Mortgage Introducer July 2022 by Key Media

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MORTGAGE

INTRODUCER www.mortgageintroducer.com

July 2022

 Elite Women 2022 special report  Loan Introducer  Specialist Finance

MEETING THE CHALLENGE OF LAST-MINUTE PRODUCT WITHDRAWALS Fewer products mean less choice for consumers

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EDITORIAL

COMMENT Managing Editor Paul Lucas paul.lucas@keymedia.com Deputy News Editor Jake Carter jake.carter@keymedia.com News Editor Richard Torne richard.torne@keymedia.com Commercial Director Matt Bond matt.bond@keymedia.com Advertising Sales Executive Jordan Ashford jordan.ashford@keymedia.com Campaign Manager Amie Suttie amie.suttie@keymedia.com Campaign Coordinator Raniella Alonzo Content Editor Kel Pero Production Manager Monica Lalisan Production Coordinator Loiza Razon Designer Khaye Cortez Head of Marketing Robyn Ashman robyn.ashman@keymedia.com

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Diversify for inclusion

here are no guarantees in today’s mortgage market. Read the headlines one day and could be forgiven for feeling the end is nigh for your business – inflation is rising, interest rates are following suit and there is seemingly no bright spark on the horizon amid the cost-ofliving crisis. However, if you follow the news the next day you might be reading the latest house price index highlighting that even amid a challenging landscape, housing remains the optimum investment and continues to defy the odds. So, is there any consistency among the messaging? If there is one theme that has run through both the positive and negative headlines on the Mortgage Introducer website over the last month, it would be the calls for brokers to diversify their business. Depending on who you’re reading about, how that diversification looks can mean different things, of course. To Chris Timms, of Octopus Real Estate, it meant highlighting the

opportunities in bridging; while Sarah Watts, of LV= General Insurance, focused on the opportunities surrounding insurance as clients look for more certainty and peace of mind. For others, it’s been the buy-to-let market or specialist finance sector that is opening windows of opportunity as some doors close. What’s clear is that if the client trusts the broker and sees value in their service, then they are also more likely to return for other reasons, or further products, later down the line – and brokers would be missing a trick if they boxed themselves in with just one product offering. As Mike Davies, head of business development at YBS Commercial Mortgages, put it during a June interview with the publication: “Getting just one more deal could make all the difference to both you and your business.” So, diversify to make sure you’re included when your clients next want to have a conversation. Paul Lucas

JULY 2022 MORTGAGE INTRODUCER

MAGAZINE

WHAT’S INSIDE

Contents 5 14 15 16 21 23 26 28 29

Market review London review Recruitment review Technology review Buy-to-let review Protection review General Insurance review Conveyancing review Equity release review

THE LURE OF TOO-EASY CREDIT

31 Special report: Elite Women Mortgage Introducer showcases a brand-new list of the industry’s female leaders 38 Cover: Mortgage product withdrawals Last-minute changes can cause havoc

40 Interview: Climate X What lenders may not be thinking about 42 Interview: Proportunity First-time buyers need help in the form of real change 43 Interview: Brightstar Group The mortgage sector needs to attract new participants

THE ISSUE OF SUPPLY

LOOKING FAR AHEAD ON EQUITY RELEASE

44 Loan Introducer The latest from the second-charge market 47 Specialist Finance Introducer Updates on FIBA and later-life lending

SOCIAL CARE

MORTGAGE INTRODUCER JULY 2022

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FEATURE IN OUR NEXT SUPPLEMENT Put your brand at the forefront of the UK specialist finance market by supporting one of Mortgage Introducer’s upcoming guides. Here’s what’s coming up in 2022...

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Eye on conveyancing Craig Calder director of mortgages, Barclays

s an industry we’re accustomed to absorbing challenging conditions, adapting accordingly and staying focused on ensuring business continues without disruption. Swings are always evident following a period of unprecedented circumstances. For lenders, this demonstrates how robust we have to be in our ability to service any peaks or lulls as best we possibly can, and this is also the case for a range of service providers across the housing and mortgage market. CONVEYANCING

One of the hardest-hit areas of the mortgage journey during the extreme transactional highs experienced over much of 2020, 2021, and even 2022 was the conveyancing sector, a fact that was recently highlighted in data from Search Acumen. This found that with COVID-19 pandemic restrictions lifted and the industry scrambling to process a backlog of transactions, high registration volumes during Q1 2022 contributed to a total of 1.26m completed transactions that were processed by the Land Registry during the 2021– 22 financial year. This annual total was reported to be up 87 per cent on the previous financial year, when just 675,377 transactions were recorded. It also represented a 34 per cent increase compared with the 2019–20 financial year, before the pandemic first took hold. The analysis also showed that the rush of activity brought more firms back into the conveyancing market. An average of 4,058 firms were reported to be active each www.mortgageintroducer.com

quarter during 2021–22, up from 3,483 during 2020–21. However, growing case volumes still left the average firm handing 60 per cent more transactions than a year earlier, and 32 per cent more than in 2019– 20, to register their busiest financial year since records began. These are some eyewatering statistics that help demonstrate the pressure that was placed on the conveyancing sector during this period. Firms of all sizes have had the challenge of managing recordbreaking activity levels, and the most digitally enabled firms have emerged as the ones that remain best placed to manage client needs effectively and keep workplace pressures in check. HOMEMOVERS AND FTBS

The aforementioned case backlog ensured that activity levels remained relatively high in the conveyancing sector throughout Q1 2022, but this was also tempered by an expected lull in new-purchase business following the closing of the stamp duty holiday and some standard seasonal influences. This was evident in figures released by UK Finance, which showed that the number of people moving house dropped 42 per cent compared to the first quarter of 2021, with the number of first-time buyers (FTB) down by 12 per cent. Although there was a decrease in homemovers and first-time buyers compared to the unprecedented highs of last year, numbers remained slightly above 2019 pre-pandemic levels as COVID’s ongoing effect continues to drive demand for more space. The research also included fresh analysis around the potential impact of the cost-of-living challenge facing households in 2022. It found that the average mortgaged household will see a three per cent reduction in the amount of disposable income left over after mortgage, credit commitments, and living costs are met. However,

the cost-of-living squeeze is suggested to be felt most acutely in lower-income brackets, which have around half the spare income of those in higher brackets, even before costof-living pressures are factored in. The trade body added that whilst it expects mortgage activity to be strong through this year, this will largely be driven by customers coming to the end of their fixed-rate deals and looking to switch to a better rate. This contrasts with previous years, when a significant element of remortgaging activity involved borrowing substantial sums of additional money, in many cases to fund further property purchases. MORTGAGE BORROWING

Moving into Q2, the latest money and credit statistics from the Bank of England showed that net residential mortgage borrowing decreased to £4.1bn in April, down 36 per cent from £6.4bn in March. Mortgage approvals for house purchases also decreased to 66,000 in April from 69,500 in March, with both measures slightly below their 12-month pre-pandemic averages up to February 2020. Approvals for remortgaging with a different lender decreased to 47,800 in April. In contrast, gross lending rose slightly to £26.5bn in April from £26.2bn in March, while gross repayments increased to £21.5bn in April from £20.0bn in March. It’s clear that additional pressures are currently being placed on an array of household finances, and this will affect purchase activity for FTBs and second steppers. However, we are operating in a marketplace that is still low on stock, meaning property prices are likely to remain robust across the UK and a competitive lending environment will continue to generate some attractive mortgage rates for those borrowers who are in a strong enough financial position to take advantage of them. M I JULY 2022 MORTGAGE INTRODUCER

