The Intermediary – May 2025 - Flipbook - Page 35
I N T E RV I E W
on the front foot as both opportunity and
competition accelerate.
“The market is growing really fast,” says
Jones. “If you look across all lenders, including
ones that aren’t members of the trade
association, in quarter one this year it’s about
30% up on quarter one last year, and about
50% up on quarter one two years ago.”
It is a trajectory of consistent growth – one
with several forces behind it.
Jones explains: “The speed at which
customers can access money from this product
has improved, and there’s no doubt that’s
driving completions.
“The pricing has also significantly improved
in the market. There’s been increased
competition. We’ve come into the market and
shaken things up a little bit – that has caused a
degree of price tension.”
But the real shift, according to Jones, has
come deeper in the system: “One thing that’s
really notable is that capital markets have
really recognised second charge mortgages.
“Last year there were five residential
mortgage-backed securitisations (RMBS)
trades in second charges.
“I’m not sure there had ever been more than
two in a year before that.”
With greater investor confidence, thanks to
“exceptional arrears performance and almost
no losses,” has come greater liquidity and
falling funding costs.
Jones adds: “We’ve seen interest rates for
customers come down quite considerably.
“It’s a combination of lower funding costs
and increased competition. That again has also
increased the attractiveness of the product.”
For brokers, this has created a more dynamic
environment, according to Jones.
He says: “They’re able to see a customer who
might be suitable for a second charge can get
a better rate than they’ve ever had before –
and get their money quicker than they’ve ever
seen before.
“What tends to happen is when you’ve got
shorter turnaround times and lower pricing,
then brokers see higher rates of conversion,
so each lead becomes worth more. And that
means brokers then go and seek more leads,
because lead sources that previously might not
have been profitable then become profitable.”
Still, with so much momentum in the sector,
the challenge for lenders is keeping up.
“If you stand still, you go backwards, because
everyone else is innovating around you,”
Jones says.
“If you don’t keep on innovating, then you
might be the best one year, but then you’re no
longer the best the following year – and you’re
obviously outdated two years later.”
Ongoing innovations
Just as Interbridge has prioritised smart
tech in its customer journey, the next wave
of innovation is likely to focus on consumer
protection and fraud.
Jones warns: “We’re in a world now where
customers receive documents electronically,
but most people, given a reasonable level of IT
skills, could edit and tamper with documents
like payslips. They could also procure
fraudulent documents online.”
According to Jones, this is precisely where AI
will start to make its mark, quietly improving
outcomes and security.
He notes: “Identifying changes in font,
spotting that something is a couple of pixels
out of alignment, or detecting from the
metadata that the document wasn’t produced
by the correct PDF creator, this is where the
industry is introducing AI solutions that can do
the technical checks humans are looking for.”
Looking ahead, however, Jones does not
foresee a dramatic reinvention of the second
charge sector, but rather a steady march of
practical enhancements.
He explains: “I don’t think the market is going
to change in a huge way over the next few
years. It’s a well-established market. I’ve been
in it since 2005 myself, and fundamentally the
customers are largely the same kinds of people
as they always have been – and they want the
same things they have always wanted.”
That core driver – customers looking to
consolidate debt or refinance expensive
unsecured borrowing will remain – but the
experience will continue to evolve.
“There will continue to be incremental
improvements which will take away the need
for customers to provide paperwork,” he says.
“That’s what customers really want. Tell
someone to go find their P60 or their last
Council Tax bill – they’ll struggle. At the time
they threw it in the bin or deleted it from their
inbox, it never occurred to them they’d need it
six weeks later.”
For Interbridge, small gains add up, Jones
concludes: “The way we see it is lots of small
improvements which, when they add up, make
a big difference in total.
“The removal of a verification check here, of
a document requirement there, an automated
step there – all of that together will continue to
drive down cycle times and let customers focus
more on what they need from a product, rather
than what they’re able to get.” ●
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