s latest commentary for our 2020 forecast blog post…
(1) For those that don’t know much about you, can you give us a little bit of background of your own experience and also what you do at Coreco?
I started in the mortgage industry at John Charcol in 1994 where I worked my way up from an administrator to a senior broker. After 7 years I left to join a new company called Cobalt Capital, where as well as broking I developed the brand, marketing and PR. In the aftermath of the credit crisis, we all got made redundant and a few of us founded Coreco in 2009.
Here I invented the brand and grew this as Head of PR & Marketing as well as being the company Spokesperson. I became the MD in August 2019. I still see clients and do PR as well as the other duties associated with being an MD.
(2) What would you say sets Coreco apart from the other brokerages out there?
Coreco is not just another mortgage brokers, it is an attitude. We have developed our own DNA which we follow and everyone who joins Coreco becomes part of an extended family. Our passion is for educating and advising people, wherever they are on their financial journey. We are down-to-earth, embrace technology, but all have a distinct personality which is important. We don’t hide behind jargon and our clients are the central point of everything we do.
(3) As 2019 starts to draw to a close, what area of the mortgage market would you say is seeing the most activity at the moment? Why do you think that may be?
It’s all about first-time buyers and remortgages at present. Remortgages obviously because rates are at such a low level and lenders are falling over themselves to attract business. FTB’s have started to come back to the market, buoyed by low rates on offer and lenders opening up their criteria once more.
At these rates it is often more affordable to pay a mortgage than rent, however, the deposit is the issue for many. Unless they are looking at the Help to Buy Scheme or have help from the Bank of Mum & Dad or Gran & Grandad it is hard for many to save for a decent deposit.
I suspect the market will open up a bit more at the start of this year after a decisive election result but we shall see.
(4) Would be great to hear your thoughts on the first-time buyer lending market in the coming years and also the potentially speculatory effects of Help to Buy?
FTB’s are the lifeblood of the housing market and this sector will continue to be relatively strong as the basic wish to own your own home is still very much part of the British psyche. My worry is that it becomes more fragmented between the haves, those able to get help with a deposit, and the have nots.
Help to Buy has both helped and hindered, with more able to get onto the housing ladder but house prices being unnecessarily raised because of the demand-side nature of the scheme. Hopefully, there will be something to replace it that helps but does not just inflate prices.
Lenders will continue to attract first-timers and I suspect rates will be very keen for some time yet.
(5) As many of our readers are buy-to-let investors/landlords, it would be good to get your insights into this lending space at the moment? Is the Limited company (SPV) really growing at the pace that some market commentators would have us believe?
This part of the market has changed pretty dramatically, but rumours of its demise are wide of the mark. What we have seen is a reduction in the number of amateur or “dinner party” Buy-to-Let landlords, which has meant the sector is now a much more professional landlord space. It is essential to get tax advice before embarking on growing a BTL Portfolio and many landlords, whilst not changing their existing stock into Ltd company names, are buying new ones in a corporate entity.
With BTL mortgage rates now lower than they have ever been it is a great time to revisit your portfolio and, despite the additional paperwork, work with a professional broker who can help get the most out of or grow an existing portfolio.
BTL is still a very important part of lenders offering in the mortgage market and will continue to be so. I actually see this sector maturing and growing once more over the next few years.
(6) What type of FinTech innovations are interesting you the most at Coreco? How do you envisage their integration into your business in the coming years?
There is loads of change here and at Coreco we love to embrace technology, building our own new customer-centric portal. It’s important to keep an open mind and don’t believe the hype of so much of the press and commentary around this. Every week someone proclaims to have changed the world and saved mortgages, but most of that is cheap talk, smoke and mirrors.
Things will change and mortgage broking will be very different in a few years time, but the central tenant of advice is sacrosanct and must be protected.
We need tech to do the heavy lifting, avoid duplication and do things like electronic ID, income verification and speed up the anachronistic conveyancing process. We use it to improve the customer journey and we all need to be able to communicate with our clients however and whenever they want.
(7) There seem to be more brokerages embracing the concept of robo-advisors – what are your thoughts on the growth of this method of doing mortgage business as well as the broader impacts that AI and machine learning may bring?
The robo-advisors are not brokers. They are not broking a complex deal and negotiation terms with a lender. They are simple order-takers or facilitators and whilst there will be a market for this it will not replace the job a real broker does. AI is improving each day but is still some way off being able to really advise a client utilising all the soft-facts and unspoken nuances gleaned from a face to face meeting.
Don’t get me wrong, this will fundamentally change the average mortgage brokers life, especially if they do not have an efficient client retention strategy and really get to know and keep in contact with there clients. There will be fewer brokers in the future, but those that are will be more efficient, doing more business and have deeper relationships with their clients.
(8) Apologies in advance, but can’t resist asking your thoughts on how Brexit will impact the property/mortgage market? Do you envisage any other potential (Brexit-related or unrelated) challenges around the corner?
Brexit is the unnecessary shooting of oneself in the foot, but at least we now have some clarity of process. The uncertainty before the election was killing the market and the removal of some of this should mean that things will open up a little more.
We are still in unchartered waters, however, so it is difficult to really see what will happen with trade negotiations and how they will start to affect sentiment again if a deal looks unlikely towards the end of the year.
Anything like this affects the property market as it causes uncertainty which is the one thing markets don’t like. With Boris intent on proving how successful a post-Brexit Britain can be, we may see some really interesting pro-business, pro-investment and pro-housing policies come to pass over the next few months which could stimulate things further.
If all does go well and we emerge into a bright new future quicker than expected, then we really could find ourselves in a very exciting time indeed.