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Beware the siren call of easier borrowing Shaun Almond MD, HL Partnership

he recent proposals announced by the prime minister to help lowerincome families have easier access to mortgages, along with a new version of the right-tobuy scheme, should, in my opinion, be read in tandem with the Bank of England’s recent announcement that it is scrapping stress-tested mortgage affordability tests from 1 August 2022. One of the overriding industry drivers over the last twelve or so years has been never to repeat the ruinous lending which was, in part, responsible for the 2008 credit crunch. Layers of formal regulation have ensured that lenders abide by new rules and procedures governing mortgage lending, and intermediaries accepted a protocol of putting customer welfare at the heart of their businesses. The latest step is just around the corner, with the impending arrival of Consumer Duty, which will put even greater focus on the way the industry treats consumers. While many both inside and outside of the industry can argue that regulation has stifled lending and increased costs, there can be no doubt that lenders and mortgage advisers have, in the main, successfully adapted and innovated in a way that has shown client welfare and sensible lending are not mutually exclusive. Of course, pressure has grown on lenders and regulators to recognise some of the inconsistencies around affordability, such as those clients who have spotless rental payment records and yet are turned down for mortgages even though payments would be cheaper than the rent they have been paying. However, the direction of travel www.mortgageintroducer.com

has been well established, and any return to the excess of Wild West Noughties lending seemed to have been firmly consigned to the history books – which makes the PM’s announcement, when taken with the Bank of England’s musings on relaxing affordability rules, all the more bizarre. One of the measures of affordability still rests round stress-testing against hypothetical interest-rate rises. BBR rises had not happened for years until almost the moment when the BoE started to ponder scrapping or relaxing those conditions in March. Interesting timing. There is an argument that, as most mortgages are now on a fixed-rate basis, payment shock should be minimal. But what happens to the growing numbers of those who, every year, will come to the end of their low fixed rates and find that any alternatives being offered at the time bear little comparison to what they have been used to? Homebuyers have been extremely fortunate that from February 2009 until May 2022, the BoE base rate remained at 1.00 per cent or lower. But can we withstand a long period of high rates like those we experienced in the late eighties and early nineties, when BBR was regularly north of 10 per cent,

reaching a high of 13.88 per cent in September 1989? The plan for a ‘Right to Buy Part 2’ might also not be as comprehensive as the headlines suggested. When speaking to MPs on the Levelling Up, Housing and Communities Committee about the proposed new RTB scheme, Michael Gove was unable to say how it was to be funded, and revealed there would be limits. The review of the mortgage market to help those in receipt of housing benefit to have it classed as income and make accessibility to higher LTV mortgages easier might be watered down in its final form. The dangers of making it easier to borrow at a time of fiscal turbulence should be becoming apparent to anyone thinking farther ahead than any temporary funding jump. However, if it does go ahead, the question that has to be asked is that if the government succeeds in making it technically easier to borrow, how will that sit with lenders’ internal underwriting and credit policies? And more worryingly for advisers, perhaps, if this relaxed lending does come into force, how will it be interpreted under the wider regulatory responsibility placed on them under Consumer Duty? Just because a mortgage can be done doesn’t mean it should be. M I JULY 2022 MORTGAGE INTRODUCER

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Help beat increasing living costs Emily Smith head of intermediary sales & distribution, Harpenden Building Society

he increasing cost of living is changing the lending environment and how home ownership is financed. Current harsh economic conditions are putting a strain on the population’s finances, affecting the mortgage products customers are considering, but also providing new opportunities to borrow. THE RISE OF MULTIGENERATIONAL LIVING

Over recent months at Harpenden we have noticed an increase in the number of mortgage enquiries for multigenerational or intergenerational house purchases – families looking to buy a property together and being able to share the benefits of this arrangement. This may be driven by cost-ofliving factors, longer-term financial planning, or a desire to be closer to parents as they get older and to avoid the cost of outsourced care. Further prompts for this type of multigenerational living include children returning from university and unable to afford rising rental costs; young adults opting to live with parents, as their individual income won’t qualify them for a mortgage; and blended families beginning a new life together. The full list of variations is endless. What is apparent is that families are increasingly pooling their resources to create the best living space possible and to save money. It was a scenario that many families sampled during lockdown – they saw the benefits and are now looking to find and finance a property large enough to accommodate their needs. Others who were separated from

MORTGAGE INTRODUCER JULY 2022

family during the pandemic have also been keen to reunite – and what better way than living together in a multigenerational property? Many consider it to be a winwin situation for all involved, with the potential to save significant money as the cost-of-living crisis gains momentum. Just think – one mortgage payment, one set of utility bills, one council tax payment, one insurance policy, shared meal costs and transport … the list just goes on. Multiple generations living together as one unit, as was common throughout history, has once again become popular. So what should would-be homeowners consider as they look to fund accommodation for wider family? FINANCING A MULTIGENERATIONAL PROPERTY

In scenarios like this, the property being purchased is likely to comprise either an annexe attached to the main house or a separate dwelling. We are happy to consider either instance for mortgage security purposes. Specialist lenders like us, who provide individual underwriting for every mortgage application, are more readily willing to accept this type of property than other, more mainstream lenders, which often shy away from properties where more than one dwelling appears on the same legal title. This type of multigenerational purchase may also require, for example, up to four parties to be named on the mortgage and property title, with all four incomes being used to assess the affordability of borrowing required. When this includes older parents, the aspect of their ages and lending into retirement is often queried. Again, this does not present a problem for a specialist lender like us, provided that we are satisfied that the term is appropriate for the individuals involved. Many other

“[Multigenerational living means] one mortgage payment, one set of utility bills, one council tax payment, one insurance policy, shared meal costs and transport” lenders are less flexible regarding the maximum age to which they will lend. At Harpenden there is no upper age limit, provided there is ongoing income to support the borrowing. More generally for applicants, we consider salary, dividend and net/ retained profit for limited company self-employed; include up to 100 per cent of other income, including commission and bonus; and accept unearned income such as pension, rental, investment, and maintenance. This deeper dive into customers’ financial circumstances provides them with more flexible options when considering a mortgage for a complex multigenerational property purchase. Harpenden has the expertise and experience in managing complex cases – delivering specialist solutions for brokers – to which other lenders and algorithms may not be able to adapt. Every policy is underwritten manually by an expert, which enables us to create highly flexible solutions regarding complex mortgages. As the threat of increased living costs continues to make the headlines, multigenerational living makes good financial sense, and I believe we will continue to see increasing demand in this category, giving new opportunities to customers, brokers, and lenders alike. Specialist lenders, expert and experienced in providing mortgage options for multigenerational households, will be pleased to support brokers and their customers exploring this increasingly popular way of living. M I www.mortgageintroducer.com

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Long live First Homes Stuart Miller chief customer officer, Newcastle Building Society

t was clear from subsequent media coverage that the news that the Help to Buy Equity Loan Scheme would close to new applications two months early was not communicated entirely to plan. Homes England alerted developers to the close on a call in early May, with strict instructions not to make the government’s decision public until further details could be confirmed in September. However, it appears that two participants in the call opted to leak details to the Financial Times. The government has since confirmed that the scheme will close to new applications at 6 pm on 31 October this year. At first glance, it might seem that the decision to end the scheme early is unwelcome news for those needing a helping hand to get on the property ladder. I, however, would argue that it is not. Help to Buy is now almost a decade old, and has seen the government lend around £22 billion to homebuyers in the form of 20 per cent equity loans (40 per cent in London), with the buyer putting in a minimum five per cent deposit and a regular mortgage making up the rest. It has taken serious flak during that time, with developers accused of cashing in on buyers’ boosted affordability and house prices artificially pumped up. Ironically, the scheme purporting to aid the accessibility of homeownership has in fact made it harder for those with lower incomes and less capacity to save to make that leap from renting to owning. Enter First Homes. The scheme finally launched last summer. It’s designed to help first-time buyers and key workers in England purchase a newbuild property by discounting asking www.mortgageintroducer.com

prices by a minimum of 30 per cent against the market value. Where house prices are especially high compared to wages, local authorities can require a larger minimum discount of 40 or 50 per cent to ensure the homes are affordable to local people. The discount applies in perpetuity, meaning it will be passed on to the next buyer each time the home is sold by virtue of a restriction registered on the property’s title at HM Land Registry. The first sale must be at a price no higher than £250,000 – or £420,000 in London – after the discount is applied. It works. We know this because we are already completing our first loans since joining the scheme in the middle of last year. Two of our borrowers, a couple in their twenties, found the home of their dreams in March 2021. Having met at university, they built up their savings by living together and moving between both of their parental homes. They finally moved into their own home in December 2021, and were one of Britain’s first couples to take advantage of the First Homes scheme from Newcastle Building Society. Their home, a three-bedroom newbuild townhouse, is part of a Keepmoat development in Newton Aycliffe, one of the first developments to join the First Homes scheme. The couple reserved the property in June 2021 and their mortgage broker, Mark Pender of Mortgage Advice Bureau, turned to Newcastle Building Society.

