THE MORTGAGE AND ECONOMY SURVEYRESULTS SUMMARY

Intermediary thoughts on the future of the industry post Brexit.For professional intermediary use only.

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Mortgage and Economy Views Survey

The Big Question;

To understand;

• How do intermediaries feel about the future of their industry?• Where does Brexit feature among concerns?• What type of products/buyer are most likely to be affected and in what way? • What type of support do intermediaries require from Virgin Money?

Our approach;

• A bespoke research survey was created (appendix 1) and deployed via the Intermediary Exchange

Output;

• A report and infographic to be shared with intermediaries via our Exchange community

How do Intermediaries think Virgin Money should adapt their proposition in the wake of Brexit?

Overview

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Mortgage and Economy Views Survey

The Big Question;

• Brokers believe the mortgage market is stable and although the uncertainty of Brexit is a concern, it does not drive their outlook on the future of the industry

• They are more concerned about the more tangible impact of legislation changes (BTL and base rate changes)• When questioned, the main impact of Brexit so far is the prevalent uncertainty, which has an impact on consumer

confidence• They feel it has caused people to hold off selling meaning fewer properties on the market. This could also mean

that whilst other products may go down, remortgaging may increase• Virgin Money need to support them through the uncertainty with products, market intelligence clearly

disseminated, customer service and regular updates to changes on policy

How do Intermediaries think Virgin Money should adapt their proposition in the wake of Brexit?

Executive Summary

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Mortgage and Economy Views Survey Despite some uncertainty, brokers feel stable regarding their industry’s future. Reactions to Brexit is not driving optimism or pessimism

How optimistic are you about the future of the mortgage industry?

49% Optimistic 44% Neutral 7% Pessimistic

• Need for good advice remains strong

• Low interest rates• Affordable products

• BTL slow down is balanced with uplift in other areas

• Uncertainty related to unknown impact of recent political events

• Shortage of property

Q1. How optimistic are you currently with the future of the mortgage industry? Base: 57Q2. You mentioned that you are [ANSWER] about the future of the mortgage industry. Please tell us briefly why that is. Base: 57

“People in general are more optimistic which means they are more likely to consider for example moving home/ carrying out home improvements. Mortgage deals /products are at the lowest rates I have ever experienced which means it is usually possible to save client money when their current deal ends or

reduce their Mortgage term.”

“Any political impact is temporary until it becomes the new norm. Buy to Let has slowed with the new Stamp Duty and

tax rules but these could change again at any time. Residential has slowed following the decision on Europe but

people will get back to their lives soon enough. it is not so much Brexit that seems to be the problem more the way it is being dealt with. The sooner people know where they stand

the sooner they will move on. “

“Does not seem to be much confidence with clients at present and lack of houses on the market. Most people seem very

unsure of things.”

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Mortgage and Economy Views Survey Brexit does not feature among concerns that have had a significant impact on the brokers’ businesses

4%

18%

79%

54%

49%

42%

9%

42%

4%

Changes to stamp duty EU referendum result Base rate change

Positive impact (top 2 box)

No Impact

Negative impact

(bottom 2 box)

What impact do you think each of the following events has had so far?

Positive impactNegative impact

Base rate changeHelp to Buy ISANew Prime MinisterBrexitStamp duty change

Q3. Below is a list of events this year. Please let us know how you think each one has impacted your business so far. Base: 57Q4. And for the same events, how much do you think each one will impact your business over time. Base: 57

What impact will the referendum have on your business?

What impact has the referendum had on your business so far?

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Mortgage and Economy Views Survey Thinking specifically about Brexit, prevalent uncertainty means intermediaries are still unsure of the potential tangible impact

49% 42%9%

Positive impact (top 2 box) No Impact Negative impact (bottom 2 box)

“Brexit so far has no major impact other than a little more confidence from buyers who were waiting for the result. Over time, it may reduce the demand

on house building.”

“The terms of GB leaving the EU will take many years to negotiate resulting in more prolonged uncertainty over the

economy in general.”

“This puts uncertainty in the money markets and clients perception on the future of the housing market slowing

with possible price falls.”

54% 37%9%

Q3. Below is a list of events this year. Please let us know how you think each one has impacted your business so far. Base: 57Q4. And for the same events, how much do you think each one will impact your business over time. Base: 57 Q5. For the rest of the survey we will ask you a few questions specifically about Brexit. Please explain briefly what impact you think Brexit will have and why?

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Mortgage and Economy Views Survey Uncertainty could mean brokers are more likely to sell more Remortgage products, with FTB and Moving Home more likely to decrease

46% of brokers agree Brexit has led to fewer

properties on the market

53% of brokers believe people will hold

off selling their properties

51% of brokers disagree that first time buyers have increased

as a result of Brexit

49% of brokers recommend fixing more

since Brexit

64% of brokers have seen a decrease in Buy

to Let products

(33% no change)

33% of brokers have seen a decrease in First

Time Buyer products

(51% no change)

42% have seen a decrease in Moving

Home products

(53% no change)

Brexit impact on housing market Brexit impact on mortgage products

37% have seen an increase in

Remortgage products

(58% no change)

63% of brokers feel that house prices will not change as a result of Brexit, but uncertainty has led to fewer properties and people being more hesitant to sell, which has implications for each product

Q6 We know it’s difficult without a crystal ball, but what impact do you think the Brexit result will have on house prices in the area you work in? Base 57Q7 Now thinking about different types of mortgage products, how much do you think the referendum result has impacted the number of people requiring each of these products so far? Base:57Q8 How much do you agree with the following statements? Base: 57

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Mortgage and Economy Views Survey End customer concerns reflect intermediary suspicions around uncertainty

When the results were first announced I had 2

clients pull out of purchases but nothing

recently

Clients do have concerns as they feel the future is more uncertain following Brexit, a lot of clients wish to secure

longer term fixed rates in view of uncertainty over Brexit and what it may

bring

None specifically, but Brexit hasn't started yet, when it actually comes in (if it comes in), it may be a different story.

