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The Analysis News & Opinions


Warning given on vulnerable clients


Opinion


Broker searches show mortgage market volatility


Our latest monthly analysis of brokers’ criteria searches has pointed to a number of surprising results across a wide range of market sectors – evidence of continuing volatility in the mortgage market. Once again it was ‘all change’ in the


Creditors and collectors must not be so concerned about questions over vulnerability that they fail to treat their customers as real people, according to a group of senior industry professionals. Speaking at a round-table debate run by


CCRMagazine in association with Cabot Credit Managent, Simon Bayley, commercial director for Moneybarn, said: “There is a question over whether lenders sometimes do not help with regards to our policies around vulnerability. So, if you look at our policy on financial vulnerability, it has so many light- bulbs you are scared to speak to the customer, so you reduce contact and take a kid-gloves approach, which is not helpful to the customer because a lot of them want to pay back and they might be able to pay back something, but you almost do not have that conversation until they are in so much more debt that it is now almost impossible for them to get out. “I feel that sometimes the processes within


some of the lenders’ businesses mean that you are not having the conversations to understand what the real problem is and so to be able to say ‘actually, there may be a solution or there may not be one’. It is almost that, by the time you have come to that understanding, it has gone to the next level because they are now three payments down.” Stuart Sykes, chief operating officer, Oblix Capital agreed: “You cannot be scared of your


January 2020


own shadow in that regards. So you need to look at the facts of each case and separate things out. So, the money is owed and the debtor pays, and I do not know if the customer was able to afford the payment, so I go through all the contact process and eventually speak to him to be told that he has lost his job, so I can then have a sensible conversation with him. “But you will find, in the industry, firms that


are not sure about a case and so they will only do an infrequent call so nobody could accuse them of acting wrongly. They have that strategy as a defence against the Ombudsman, but it is not good for the customer, because they do not know what the customer is: they need to stop generalising and treat them as someone who owes them money.” Katherine Bailey, group credit, risk and


compliance at Valor Hospitality Europe, added: “We need an educational piece of work in schools at the grass roots, teaching people from really early on the value of money and what the point of credit cards are. “There are tools out there, I got a pocket-


money credit card for my daughter and she loves it because she feels that she is an adult with her credit card, but I can switch it on and off whenever I want; I can monitor everything. But it is a question of engaging them and teaching them that yes, getting credit, in many ways, is very easy, but you have to pay it back.”


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equity release market in December. For the third month in a row, none of the previous top five criteria searches featured this time round, and the leading search – ‘non- standard construction’ – had been in the top five only twice previously. Non-standard construction covers, for example, timber- framed buildings, log-cabin dwellings, and also concrete prefabricated houses, of which there are an estimated one-and-a-half million in the UK, mostly dating from the post-war construction boom. In the residential market, ‘Help to Buy


equity loan scheme’ appeared in the top five for the first time since August. From March 2021, the scheme will only be available to first-time buyers and will have tight regional price caps. Prospective buyers may be looking to ‘use it before they lose it’. Another interesting factor in the residential


market is the clear shift towards mortgages for older borrowers. With searches both for ‘maximum age at end of term’ and ‘maximum age at application’ appearing in the top three. The searches for ‘interest only’ and the ‘help to buy equity loan scheme’ mentioned above, clearly show that affordability is an increasing issue for people wanting to get on the housing ladder. In the buy-to-let market, there was a


first-time entry for ‘day one remortgage’. These might represent people raising finance for renovation, for example where they have inherited a property in a dilapidated condition. The second most frequent search in this category – ‘lending to trustees’ – had also never previously featured in the top five.


Nicola Firth Chief executive, Knowledge Bank


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