A pragmatic approach to underwriting meant that we were able to see beyond the probationary service of one of the borrowers who, having previously been a chef, had retrained and was working as an accountant. As brokers regularly tell us, this can often be a barrier for lenders, who would normally want to see previous accountancy experience. The net result of everyone working through this learning curve and going the extra mile, though, was that our borrowers managed to secure the home of their dreams. Indeed, when we asked them to sum up the experience, they both said the stress of buying their first home had been well worth it for the right property. What this tale tells us is that First Homes may possibly be a better deal for certain types of first-time buyers. What is also clear, however, is that it is not a scale proposition now. The success we are seeing with the scheme needs a complex value chain of parties to be fully on-board and understand the scheme, its nuances, and the dependencies involved in getting it across the line. In our example, the local council, Homes England, the developer, our broker partner, and ourselves all had a significant part to play in making this happen and ultimately changing young people’s lives. If we can make this work at scale, my suspicion is that Help to Buy will quickly become a distant memory of the mortgage market. M I

JULY 2022 MORTGAGE INTRODUCER

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Seatbelts on during economic turbulence Steve Goodall MD, e.surv

s this year opened, the question on everyone’s lips involved inflation and the cost of living – would higherthan-expected price rises lead to an allout crisis? The consensus then was that whatever happened would probably not be long-term – a bit painful for a bit, but not the end of the world, all other things being equal. We’re heading into the second half of 2022 facing a very different picture from that painted six months ago. The Bank of England is trying to control the rate of inflation and the wage rises it’s triggering. But even as they raise the base rate bit by painful bit, most of the price inflation we’re suffering is international, and totally outside the reach of Britain’s central bank. A paper published recently by the Office for National Statistics (ONS) could offer some respite for those whose role it is to consider economic risk from an academic and commercial perspective – if not for those actually struggling to pay bills. The ONS paper notes that during the pandemic, household savings rates surged. The household saving ratio – the proportion of household resources that is not consumed – was six per cent in 2019’s final quarter. In 2020 Q2, it peaked at a record 23.9 per cent, and remained elevated during the pandemic period before falling close to the pre-coronavirus ratio at 6.8 per cent in Q 4 2021. Higher-income households typically have a lower propensity to spend from savings than lower-income households. Analysis of the NMG Household Survey by researchers from

MORTGAGE INTRODUCER JULY 2022

the Bank of England found that 42 per cent of high-income households reported an increase in savings compared with only 22 per cent of low-income households. “Finally,” ONS economists note, “the accumulation of savings may also be used to reduce debts or purchase financial assets rather than fund an increase in household consumption. Data on consumer credit flows published by the Bank of England have recorded net credit paydowns. This is also consistent with the sharp rise in overdraft and consumer credit interest rates.” Where does this leave us when assessing what happens next in the British economy – and, more specifically, how that affects mortgage lending appetite, credit risk appetite, and the performance of existing assets? Capital Economics recently reviewed its house-price inflation forecast up, predicting nine per cent inflation yearon-year in Q4 of 2022. The research house has been pretty punchy in its outlooks before, but in fact, its analysts correctly forecast that house-price growth would be stronger than others anticipated this year. Back in September, they were forecasting a five per cent uplift in house prices in 2022 when the consensus was 1.6 per cent. With the first half of this year already having seen house price inflation consistently in double digits, nine per cent doesn’t seem pie-in-the-sky. Good for asset values in the short term, with affordability supported by the aforementioned wage increases and cash savings. But Capital Economics isn’t so sanguine about next year. With the base rate on a relentless ascent, markets are already pricing in more economic stress, and over the next six months that will feed into higher swap rates. That in turn will mean anyone remortgaging later in the year and into next year will likely

see a very sharp rise in their monthly mortgage payments. Capital Economics expects the average rate on new mortgages to rise from 1.8 per cent in Q1 to 3.3 per cent by the close of the year, climbing to a peak of 3.6 per cent in 2023. This would be the sharpest rise in mortgage rates since 1990 – and we all know what happened to the housing market then. (I know, it’s not the same.) It’s also worth thinking about existing borrowers’ affordability. UK Finance figures show the number of customers in arrears remained low in Q1 this year, the fourth quarter the figure has fallen in a row. The number of homeowner mortgages in arrears is now 10 per cent lower than a year ago, and buy-to-let mortgage arrears are five per cent lower for the same period. Possessions are up a bit, but UK Finance points out this is largely because there has been a backlog coming through from after the government moratorium ended. No-one can tell how bad or mild all of this will be – so much depends on the situation in Ukraine. But unlike the early 1990s, when the base rate was in the mid-teens, lenders are not encouraged or inclined to act harshly on defaults. Following the global financial crisis, forbearance is the order of the day, and with government just having folded on the energy windfall tax to give money to the country’s poorest, I doubt any lender will start evicting those same families. House prices remain robust because of the structural imbalance of supply and demand that existed well before the pandemic. The cost of debt remains very low. Only one dynamic will change all this, and that is unemployment. But we currently still have almost full employment, and that will have to deteriorate significantly to warrant a rethink. As is usually the case, we’ll probably all simply get from one day to the next with some good and some bad along the way. We will manage. M I www.mortgageintroducer.com

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Making moves with the market Emma Walker chief marketing officer, LifeSearch

It’s striking how much a crisis alters consumer habits – and Google the Omnipotent is the perfect forum in which to watch it play out. HELP, SUPPORT, AND DISCOUNTS

s anyone in marketing can testify, online advertising costs have shot up and brands have had to spend more to compete for shrinking pools of customers. Yes, the cost-of-living crisis has a digital division, too. I recently met with our partner team at Google to discuss it. And while those wily supply-anddemand aficionados aren’t about to recalibrate their cost model any time soon, the team presented us with helpful data to show how a cost-ofliving crisis translates into online behaviour, and what advertisers can do to adapt.

