This article first appeared in Today’s Conveyancer.
2022 has been a landmark year, both for the mortgage market and the conveyancing sector that supports it. Lenders, conveyancers and brokers have all had to come to terms with almost unprecedented volatility and instability. But this has created a greater drive towards improving our market and the way we serve consumers.
Crystalising the need for digital innovation
We’ve seen the need for a smoother, more efficient conveyancing system to benefit both consumers and industry crystalised by external events. Chaos in the mortgage market in the second half of the year, combined with a deteriorating economic backdrop and the rocketing cost of living, has hammered home the need for consumers to be able to secure new products quickly, seamlessly and transparently.
Indications are that we are not going to see this abate in 2023. Interest rates are predicted to continue to rise, taking mortgage repayments with them. As consumers face increasing financial pressure, we will see more looking to shop around to remortgage. Equally, those who took out a two-year mortgage product in the 2021 stamp duty rush will be adding to the demand. This is going to put a strain on capacity in the market as it currently stands.
It will be through increased collaboration across the industry, and by embracing technological innovation, that we can avoid a repeat of the tumult seen in the aftermath of Covid-19 and improve consumer outcomes.
Building momentum with support of industry
Set against a backdrop which heightened the need for innovation and collaboration, PEXA saw a momentous 2022, as we launched in the UK. Prior to our UK expansion, Australia was the only country in the world to have a fully digitised e-conveyancing platform, and our mission was simple – to bring these benefits to the UK to help reform a 150-year-old process, starting with remortgaging.
To do so, working with the Bank of England, we have invested significantly to build only the UK’s seventh active net settlement payment system to settle through the Bank of England. The system, PEXA Pay, is designed to simplify the process for all involved in the remortgaging process, cutting down on time and costs for the parties involved – as well as reducing stress and worry for consumers.
Having tested the platform with the Bank of England and a wide range of lenders, using our technology, Hinckley & Rugby Building Society and Muve completed the UK‘s first digitally-enabled remortgage transaction in September. This transaction was simply the first step. We have now onboarded our in December. The addition of Shawbrook coincided with enhancements to our platform, including the delivery of a standardised mortgage deed to continue to pave the way for a frictionless remortgage experience.
We will continue to announce and then onboard new lenders and conveyancers into the new year as we seek to broaden access to our platform, and quickly increase the number of firms and consumers able to benefit from it. In order to expedite this process, we were delighted to announce in September that we had acquired specialist property law firm Optima Legal. By integrating the platform – which remains open to all – we will be able to demonstrate the benefits of digitisation, from improved accuracy and efficiency to reduced costs.
The year ahead and beyond
2022 was a year of challenge for the whole industry. With the cost of living crisis going nowhere soon, 2023 is shaping up to be more of the same. But it also has the potential to be a year of progress towards a better and more resilient conveyancing and mortgage market. We are going to see a greater focus on Consumer Duty, and moves to support better consumer outcomes; one lender has already dropped telegraphic transfer fees and we hope more will take bold steps to follow suit.
Central to this needs to be embracing technological innovation. Firstly in remortgaging, where we want to make same-day remortgaging a real possibility, rather than a pipedream, then in sale and purchase to transform the experience for all buyers and sellers. Next year, we look forward to sharing our plans on how we can help the industry cut through some of the labyrinthine processes involved that slow completion and cause unnecessary administration and stress.
As we do so, collaboration will be at the heart of our approach. That’s why we’ve joined the Building Societies Association, the Conveyancing Association, and the Payments Association this year, alongside our membership of UK Finance, techUK and the Bold Legal Group. We are committed to driving positive change, but we can only do so with the support of our industry partners.