www.mortgagestrategy.co.uk
Proc fee cuts show lenders seek quality
RICHARD ADAMS MANAGING DIRECTOR STONEBRIDGE GROUP
to directly authorised firms, seemingly suggesting providers prefer to deal with networks and their appointed representatives. DA brokers who commented on
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the developments on Mortgage Strategy Online were hoping the news was an April Fool’s joke, but alas the changes are real. Lenders are after quality and cutting their cloth accordingly when it comes to distributors who can and can’t deliver on this. But what these reduced proc
fees have done is make joining a network more attractive. There are costs for being a member but the enhanced provider commissions that networks can garner often
ationwide and certain Lloyds Banking Group brands are the latest lenders to cut proc fees
cancel out any fees charged. This effectively means ARs can
take advantage of the benefits networks offer such as exclusive deals, compliance support, marketing and increased bargaining power at no additional cost to individual firms. Some brokers may want to cling on to their DA status but for many, financially speaking, this could be a no-brainer.
One might question whether this signals a move away from intermediary distribution. Some believe the days of brokers could be numbered but we think otherwise. The role of brokers in helping
the market get to where it is today cannot be underestimated and most lenders acknowledge the benefits of dealing with them. Long may this continue.
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ANALYSIS
A new generation of surveyors is needed
JOHN HERON MANAGING DIRECTOR PARAGON MORTGAGES
n essential part of the underwriting process which perhaps does not get the credit it deserves
is the role of surveyors. The average age of a surveyor is
over 50. This is worrying as it will have a significant impact on the future of the industry. While there is a drive to get new blood into the industry, the number of surveyors is dwindling. The perception of surveyors’
role has been less than favourable over the past few years, particularly after the credit crunch. It is a misconception that their job is simply to arrive at a correct valuation – it is more complex. For both borrowers and lenders’ underwriting teams, the advice of surveyors is essential in the buy-to-let application process.
Information provided confirms
whether or not a property purchase or remortgage proposition can generate a sustainable rental income that will underpin the loan. Ensuring compliance with all
relevant legislation is also a key part of the surveyor’s assessment. The work surveyors do adds
value to the lending process, particularly in buy-to-let. Surveyors in this market see
more variety in the properties they visit, from single to multi-unit blocks. A range of valuation methodology is applied to arrive at a correct valuation, and this specialist knowledge is valuable. With growing demand on
surveyors’ services, my concern is that this important resource will become limited if we do not see an influx of new surveyors.
SVR rises open the door for business
KEVIN PATERSON SALES AND MARKETING DIRECTOR ASSURANT INTERMEDIARY
and unaware of recent SVR hikes? And how many would benefit
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from well-timed advice from their mortgage broker? It strikes me that the recent
slew of SVR increases provides the perfect opportunity for brokers to re-engage with their customers. Not only is this good practice in terms of service, but it also makes good business sense. When the term of their fixed
rate deal ends, borrowers have the option to search for more attractive terms. Although SVRs have been cheaper in the past, recent rises may make remortgaging on to another fixed rate a better move for some of customers. Halifax is raising its SVR from
MORTGAGE STRATEGY April 9, 2012
ow many of your clients might be thinking about remortgaging but are confused by the options
3.5% to 3.99% on May 1. Clydesdale and Yorkshire banks are raising theirs from 4.59% to 4.95% also on May 1, and Bank of Ireland’s UK arm, which includes Bristol & West, is raising its SVR from 2.99% to 3.99% in June, with a further increase to 4.49% planned for September. The result for some customers
will be a choice between moving their mortgage or an unwelcome hike in monthly expenditure. The question then is whether they will have adequate protection to meet their increased outgoings? Whatever the answer, as their
broker you have a duty of care to advise them appropriately. Whether the solution is a new deal or considering protection options, your advice is valuable to customers and an income opportunity for you.
On March 27 the Department for Communities and Local Government’s National Planning Policy Framework published its report to mixed reviews. Detractors fear too much
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greenbelt land will be sacrificed in the name of housing stock. But many support the common sense reforms that include planning policy cut down from a 1,200-page document to a bite-sized 50 pages. Local authorities have a vital
role. For the first time, they are being empowered to evaluate the needs of self-builders and provide land opportunities for building on, mainly by drawing on brownfield sites used previously. Self-procurement specialists are
Prepare for influx of
self-build customers RAYMOND CONNOR CHIEF EXECUTIVE BUILDSTORE FINANCIAL SERVICES
he government has made good on its promise to help self-builders and renovators.
already helping local authorities by evidencing demand based on their own data, creating a virtuous circle set to make a contribution to the government’s ambitious plans for sustainable homes of the future. So where does this leave brokers
who are likely to see more self-build clients looking for funding? Self-procurement provides an
opportunity, but while the range of products has grown and improved, it is questionable whether the majority of brokers are equipped to serve this niche properly. By using a specialist, brokers
can get the expert advice needed. The opportunity is also there for cross-selling of protection products and the chance to review mortgage requirements over time, creating long-term relationships that – like the best built houses – have strong foundations and longevity.
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