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Google data suggests that 48 per cent of the UK population is actively looking for deals and discounts in their searches. That’s much more than usual, and it’s pan-category – from clothing and kitchenware to protection. Interestingly, the decline of consumer confidence correlates exactly with a rise in Google searches for financial guidance, help, and advice. In protection, we’re seeing search terms such as “buy life insurance” drop off and “life insurance advice” pick up. Similarly, a budgetconscious search term such as “life insurance average cost” is up 600 per cent year-on-year, with “compare life insurance quotes” up 2,000 per cent. It’s quite obvious, until you consider that the volume of

protection searches is fairly consistent. There’s been no big drop-off; customers have simply changed the emphasis and angle of their searches. While protection isn’t likely to see massive growth in the coming days, we can respond by giving nascent customers what they need. Options are important. Advice has more value than ever. Preparation is the name of the game. PATIENCE, PREPARATION, PROTECTION

We don’t need Google to tell us that the UK housing market remains strangely bullish. The average UK house price has just hit a new high – as it has done every month this year – of £368,614, according to Rightmove. During a crisis, skyrocketing property prices don’t bode well for the next generation of homeowners. And they know it. According to Health, Wealth & Happiness 2022, under-35s are most likely to have recently delayed a big-ticket purchase (like a house). However, we also know under35s are budgeting with a vengeance, have embraced financial planning, and are more likely than ever before to consider income protection and critical illness cover. Google concurs. Searches for the aforementioned products are on the rise, but again, it’s with qualifiers like ‘advice,’ ‘help,’ ‘comparison,’ and ‘options.’ These ingredients affirm to us in protection that younger folks are biding their time and vying to build some financial foundations. In that endeavour, they’re crying out for direction. And we need to be there. We’re the experts. We need to engage. Yes, the market is in flux, but that doesn’t mean stepping back or sighing in despair. It means being present to understand tomorrow’s customers today; to support their needs now – even if the payoff comes later. M I www.mortgageintroducer.com

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Consider offering advice on specialist property finance Gordon Reid business and development manager, London Institute of Banking & Finance

f you can advise on specialist property finance, as well as on traditional regulated home loans, you’re in a better position to understand your customers’ needs and the options they have available. That means you’re more likely to give them the best possible advice and find them the best products. A big part of that is being better placed to identify when customers need specialist property finance, and – when you see the need – being able to give them a fully comprehensive service without having to refer them to a colleague or another specialist adviser. You may even find that you’re the person colleagues refer customers to, if you can offer specialist advice. At the very least, having those skills is a good way to secure additional business and an extra income stream. WHAT IS SPECIALIST PROPERTY FINANCE?

If you’re not confident about advising on specialist property finance, it could have a negative impact on your business and career and, more importantly, how you serve your customers. The term specialist property finance generally covers commercial lending products, including bridging loans, development finance, commercial mortgages, and specialist buy-to-let mortgages. Many loans in this sector are unregulated, but that doesn’t diminish an adviser’s responsibilities to a customer. Not being able to support your customers when they need one of these products could result in you losing out www.mortgageintroducer.com

on some potentially lucrative business. Worse still, it could mean trying to shoehorn a customer into a mainstream mortgage deal when a specialist finance product would be more suitable. Without understanding how specialist property finance works, you won’t know when to refer customers to a colleague who can get them the best deal. From the customer’s perspective, talking to an adviser who doesn’t fully understand the specialist property finance market may mean paying more interest in the long run, or being tied to a deal that doesn’t really suit. OFFERING SPECIALIST MORTGAGE ADVICE

The broader definition of a specialist mortgage is one that doesn’t meet the normal lending criteria set by traditional mortgage lenders. This can include a variety of application types, from regulated home loans for creditimpaired borrowers and self-certification mortgages, to borrowing against properties of non-standard construction. Specialist mortgages are generally considered more complex than mainstream borrowing. However – particularly with mortgage criteria search tools – it’s become easier for brokers to identify lenders who’ll consider the more complex applications. When it comes to specialist property finance, while it’s easier to identify lenders, you can’t rely on a search tool to identify which products might suit your borrower. You need a solid knowledge of products and providers, as well as an understanding of how to structure the right deal for the right project for your customer’s property. The strength of the housing market means that demand for development finance is strong. This drives the need for bridging loans and specialist buy-tolet mortgages. Although many of the major high-street lenders are reluctant participants in this market, a significant number of specialist lenders have

emerged in recent years. Some advisors have seen the potential for business growth and career progression that it offers. Membership of the specialist finance trade bodies – the Financial Intermediary and Broker Association (FIBA) and the Association of Short Term Lenders (ASTL) – has increased significantly over the last few years, indicating a greater awareness of the opportunities available. BRANCHING OUT

So how do you branch out or upskill to advise in specialist property finance? A good starting point is to engage with the specialist finance trade bodies, who will: • help you develop your business; • identify your key development needs and access relevant support; • give you access to lender and professional services partners. If, like most specialist property finance advisers, you’ve been working in the regulated mortgage sector, you’ll already hold CeMAP or a similar qualification. You could build on that by taking Advanced Mortgage Advice to get a CeMAP diploma, which will help you deal with atypical cases. CeMAP (or the more advanced diploma) isn’t a requirement for advisers who work exclusively in specialist property finance, although providers of credit are all required to be authorised by the Financial Conduct Authority (FCA) and to comply with rules, including the Consumer Credit Act. Whatever you decide – and whichever direction you choose to take your business and your career – we can all agree that one of the most important elements of being a mortgage adviser is to educate your customers. That includes making them aware of all their options. So even if you choose not to advise on specialist property finance, it’s worth learning how it might benefit them. M I JULY 2022 MORTGAGE INTRODUCER

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LONDON

Good month for the nation, great month for the capital Robin Johnson MD, Kinleigh Folkard & Hayward

ay saw a massive step forward for London’s future. Although jubilee celebrations were probably more memorable for most of us, the opening of the new Elizabeth Line – or Crossrail, as it was previously dubbed – has already had a profound effect on the local economies that surround its stations. As John Dickie, chief executive of business group London First, which marshalled the project, wrote just before the line opened, “Although London paid for Crossrail, its benefits are not limited to the capital and the south-east. Some 62 per cent of all the project’s contracts have been awarded to companies based beyond the M25, providing a range of goods and services from steel doors from the north-west to communications and controls from the north-east.” Its impact will nonetheless be most obvious on the millions of people living in and around London whose travel to work and play has just become considerably easier. While the entire line won’t be operational until next year, trains are already running from Paddington to Abbey Wood, with the line set to run as far west as Reading when work is completed. Research by Rightmove illustrates exactly how big an influence the new transport link has had on the housing market in areas surrounding the line’s stations since the project was confirmed a decade ago. Many areas near stations on the line that were previously less connected to key commuter hubs such as Liverpool

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Street or Paddington have seen a surge in prices and interest from buyers and renters. Maryland Station in Newham, which provides an additional option for those commuting near wellconnected Stratford, has seen the biggest jump in asking prices, more than doubling compared to ten years ago (+108 per cent) from £233,480 to £486,235. This compares to the London average increase over the past ten years of 55 per cent. Twyford, at the end of the western section of the line and the next stop along from better-connected Reading, has seen the biggest jump in the number of buyers contacting estate agents, more than tripling compared to ten years ago (+245 per cent). Those now looking to buy near Abbey Wood station, at the end of the South East section of the line, face the stiffest competition from other buyers. Competition, measured by the number of people enquiring about each available property in an area, has soared more than nine times (+869 per cent). While total buyer demand has risen the most in western areas, prices and competition have risen most in eastern areas. It is a similar story for tenants as many look to balance their commute into London with where they can afford to live, as rising rents in London have seen average asking rents reach a new record of £2,195 per calendar month, up 14 per cent in April compared to this time last year. Southall has seen the biggest increase in number of tenants contacting letting agents compared to ten years ago, more than quadrupling (+372 per cent). Asking rents near Southall station are lower than nearby Hanwell or Ealing. Asking rents have increased the most in western stations Slough (+44 per cent) and Burnham (+43 per cent)

while those looking to rent near Custom House station face the most competition from other renters. Custom House, one of the new stations built for the Elizabeth Line and benefitting from significantly lower travel times into central London, has seen competition increase by a staggering 33 times (+3270 per cent) compared to ten years ago. Our own experience in and around London is that while proximity to these new (or sometimes already existing) stations has given values a boost, there has also been a ripple effect outwards. March data from the Office for National Statistics, the latest available, shows lowest annual house price growth in London compared to the rest of the UK – but average prices rising by 4.8 per cent over the year to March 2022 is hardly insignificant. The capital’s average house prices remain the most expensive of any region in the UK, with an average price of £524,000 in March 2022. We all know that affordability is a challenge for younger first-time buyers hoping to get on the property ladder in London and the South East, and the cost-of-living crisis is not making things any easier. But investing in new infrastructure like the Elizabeth Line doesn’t just mean soaring house prices and rents for properties set for improved access to the city. It opens local economies, providing the incentive for businesses to invest to support local community demand. And even though prices are up, in some cases by a staggering amount, over ten years, there are still plenty of opportunities for those with smaller budgets. Government has been trying to make homeownership more accessible in London for decades; what a gift the Elizabeth Line is, then, for it has taken the intense pressure off for would-be buyers previously forced to compete in the city and its most commutable areas. M I www.mortgageintroducer.com

