eThical lending
Perhaps the biggest shift in outlook for Platform came in August 2009 when its parent, Britannia, merged with the Co- operative Bank.
“In terms of the Britannia merger with the Co-operative, there were many similarities - they’re both mutual, both not purely about size and I think that’s still where we are as an organisation. The CFS (Co-operative Financial Services) vision is to be Britain’s most admired financial services business. From a Platform perspective we have our own corporate vision - to be the most admired intermediary lender. “We’re trying to be a good all-rounder.
We want to provide good service, good products, good sales relationships, good technology. It’s not about being biggest and it’s not about doing all things for all brokers, it’s about being admired.” The Co-operative is big on ethics but ethics isn’t necessarily going to be commercially attractive to brokers, I challenge, maybe it’s important to the man on the street, but will intermediaries opt for ethical over well-priced and easy to deal with? “I think it’s much broader than just ethics,” says Tweedy. “It’s about responsibility, it’s about integrity. The almost prime is a product that shows we recognise that people, with the recession, have maybe fallen behind on their payments and we’re catering for that. Ethics is just one part of responsibility. “Brokers need to be thinking about the lender they’re putting their customers with – for instance if that lender has exorbitant fees, or an SVR they’re going to jack up to God knows what rate. I think intermediaries will value responsible and fair and transparent account management. “The way we treat customers when
they’re in arrears or when they want to do a transfer of equity our fees are reasonable and we treat them fairly and take into account their wants and needs - that’s got to be a good thing for the intermediary.”
Funding As Tweedy points out there are only a handful of intermediary lenders still operating in the current market and the
reason is a lack of funding. As part of the Co-operative, Platform benefits from a steady source of retail funding not subject to wholesale appetite for mortgage assets.
“CFS is a very prudent organisation and the level of customer deposits is roughly equal to the level of lending that it does. It’s essentially a retail funded organisation and that includes Platform. There is wholesale funding and corporate bonds, but there are sufficient customer deposits to fund all the lending we do. “We do use securitisation as well but
the recent CFS securitisation in February didn’t include any of Platform’s loans. If the markets came back and the pricing was attractive then we would take advantage of the securitisation market. But it’s a not a primary source of funding right now. “I don’t think that CFS will ever move to fund primarily in that way. They haven’t in the past, and I think it’s one of the reasons that got it through the financial crisis.” Platform has around three quarters of a billion to lend this year, says Tweedy, who estimates the lender will actually lend around £600m in 2010. Over 80% of that will be prime, he says, and potentially mainstream will account for closer to 90%. “We’ll end up doing about £50 million of buy-to-let, about £50 million of the almost prime and the balance will be mainstream. So we’re very much a prime lender but we have the capability to extend the other sides as well.”
Buy-To-leT
Buy-to-let is another market that has seen a flutter of activity in recent months. In May, Kensington and Aldermore launched new buy-to-let products and Precise Mortgages, an entirely new originator, launched with a range of products for professional landlords. Tweedy says he is keen to maintain lending in the sector but not for it to constitute the majority of lending at Platform. “We like the buy-to-let market in general, but I think it got overheated and we had too many amateur landlords in the game.
“Buy-to-let needs to have professional
focus if it’s to be done well, that’s my personal view. I think the future of the buy-to-let market will be more professional than it has been in the past, which makes it more attractive than it has been in the past.
“I also think in the future lenders will be a little bit more discerning about who they lend to on buy-to-let. But we’re not into that specialist landlord market, and we don’t have any plans to go there either.”
FuTure Tweedy is confident about the mortgage market future, seeing challenges and hurdles as reasons to improve and innovate. So what’s the next step for Platform then, I ask him?
“In the long run CFS manufactures
more financial products than just mortgages,” replies Tweedy. “There are savings products, General Insurance, current accounts and such and I think that at some point in the future banks like CFS will be able to offer a proposition to intermediaries which gives them access to all of those products, and then gives them added benefits. “That’s where I see the opportunity.
Offering products that we offer across CFS to the intermediary and giving both the intermediary and the consumer the benefits for selling and owning more than one of those products.
“The biggest challenge to overcome will be joining the proposition up. It’s not rocket science but we need to have the systems and the processes to support a proposition which is attractive to intermediaries and to the consumer.” Though Tweedy says this is more like years away rather than months, he’s hopeful and up for the challenge. Is it the sportsman in him which is spurring him ever further to compete and fight for success? Perhaps. But this is a man who’s seen Platform through two recessions, and he’s still in the game. He’s learned teamwork, how to coach and how to admit mistakes and learn from them. His team is still in the competition when many others have been knocked out, and the post-recession season has only just started. We’ll just have to wait and see whether this renewed game plan pays off. n
mortGaGe introducer JULY 2010 37
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