News Review: Short Term Finance
Mud-slinging is bad for bridging’s profile
by Paul Brett, business development director, borro
“calm down dear!” became a catchphrase for a certain age- ing film director and latterly our Prime minister in a less flattering House of commons exchange with a female back- bencher. However, it could well be wheeled out again as the increasingly busy world of short-term finance welcomes new lenders at an increasing- ly urgent rate. it has been well documented how the short- term market has become a magnet for lenders which un- derstand the value of this vital market segment as an invest-
ment outlet. the choice for brokers is now much wider and as a result the competi- tion for business has become fierce. unfortunately, that has led to some mud sling- ing about certain advertised rates, which were considered by some to be no more than a honey trap. regardless of the merits or otherwise of the accusations, psychologically, this is one of the less attrac- tive symptoms in the develop- ment cycle of a new lending conduit like ours. Whereas in the recent
past, existing providers were pleased to welcome new play- ers as representing a boost to the visibility of the sector, lat- terly there has been belated recognition that the amount of business available from
the intermediary market will be spread around. competi- tion is healthy, particularly for customers, and while no one wants to see dirty tricks, as companies struggle for com- petitive advantage there are bound to be tensions. However, i would urge all
lenders to try and remain calm. it is never a good idea to wash one’s dirty linen in public but the real detriment will be the way it plays to the introducer market at a time when having established the beginnings of a good reputa- tion as the “come to” sector for fast completing short- term finance, we start to look more pikey than professional. With reports that omni
capital has raised new financing along with news
about the launch of two new lenders in the sector, it is clear that investment appe- tite in the sector is still high. the short-term lending mar- ket is already reaping the benefit with a high visibility showing at the recent mort- gage expo, and the added value that comes from so- phisticated outside investors insisting on updated work- ing practices which also ben- efit brokers and their clients. For 2012, i think we shall see one of the side effects of this influx of new capital, which will be the likely mergers of smaller firms and the buying out of those who will not be able to compete as the mar- ket becomes more competi- tive. consolidation is the next stage.
News Review: Packaging New lenders must differentiate on service
buy-to-let are good bets. more lenders mean
by Ian Balfour, CEO, Solent Mortgage Services
at a time when the bad news from europe just keeps on coming, and while minds could still be changed in the face of a sovereign debt default or worse, i applaud the recent news of two as yet unknown lenders about to commence operations in 2012 and look forward to the launch. i do not know what part of the market they intend to target, but it is likely that the near prime market and/or
more competition, which is always good for consumers and more choice means more opportunities to demonstrate the advantages of intermediary sourced advice over the direct to lender approach. What will be interesting
from the intermediary point of view is the marketing stance that new entrants will take as far as their chosen route to distribution. unless they are starting with a well- known brand, it is highly unlikely that a direct to consumer strategy will be chosen. Personally, i cannot
22 mortgage introducer DECEMBER 2011
see any new lender ignoring the intermediary channel as a primary source of new business. But what will they have to offer? even with the mortgage
market still barely out of first gear, competition for customers is already fierce thanks to a most unexpected price war – not something anyone predicted! moves to raise LtVs have carried on slowly but surely, with mainstream lenders breaking through the 90% mark this year. However, common sense and an overarching compliance requirement on lenders to ensure suitability and affordability, has meant
that every small step towards products which favours first- time buyers or those with less than perfect credit has been incremental rather than radical. Having looked at the way
the major lenders have all struggled with filtering the good cases from the bad this year, which has been at the heart of service issues, it makes a good business case for new lenders to explore the benefits of using specialist broker facing packagers, working in partnership with networks, to aggregate business and make their service that much more efficient.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56