REVIEW

RECRUITMENT

The future of work is here Pete Gwilliam owner, Virtus Search

he last two years have been a waiting game – waiting to get back to normal. But what we once considered normal is nowhere to be found. We have entered a new era in which employees are based in the office, at home, or a hybrid of the two. The many layers of the debate over where and how we work have come to the fore again following our prime minister’s declaration that he can’t focus while working at home because coffee and cheese are available – completely overlooking the fact that people spend time making drinks and getting food in an office, too. Lord Sugar cast aspersions on the motives of those now using home more regularly as a place of work, labelling work-from-homers “lazy gits,” while there are many in the mortgage sector who would argue that they’ve worked harder during this period than in any previous era, and that the flexible nature of homeworking has allowed them to find a way through the unrelenting workload. The irrationality of such sweeping statements is accentuated when you consider the irony of travelling to the office only to then spend eight hours on virtual calls – hardly achieving the in-person teamwork objective, wasting travel time/cost, and costing the environment, too. The argument that empowering people to decide where and how they deliver their work will enable them to perform at their best is a compelling one – and some companies have committed to allowing workers to remain fully remote if they desire, with Revolut and Zopa as two examples. This is being balanced against the desire not to damage www.mortgageintroducer.com

company culture. If organisations are not careful, hybrid work will have the potential to disrupt the human connection, engagement, and sense of belonging that business leaders have worked to achieve. Moreover, remote work can make it difficult for new employees to integrate into company culture, as they do not have the advantage of building a connection with that culture by working in the office full-time. There will be plenty who love being in the office with colleagues, and miss the camaraderie and belonging when working at home. But on the flip side, there are many who have found real benefit in being able to do a mix of both, and have felt their wellbeing has improved as a result of not being part of the commuter rat race five days a week. Moreover, disposable income has also increased because of reduced travel costs in particular. The meaning and balance of work have changed for many people through the transition to hybrid working. This is a perfect time for companies to evaluate their culture and determine which aspects need modernising, and a genuine chance for cultures to emerge fully committed to trust, integrity, and inclusivity and to ensuring that hybridisation works well for both employees and employers. A lot of these changes were slowly unfolding before the pandemic, and the enforced restrictions merely accelerated them, giving employees a much greater chance for flexible working practices to become their norm. In the mortgage sector, hybrid working hasn’t appeared to raise significant security and control oversight issues of the sort that might have compromised the ability to follow regulatory standards. What is noticeable, though, is that it takes extra effort for employees in the office to connect with those who are remote to ensure that colleagues are not left out of the loop when

it comes to critical decisions. It is vital to have a strategy (and specific processes and procedures) to ensure all formal communication and outcomes are shared with employees outside of the office. Employees should be encouraged to communicate as much as possible with one another to prevent any divisiveness. Now that restrictions have been lifted, good practices such as away days and in-person meetups in/outside of regular working hours have become a part of relationship management again, but I have learned from listening to operational leaders that leading a hybrid workforce means harder work. Hybrid working models have to strike the right balance between oversight and autonomy. Employers need to make sure managers can provide adequate feedback whilst allowing employees to feel trusted to do their jobs. And leaders need to challenge the inevitable unconscious bias that in-office employees are inherently more reliable and productive. As well, leaders need to ensure that special projects and opportunities are not exclusively granted to those working on-site. Fundamentally, work is what you do, not where you are, and evaluation of the quality of outputs is the right way to consider an individual’s productivity. However, for people embracing remote work, it is imperative that professional networks, mentoring, and personal connections not be weakened to the point where they are gaining flexibility but losing opportunities. We are entering an era in which the power of face-to-face interaction will combine with effective remote work to create a hybrid model that empowers employees and encourages company-wide collaboration. I envisage that those who get this right will build more diverse, creative, and adaptable teams that can meet the future head-on. M I JULY 2022 MORTGAGE INTRODUCER

REVIEW

TECHNOLOGY

Tech and thinking about change Jerry Mulle MD, Ohpen

n May this year, Elias Ghanem, vice president and global head of Capgemini Research Institute for financial services, said, “Banking is in a state of flux. Some 82 per cent of bankers are struggling to identify new customer segments, and 49 per cent claim they are struggling to deliver personalised content through the right channels. “Consumers today, when they look at banks, see three levels: service, value, emotion. Yet when they go to the bank, 29 per cent report they are not getting service banking; they are not seeming to get this basic thing they want. “It’s essential for the banks to have a big shift in their mindset.” What a statement. And a true one. The thing is, the banks and building societies wanting to compete in future and appeal to younger generations swayed by a neon bank card already know they need “a big shift in their mindset.” The milliondollar question is around how they can do this. For institutions trusted with billions of pounds in customer deposits and responsible for supporting access to homeownership for millions of people each year, delivering this is a more complex conundrum. What Mr Ghanem hit on when speaking in May was the three things that matter to the end customer: service, value, and emotion. When a start-up considers its business plan, the point of its product or service is paramount. Always, the point is whether it gives customers what they want. Having identified this as the business objective, how that’s delivered

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becomes a case of making the tech do the work. When a 150-year-old bank still running on code abandoned in the 1970s considers its business plan, it should be just as simple. Does it give customers what they want? Too often that’s a no, but frequently it’s not because of a lack of desire; rather, it’s because of a realisation that the legacy tech that underpins everything means that the core platform and processes cannot deliver what is required – unless the organisation is prepared to invest tens of millions. And even then, they can’t really be sure they will get everything they need. It’s the reason why, historically, the biggest banks and building societies are such a patchwork of technology: the slick front-end interface is a purpose-built shiny veneer designed to make customers think they’re being given what they want. But this approach does not deliver an improved target operating model or customer experience. At best it is an improved process, but rarely for the borrower – particularly when something goes wrong. The shift in mindset Mr Ghanem refers to hinges on exactly this point. If you start with service, value, and emotion, understanding the scope of what your business needs to do to thrive long-term becomes much simpler. Putting that into practice where legacy tech has historically proven a barrier to growth or expansion can feel daunting, though, especially given recent and notorious examples of migrations from one system to another causing devastation. There is another way to think about investing in technology to improve your service, however. It’s to recognise that evolution is constant. What the customer wants today is different from what that same customer will want tomorrow. In five years’ time, it will be unrecognisable. Hardly the basis for

arguing the return on investment that upgrades would offer. Some see this as a threat. Those who see it as an opportunity are thinking with a new mindset. The speed of change enabled by technology’s development has changed the way we need to think about change. We aren’t moving in visible steps in today’s economy; delivering value to customers means constantly evolving service and reacting to customer emotion on a personal level. This means flexibility becomes fundamental. It means developing the ability to power up one element of service one day and power down if or when demand subsides. The ability to serve a localised demand virtually instantly and turn off the cost to the business when that need ceases. Flexibility isn’t just a nice jargony word for ‘new.’ It’s the definition of how banking must deal with the way people function in today’s world. The answer? Cloud platforms that provide affordable scale, agility, interoperability, robustness, and security to enable lenders to deliver better operating models now and in the future. M I

www.mortgageintroducer.com

REVIEW

TECHNOLOGY

Environmental data will affect everyone in the value chain Mark Blackwell COO, CoreLogic