Foreign owned banks say make decisions, which British owned bank

naturally feel compelled to follow, tricky times.

Many of my clients are based in The City and feel they may have to move abroad. I had 1 client withdraw from a purchase as they felt property prices

would fall

Q10 Please use the box below to share any concerns you have heard from your clients about Brexit. Base: 57

They are concerned about the uncertainty

of it all

Professional & Commercial are concerned and uncertain. Private and Residential relatively

unconcerned but most read "The Sun" or "The Mail" and are being deliberately mis-informed.

Will I have to move back to my country? Will I be able to get a mortgage after Brexit? What

does Brexit mean?

Just that they are unsure of things and the future. But things will equal out and I think we will be better off in the future - but

this will probably take a couple of years!

There has been no concerns from clients at present re

Brexit around the mortgage market

Lack of concern or optimism for future

Uncertainty leads to insecurity

I look to suppliers like Virgin Money for support on how to sell mortgages in a

post Brexit world

39%Agree

39%Neither agree nor disagree

23%disagree

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Mortgage and Economy Views Survey Support from Virgin Money should continue to focus on competitive products, market intelligence and customer service

What kind of support do you expect from Virgin Money in the wake of Brexit?

Weekly contact (email is good) reminding me of products and unique

selling points.

None new. You are not a political animal and nor should you try to be.

Good value products, well priced with a great support team is what you

need to focus on and not just because of Brexit.

Updates on changes caused through regulation change and

how this will be to transferred or affect the daily running of our

business.

As much marketing support as possible, plus improvements in some of the more onerous parts of

underwriting. Like silly P60s.

Updates in advance, offering good support by keeping our BDMs on the road. Talking to us finding out what the clients and brokers think after all we are the ones out at the

client facing side.

Continue to offer higher LTV schemes. Don't cause the

market to stagnate by the fear that it might stagnate. Brexit fears could become of self-fulfilling if we allow them to.

Q8 I look to suppliers like Virgin Money for support on how to sell mortgages in a post Brexit world. Base: 57Q9 What kind of support do you expect from Virgin Money in the wake of Brexit? Base: 57

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Mortgage and Economy Views SurveyAppendix 1

Question Number Question Ref Survey Questions Rating Scale

Q1 Optimism

How optimistic are you currently with the future of the mortgage industry?

Very Pessimistic- Quite Pessimistic- Neither optimistic nor pessimistic- Quite Optimistic- Very Optimistic

Single choice

Q2 Reasons behind optimism

You mentioned that you are [%((Answer)Q1_optimism.GetSelectedAnswers()[0]).Html.ToLower()%] about the future of the mortgage industry. Please tell us briefly why that is. Open end

Q3 Event impact

Below is a list of events this year. Please let us know how you think each one has impacted your business so far.

- The referendum result to leave the EU- The stamp duty increase in April- Decrease to the UK interest base rate in August- Theresa May becoming Prime Minister in July- The introduction of a Help to Buy: ISA

Single choice slider grid

Q4 Future impact

Now for the same events, how do you think each on will impact your business

- The referendum result to leave the EU- The stamp duty increase in April- Decrease to the UK interest base rate in August- Theresa May becoming Prime Minister in July- The introduction of a Help to Buy: ISA

Single choice slider grid

Q5 Brexit opinion For the rest of the survey we will ask you a few questions specifically about Brexit. Please explain briefly what impact you think Brexit will have and why? Open end

Q6 Impact on house price

We know it’s difficult without a crystal ball, but what impact do you think the Brexit result will have on house prices in the area you work in?

- House Prices will go up- House prices will stay the same- House Prices will go down

Single choice

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Mortgage and Economy Views SurveyAppendix 1

Question Number Question Ref Survey Questions Rating Scale

Q7Impact on different products

Now thinking about different types of mortgage products, how much do you think the referendum result has impacted the number of people requiring each of these products so far?

Mortgages:

- Remortgage- Buy to Let- First Time Buyer- Moving Home

Options:

- I’ve seen much fewer people request this product- I’ve seen a few less people request this product- Number of requests for this product have remained the same- I’ve seen a few more requests for this product- I’ve seen much more requests for this product- This is not a mortgage service I provide

Single choice grid

Q8 Attitudes

How much do you agree with the following statements?

- First time buyers have increased since Brexit due to better value properties- I look to suppliers like Virgin Money for support on how to sell mortgages in a post Brexit world- The number of properties on the market has decreased since Brexit- I recommend that people fix their mortgage rates more since Brexit- In a post Brexit world, mortgage buyers will have fewer options- People will hold off selling their properties- I have fewer international buyers coming to me

Single choice grid

Q9 Support from VM What kind of support do you expect from Virgin Money in the wake of Brexit? Open end

Q10 Client Concern Please use the box below to share any concerns you have heard from your clients about Brexit. Open end

Q11 Other Feedback If you have anything to add about the economy, Brexit and your business, please use the box below. If not, please skip the question to end the survey. Open end