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News Review


Remortgage opportunity despite low rates By Sarah Davidson


the remortgage market may be about to recover with various corners of the market calling the bottom last month. Speaking at november’s


mortgage Business expo Jonathan cornell, managing director of Jonathan cornell consulting, said there was an opportunity for brokers to educate their clients about why now was the right time to remortgage. He said: “i think we’ve


reached the bottom point for remortgaging. House prices are up and down more regularly than Wayne rooney’s trousers at the moment, but as house prices fall people’s equity in their homes will be going down. “Brokers can call their clients and alert them to


their changing loan-to- value - for example, they might have been at 70% and they’re now at 75% - and advising them to remortgage now while they can still get a good rate makes sense.” He added that impending


public sector job cuts will encourage some of those who still have their jobs to remortgage now rather than wait. Financial advice search


website, unbiased.co.uk, said the number of remortgage customers is already increasing with the number of consumers looking for remortgage advice rising to 34% in october - an increase of 4% since September. Karen Barrett, chief


executive of unbiased. co.uk, explained: “With uncertainty over the base


rate and when it may rise, it is crucial that first-time buyers or those looking to remortgage also seek advice to be sure they are picking the best mortgage product for them.” national


broker


countrywide said it had seen a pickup in remortgage activity too. grenville turner, chief


executive of countrywide, said: “remortgage activity picked up pace in october, making up 25% of all applications and reaching its highest level since march 2009. “consumer confidence


has played a key role in this development as a growing number of customers shift from the uncertainty of a standard variable rate mortgage to a new raft of


Jonathan Cornell, managing director, Jonathan Cornell Consulting,


competitive remortgages with interest rates lower than the SVr rates being offered by a number of leading high street lenders. “However, our latest indicators suggest that there is still a growing number of customers who are unable to remortgage.”


Compliance costs brokers £20,000 a year, says AMI By Sarah Davidson


tory fees, £9,000 in compli- ance costs and lose an addi- tional £6,000 a year through lost office hours doing com- pliance work. He said: “it means in order


Brokers are forking out an estimated £20,000 a year in compliance costs claimed the association of mortgage intermediaries. Speaking to brokers at


this year’s mortgage Busi- ness expo, ami director, robert Sinclair, director said brokers are paying an average of £5,000 in regula-


to trade you need to make £20,000 profit before you begin to generate income.” ami came up with the estimates after the treasury Select committee asked Sinclair to quantify the current cost of compliance ahead of proposed increases in compliance regulation in the retail distribution re- view. the mortgage market re-


view also looks likely to in- crease costs for intermediary


4 mortgage introducer DECEMBER 2010


firms and as such ami said it had submitted the numbers to the Financial Services authority as part of its re- sponse to the mmr as well as taking the figures to trea- sury Select committee mPs. Sinclair told brokers at


the expo, outraged at the mounting costs of mmr compliance, that mPs “shared brokers’ view”. He said: “i think when the


government and mPs hear about this their response will be fairly stark. i don’t think they’ll be happy about it.”


Sinclair also said that he thought while the FSa did a “fairly good job of writing


regulation” they “did a crap job supervising” the mort- gage market in the past. He said that fraudulent


behaviour and the market’s inability to self-regulate in the boom years had forced the FSa to the extremities of the mmr. “We have to accept the


cost of having not policed ourselves very well and we are all guilty of that,” he said. “We relied on a regulator to do it for us. We are going to have to swallow that pain, i regret, but perhaps not to this degree because that cost is far too great. But that is the stick we are being beat- en with now.”


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