YC: know your customer. It’s a fundamental for any business hoping to succeed; it’s also a regulatory requirement and critical anti-moneylaundering and fraud-avoidance tool. But intermediaries, by their very definition, have more than one customer. First and foremost are their clients. Understanding their financial situations, competence, and needs allows you to advise on the most appropriate products or services for them. But there is another customer: the investor. Of course, not all mortgages are funded through securitisation, but as with a lender’s credit committee reviewing risk appetite based on back book exposure, so the saleability of a securitisation rests on the aggregated risk profile of that book. Asset quality is one component. Borrower affordability and creditworthiness are others. A third is emerging as vital for mortgage books to meet investor requirements – climate exposure. Toward the end of last year, the Financial Conduct Authority (FCA) published two policy statements confirming rules and guidance to promote better climate-related financial disclosures based on the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD). The FCA said, “Better corporate disclosures will help inform market pricing and support business, risk, and capital allocation decisions. And improved disclosures to clients and www.mortgageintroducer.com

consumers will help them make more informed financial decisions. This, in turn, will strengthen competition in the interests of consumers, protecting them from buying unsuitable products and driving investment toward greener projects and activities.” The new rules are being rolled out in phases, with publicly listed companies among the first required to submit formal TCFD disclosures. From 1 January 2022, larger FCA-regulated asset managers and asset owners – including life insurers and pension providers – have also had to disclose how they take climate-related risks and opportunities into account in managing investments. The rules will apply to smaller firms from 2023. These rules are designed to change corporate and commercial behaviour in order to reduce carbon emissions and meet the UK’s legally binding net-zero targets. Changing the rules means changing what banks can lend against and what third-party investors will fund. The buy-to-let sector is where this is becoming most obvious on the front line, underpinned by incoming regulation requiring minimum energy efficiency thresholds on new and subsequently existing assured shorthold tenancy agreements. Though government has stated it wants existing residential property, be it privately owned or rented, to be Energy Performance Certificate (EPC) band C or above by 2028, TCFD may accelerate the need for this shift. Obviously, enforcing EPC minimumband thresholds is possible only when a property is bought and sold under existing regulation – something bound to slow energy efficiency improvements across the UK’s housing market. But regulations can and do change. We are all aware of how front-andcentre environmental, social, and governance (ESG) responsibilities have

become across commercial activity in all sectors. The next stage will be more granular application of this awareness – turning nice-to-have into need-to-have. Lenders and their intermediaries have a real opportunity here. There is already a filter that exists by virtue of there being an adviser in the transaction chain. Unsuitable borrowers, those who simply cannot afford to buy and those whose credit record makes them too big a risk for any lender to approve finance for, are all filtered out before the application ever begins. The broker’s judgement is part of the value intermediaries offer lenders. There’s also a filter on the security front, though it’s less restrictive now. All brokers know a flat above a curry house, fish and chip shop, or late-night drinking establishment is going to limit mortgage options for a prospective borrower. Ditto Japanese knotweed, bamboo, subsidence, etc, etc. Now, climate-related risk is baked in to criteria for the biggest lenders in the residential mortgage market. It will only become more important – a sort of climate credit rating for a home. As it stands, the EPC is probably the best tool for assessing that climate risk, along with mapping of flood plains and areas where ground movement is more frequent. Energy efficiency will have an increasing impact on asset values in the future, while properties located in areas with greater exposure to more extreme heat and precipitation are likely to become higher risk for underwriters. Understanding what data is available and how quickly it will appear in the process will enable intermediaries to add real value in this regard to their respective clients and lenders. Brokers will act as the frontline filter when it comes to this evolving criterion. Understanding that early could prove a real competitive advantage. M I JULY 2022 MORTGAGE INTRODUCER

REVIEW

TECHNOLOGY

Sometimes, clouds are green Steve Carruthers head of business development, IRESS

ll B2B industries can fall into the echo-chamber trap, and it’s worth remembering that from time to time. Rather than focus my column this month on why our service makes your lives so much easier and more efficient – it does! – I will instead consider how everyone’s increasing proclivity to host their IT infrastructure in the cloud offers real opportunities to deliver greener practices. Of course, cloud operations offer a lot more than better environmental practices. But my focus here is on something that many running businesses have not really appreciated. For a lot of the population, understanding exactly how technology influences their lives and how it will influence the lives of their children in the future boils down to smart phones getting smarter and cars driving themselves. Ultimately, the way we interact with technology as consumers will be the defining feature of that understanding. Remembering that this user interface is just the very tiniest tip of the iceberg, however, reveals the vastness of how technology is shaping everything we do and how we do it, and the opportunities to achieve something a little more profound with it. Most people know about the cloud in the sense that they know it means storing data in a big, slightly fluffy, conceptual way so that you can access it from anywhere through the internet. An awful lot of people know this is “green” in the sense that it wipes out the need for banks of servers based in offices, pumping out heat and often necessitating an energy-guzzling cooling system (often known as a desk fan). Using less energy is the neatest way

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“Total investment in global data centre infrastructure more than doubled in 2021 to £44billion, with the number of data centre transactions rising 64% from 69 in 2020 to 113 in 2021” to cut carbon emissions. But this data is still stored somewhere physical, safeguarded by cloud providers in huge data centres around the world. The amount of energy required to power and cool each data centre is enormous – so, maybe not so green? At first it might appear counterintuitive, but it makes sense environmentally. And it’s why total investment in global data centre infrastructure more than doubled in 2021 to £44billion, with the number of data centre transactions rising 64 per cent from 69 in 2020 to 113 in 2021, according to a report from global law firm DLA Piper. The firm said already this year, to 7 June 2022, a further 41 transactions have gone through, setting the pace for investment to double this year again. The big players, known as hyperscalers, include Amazon Web Services, Facebook, Google, and Microsoft, and they are investing billions in ever-bigger data centres. After an embarrassing moment for Facebook back in 2010 when it was discovered its data centres were run on coal-fired power-station energy, there’s now a solid commitment to situating centres in locations where they can be powered by renewables – wind, solar, hydropower – and cooled more environmentally efficiently. A report commissioned by Amazon Web Services published last year claims that businesses in Europe can reduce their energy use by nearly 80 per cent and carbon emissions by 96 per cent by storing data in the cloud rather than

operating their own data centres. According to the AWS report, a one-megawatt corporate data centre is capable of reducing emissions by about 1,079 metric tons of carbon dioxide a year – equal to offsetting the electricity emissions of 50 households a year or taking 500 cars off the roads. While hyperscale data centres – scale referring to volume of data as opposed to geographical footprint – use considerable amounts of energy, by aggregating many inefficient office-based servers, there is a significant energy saving overall. It also solves the conundrum of having an office in the middle of the city where direct access to renewable energy sources is limited while knowing your data storage is running on green. Working out how to support the UK’s housing market is a huge priority, given it’s responsible for the largest slice of Britain’s carbon emissions after the energy sector. Green mortgages to incentivise energy efficiency improvements are a step in the right direction, but have further to evolve to drive meaningful change at scale. The mortgage market, meanwhile, sits behind our housing market, servicing it almost invisibly. I couldn’t tell you whether emissions generated by the mortgage sector, banks, building societies, mortgage advisers, and all the fintechs knocking around are factored into domestic housing’s contributions. I don’t need to tell you that being an environmentally conscientious business is no longer just a nice-tohave; it’s necessary – and becoming more so. But I can tell you that there is more than one way to make a difference and tick your TCFD (Taskforce on Climate-related Financial Disclosure) box while you’re at it. Switch to the cloud. And the best part is, it will save you time and money to boot. M I www.mortgageintroducer.com

