But Lloyds is prepared to help its


customers in some ways though, claims Jones. “We have product transfers and we


will look at how those are priced to help our borrowers,” he says. “That helps us as well because ultimately it’s in our interest for our customers to get through the coming years.” LBG is also trying to come up with


ways to help borrowers trapped by their inability to fit current criteria. Equity support is a scheme designed


for people who have a mortgage with Lloyds banking group with a loan to value between 90% and 120%. Under new criteria they wouldn’t be able to transfer without paying down their negative equity and boosting the equity against their loan. And under this scheme borrowers can port their mortgage onto a new property with the negative equity element. “During the 90s recession being able


to do this was hugely important for the individuals who needed to,” Jones says. “Having said that, overall demand for this product wasn’t huge. This time around it won’t be millions a week but it’ll be important for the individuals we can help. “As well as the equity support product


we also have lend a hand and local authority lend a hand products which are intended to catch people either trying to get on the property ladder for the first time or in the case of equity support, second steppers, who need to move for


their job or family reasons. We’re trying to unblock different elements of the housing food chain and innovation like this is part of the solution.” Lloyds’ family lend a hand business


makes up a third of all Lloyds TSB first- time buyer business, which Jones says shows how relevant the product is.


Buy-To-leT One sector of the market that’s seen a lot of positivity about the future is buy-to-let, and indeed BM Solutions is one of the two biggest lenders in the market place. But brokers often question the limitations LBG has put on its buy-to-let lending criteria with borrowers only allowed to borrow against a maximum of three properties across the group. With the changes to the way Stamp


Duty is levied on portfolio purchases announced in March’s Budget, there is some merit to the idea that the government at least would like to see more large institutional investors enter the lettings market. “We are clearly positioning ourselves


at the retail end of the buy-to-let market,” says Jones. “The commercial and institutional sector is lending to corporates – that’s part of the business we do through our corporate and commercial bank. But they work on a much bigger scale admittedly. “Whether we change our criteria


to include borrowers with five or six properties to fill the gap between is something we won’t know until we hear the results of the strategic review. But it’s a risk reward balance ultimately. We like buy-to-let mortgage business and if we could satisfy ourselves about the risk on borrowers with bigger portfolios then we’d like to do it. “It’s an interesting time to have that


debate. Six months ago we were looking at the economy with the sense that house prices would be flat and the economy picking up, it now looks far more likely that the economy will be flat at best and house prices will have fallen by the year end. If that’s the case, buy-to-let is naturally counter-cyclical.”


CrySTal-Ball gazIng The group returned to a modest profit of £2.2bn when it reported its annual results in February. “These results are very much a stepping


stone on the way to a brighter future,” says Jones. “In the meantime there’s a lot of business as usual we have to get on with. We are focusing on getting the reorganisation of our brands and our people right. That’s a big thing for the individuals because it’s personally very significant for those people who are affected. “We’re also busy both in the


intermediary sector and in our branch networks. We need to ensure we keep up that positivity.” While there still seems to be rather a lot


of swirling mist in that crystal ball, brokers are indeed reporting that the signs seem positive.


The leviathan is still a market leader in


this mortgage market but, as Jones points out, it’s trimming its fat and deciding much more clearly where it wants to go. Its final destination will remain a mystery until António Horta-Osório reports on his strategic review but if Santander is anything to go by, the outlook for brokers will be rosy. n


Lloyds (41% owned by the taxpayer)


still needs to pay back the billions it needed in state rescue money in 2008. Eric Daniels, former chief executive


of LBG, announced his retirement in September last year and handed the reins over to Portugese-born António Horta-Osório at the start of March following his departure as chief executive of Santander UK. Following Horta-Osório’s arrival,


senior staff underwent a considerable shuffle and Juan Colombás, head of risk at Santander UK, arrived as chief risk officer. Antonio Lorenzo, Santander’s chief financial officer, joined LBG in March to oversee products and markets as well as being director of the wealth and international division. Alison Brittain followed from Santander and now oversees Bank of Scotland and Lloyds TSB in her role as head of retail. After various brand removals by LBG


and Halifax over the past few years, just over a month ago Cheltenham & Gloucester announced its withdrawal from the broker market. The LBG brands accepting adviser mortgage business are Halifax, BM Solutions, Scottish Widows Bank and Lloyds TSB Scotland. After the Lloyds TSB rescue of HBOS


the European Commission also ruled that the group would have to sell off some of its branch network by the end of 2013. The 600 branches that will go will include the whole of C&G, Lloyds TSB Scotland and Lloyds TSB branches across England and Wales. In April the Independent Commission


on Banking said that the Group should consider selling even more branches to reduce its dominance in the retail market and help promote competition. Lloyds rejected the idea, but was rumoured to be selling Scottish Widows.


mortgage introducer MAY 2011 45


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