REVIEW

TECHNOLOGY

Now is the time to take stock of your tech situation Neal Jannels MD, One Mortgage System (OMS)

s the summer finally arrives, we’re seeing a healthy level of activity across the housing and mortgage market. However, when compared to the same period in 2020 and 2021, tackling these ‘healthy levels’ could seem like a walk in the park for advisers who have consistently faced an avalanche of enquiries for an array of property purchases. Not that this lull in activity comes as any great surprise. Previous levels were unsustainable and driven by extenuating circumstance that were not going to last forever. This was evident in recent figures from UK Finance that showed that the number of people moving house dropped 42 per cent when compared to Q1 2021, with the number of first-time buyers down by 12 per cent. To maintain some perspective, these numbers remain slightly above the pre-pandemic levels of 2019, and changes in people’s requirements when it comes location, space – inside and outside – and general lifestyle choices around their homes continue to drive demand throughout the property market. This is so even though challenges remain evident for many existing and potential homeowners. The trade body research also included a focus on the potential impact of the cost-of-living challenge. This found that the average mortgaged household will see a three per cent reduction in its disposable income after mortgage, credit commitments, and living costs. However, the costof-living squeeze is projected to be www.mortgageintroducer.com

felt most acutely in lower-income brackets, which have around half the spare income of those in higher brackets even before cost-of-living pressures are factored in. So what does this all mean for advisers? There are many different ways to look at this. It could be that some intermediary firms will be afforded a little more time to take a short step back to evaluate the quality and extent of the business written over the past two years. When business is flooding through the doors, there is little time to step outside your bubble and realise where the efficiencies and inefficiencies lie throughout the entire advice process and how this could be improved. This means now could be the ideal time to embark on a tech stock-taking to assess what has, and what hasn’t, worked from a tech perspective. This can help weed out any tech tools that are not adding value and allow you to focus on maximising your time, energy, and resources on the ones that actually are. There may also be tech holes that firms need to fill. If so, speak to an array of tech providers to see what solutions they already have in place, what they are working on, the timescales involved, and whether any upgrades are included in their current pricing structure. Of course, these represent only a sample of the kinds of questions to ask. As important is to get to know the people behind the tech, their expertise/backgrounds, and the type of ongoing support you will receive along the way. In addition, and as previously alluded to in the UK Finance data, the squeeze on personal finances is likely to lead to many borrowers seeking alternative forms of lending, a trend which should allow advisers to identify opportunities in a number of

different product sectors. An example is the second-charge marketplace, as activity levels continue to grow amongst prime borrowers. This was evident in the latest iteration of Evolution Money’s quarterly data tracker, which highlighted an increase in both volume and value for prime borrowers accessing secondcharge mortgages. Looking at its total lending data for the last three months, up until the end of May 2022, the product split by volume of mortgages was 69 per cent debt consolidation/31 per cent prime, and by value 60 per cent debt consolidation/40 per cent prime. This is compared to the previous period when both the volume and value of lending to debt consolidation borrowers was higher. One of the reasons put forward for the greater use of second-charge mortgages by prime borrowers was the rise in first-charge mortgage product pricing and interest rates in general, with existing borrowers not willing to remortgage into poorerpriced options. And this is difficult to argue with. Second-charge is a sector that has progressed greatly from a tech standpoint, and this continues to be evident in ongoing conversations we are having with a raft of second-charge specialists and lenders with a second-charge arm that want to integrate with OMS. However, this is not the only sector to come under greater intermediary scrutiny. Many proactive advisers are using this time to explore opportunities across the lending spectrum, and a key component within this is employing the support of technology to help them do just that. Which takes me back to those all-important questions and how vital it is that the answers match the firm’s outlook and key business requirements as we move ahead. M I JULY 2022 MORTGAGE INTRODUCER

REVIEW

TECHNOLOGY

Let experts help with the heavy lifting Tim Hague director Sagis

hile we all know the mortgage market in the UK is unique in many of its dynamics, it bears many similarities to the oil and gas markets and, when you think about it, the way big tech has evolved. Stripped right back, oil companies drill for oil, rigs extract it from wells, pipes transport it back to refineries on shore, tankers and freight transport it where it needs to go, and some of it ends up in garage forecourt tanks where it’s pumped through smaller pipes and into our cars to make us go. The mortgage market’s commodity is money. But the wells and pipework function in the same way. Deposits in the bank or building society are called up through a maze of integrated (and often cobbled-together) tech systems before making their way into businesses and customers’ pockets via the pipes that connect lenders to valuers, conveyancers, and mortgage brokers. The system has grown organically, and resembles an errant vine untended – but one that nevertheless produces fruit. Demand for mortgage finance filters the other way through this complex machinery: from broker and sourcing systems, though networks and clubs, finally arriving on the underwriter’s desk. And that’s just the vertical network – there’s each sub-sector with multilateral relationships and pipework that builds further complexity into the machine. When you think about the market in this way, as complex and interconnected as neural pathways, it puts the task of upgrading legacy technology into stark relief. Where on earth do you start? If you break

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one bit to replace the lead piping with steel, the pressures change and blow a hole in another bit farther along the pipe. It’s the enormity of knowing you have to invest and upgrade in newer, faster, slicker technology and systems or admit you’re on a slow descent to extinction. Eventually, your systems simply won’t work. The neural pathways have changed, and you are no longer connected. I sound like I’m painting a very gloomy picture. But it’s not all bad news. The thing we tend to forget is that we don’t all have to be experts in everything. Smaller lenders and building societies in particular are more vulnerable to thinking they do need to be experts in everything. Without the luxury of thousands of staff and the machinery of a huge bank in which the IT department is (one hopes) rather slicker than Steve downstairs who knows about computers, small teams learn to muck in. This makes the argument for outsourcing much more compelling for smaller lenders struggling to know what they should do about tech. You will know where your senior team’s strengths lie, and assessing your resources will give you a clear picture of where you need outside support. In my experience, this comes in two distinct forms: You need the person who speaks mortgages and tech to speak to the mortgage people, and you need the person who speaks tech, who also speaks to the guy who speaks mortgages and tech. Sounds complicated, but it’s not. The problems often arise when people who speak mortgages speak to people who speak tech. It’s two countries divided by a common language, and after a lot of time, pain, and money, you realise you didn’t know what you wanted, and they didn’t know what you needed. It’s for exactly this reason that I’ve teamed up with Coeus Consulting,

an internationally recognised independent IT advisory firm focused on helping business and procurement leaders deliver strategic change. Many tech firms have brilliant solutions. But understanding which pieces you need and in what order you need to deploy them is about understanding your challenges and opportunities before you select solutions. That’s not who Coeus are, and they really showed that during this year’s annual Building Societies Association conference in Liverpool. “It was a good opportunity to meet, listen, and reflect on what is really challenging lenders in the mutual sector,” said director Rob Walker following the two-day event. “My conclusion is that building societies are in a unique place in time and need a unique response. The pandemic has left many with bolstered reserves and a renewed vigour for their social purpose and commercial missions. But our new market of rising rates and stretched borrowers is changing what we will need from our operational systems and processes. We will need to develop new product propositions and customer experiences quickly if we are to meet the rising risk challenges head-on.” He is spot-on. This unique moment is not an opportunity merely to lift and shift existing legacy technology and legacy process issues onto another platform. If you truly understand what your business needs in terms of operational excellence, there is a fighting chance you will make the kind of targeted change you really need. There are many solutions around, some of which you may not have encountered before. Advice is key to finding and examining them all. “It’s why we believe it is imperative to know what problem you are trying to fix before you start,” Walker said. That’s exactly what I’ve been saying – and exactly why I believe Sagis and Coeus will make a great team. M I www.mortgageintroducer.com

REVIEW

BUY-TO-LET

It’s all about supply Cat Armstrong mortgage club director, Dynamo for Intermediaries

upply continues to be a pressing issue across all factions of the housing market. From a new-build delivery standpoint, targets have been missed year on year, and this continued in 2021. This fact is evident in data analysed by Unlatch, which centred around the number of new home completions seen across the UK and how they stack up when compared to the government’s own targets. In particular, the figures from the past few years make for some interesting reading. THE HOUSING SUPPLY GAP

Despite the pandemic, a respectable 210,719 new homes were completed across the UK in 2019–20, the second-highest level seen since 2007–08 – but still 30 per cent off the pace, missing the 300,000 target by almost 90,000 homes. The latest data shows that the government’s failure to reach its targets hit a new 14-year high in 2021, as only 181,810 new homes were completed across the UK, 40 per cent below their target of 300,000 new homes and a shortfall of 118,190 – the highest number since 2007. When it comes to the private rented sector, legislative change has fuelled a decline in the number of available properties to rent, a trend that sparked a recent report from PropertyMark entitled A Shrinking Private Rented Sector. Within this, it was outlined that the UK average number of properties available to rent per branch decreased from 30.4 to just 15.6 between March 2019 and March 2022, clearly revealing the loss of available places for renters to live. It added that from 2019 to 2021, www.mortgageintroducer.com

the average number of buy-to-let properties bought and the number sold per estate agent branch were fairly similar. March of this year (2022), however, saw a marked difference for the first time. Survey results revealed that the average number of buyto-let properties sold in March was 9.6, while the number purchased by investors was only 4.5. These figures suggest that less than half of PRS properties sold are currently returning to the sector. The rest are transferring to owner-occupier dwelling. RISING RENTS

The lack of supply in the rental market is one of the primary reasons why rents continue to increase. There are also rising costs for landlords to take into consideration due to the legislative changes mentioned above, and these outgoings/profit margins could come under further pressure from the anticipated Renters’ Reform Bill and upcoming energy-efficiency targets. This demonstrates how important it is for the government to act appropriately in achieving the right balance when it comes to protecting landlords’ needs as well as those of their tenants. And with landlords long undervalued, this is more apparent than ever, especially when it comes to helping improve the quality of rental accommodation in an economic climate that continues to develop additional affordability burdens from both a residential and rental perspective. Average rents in the UK were reported to have hit a new high of £1,103 per calendar month in May, up 10.6 per cent on the same time last year, and an increase of 1.1 per cent when compared to April. This is according to the latest data from HomeLet, which indicated that every region in the UK has seen annual growth, whilst every region excluding the North East (-0.7 per cent) has seen monthly growth, with Northern Ireland seeing the largest monthly variance as rents climbed 1.7 per cent higher there than the previous month.

HIGH TENANT DEMAND

Despite this growth in average rents, further data from Propertymark pointed to sustained levels of high demand from prospective tenants, some of which are even said to be creating CVs for their children and pets as well as offering over asking price to secure properties. An average of 95 new applicants were registered per member branch in April, compared to 78 per branch recorded in February. In addition, terminated lease lengths extended to 24 months on average across the UK in April, up from the long-term average of 19 months. Seventy-five per cent of member agents reported month-onmonth rent prices increasing in April compared to the pre-pandemic figure of just 31 per cent on average. This raft of data and reports outlines just how important a role the private rented sector continues to play in the overall UK housing market. But it also raises more questions than answers when it comes to solving the supply puzzle. That puzzle is, sadly, unlikely to be cracked anytime soon. M I JULY 2022 MORTGAGE INTRODUCER

REVIEW

BUY-TO-LET

Busting the MUB myths SO WHAT IS AN MUB?

Grant Hendry director of sales, Foundation Home Loans

andlords’ quest to maximise yield continues to drive interest across many areas of the buyto-let marketplace, particularly when it comes to houses in multiple occupancy (HMOs) and multi-unit blocks (MUBs). For context, the Q1 2022 Landlord Panel research from BVA BDRC outlined that average rental yields for HMOs were 6.8 per cent and 6.3 per cent for MUBs compared to an overall average yield of 5.5 per cent for all property types. In Q4 2021, 21 per cent of landlords reported owning at least one HMO. There has been plenty of commentary and many educational pieces in recent times around HMOs, but MUBs still tend to fly a little under the radar. And, from speaking with intermediaries on a regular basis, I can say that there remain a few misconceptions around lenders’ requirements for a mortgage on such property types.

An MUB is a freehold property that has been split into self-contained flats that are not subject to individual leases. This could include a block of flats or a house that has been converted into flats. BUSTING THE MYTHS

This is an important distinction to make, as a relatively common misconception remains that an MUB can be multiple houses or bungalows that are held under one freehold title. This is not the case. If this were the case, from a Foundation Home Loans standpoint, we would require the titles to be split on, or before, completion to enable us to mortgage each individual property. Another area that can sometimes be misinterpreted occurs when a borrower intends to reside in one of the properties; this is a common reason why these types of cases can sometimes be declined during the application process. MUBs can also easily be confused with HMOs. For example, a MUB does not have rooms that are let out individually to tenants who share basic amenities, such as kitchens and bathrooms. This would be classed as an HMO. If a landlord owns a MUB in which one or some of the units are not self-contained, we class this as a hybrid HMO MUB. It’s also important to reiterate that a multi-unit block is not a block of flats with separate leasehold titles. If a client owns a block of flats – all with separate leasehold titles – and a client or party connected to a client owns the freehold title, these would still be classed as leasehold flats rather than a MUB. THE VALUE OF A STRONG LENDING SUPPORT NETWORK

These differentials signify how important it is for advisers to establish relationships with lenders who have the underwriting capabilities to assess such cases on an

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individual basis. It also demonstrates the value of having access to a good BDM, regional account manager, or a broker help desk to ensure that advisors fully understand the type of product their landlord clients actually need and whether and how they fit lending requirements, and to ensure that they have the correct occupancy status prior to the decision-in-principle submission. The quality and accessibility of this support network will become increasingly vital as this and other, more complex BTL product types become an increasingly appealing option for portfolio landlords, who are currently dominating purchase activity across the BTL market. MEETING SHIFTING LANDLORD DYNAMICS

To satisfy shifting landlord dynamics, lenders are constantly evolving their product offerings when it comes to rates, criteria, and fees. Changes within these product offerings – which are commonplace in the current economic environment – also highlight the benefits gained from landlords working closely with advisers who have strong knowledge of and experience in the BTL sector. For example, we have recently expanded our green mortgage range to include HMOs (up to eight bedrooms) and MUBs (up to 10 units), supporting those landlords to maintain the highest standards of quality for that sector. The MUB and HMO sectors are likely to see further activity and bespoke offerings emerge over the course of 2022 and beyond as more portfolio landlords tap into the opportunities that remain on offer throughout the BTL sector. This also signifies good news for the intermediary market, as these types of cases tend to require more of specialist advice because of their level of complexity and legislation. We look forward to supporting you. M I www.mortgageintroducer.com

REVIEW

PROTECTION

When is a mortgage calculator not a mortgage calculator Kevin Carr MD, Carr Consulting & Communications

ast month, the Advertising Standards Authority (ASA) launched its annual report in which it made it clear that it intends to rebalance its regulation “to be more proactive” and aims to use technology and AI to better regulate advertising at scale. One of the areas this will affect significantly is lead generation. When done right, lead generation is undeniably beneficial for sellers, buyers, and the end customer alike. But, sadly, far too many firms are still not using customer data properly. While the more obvious misuses of customer data are often easy to identify – false claims within advertising, reselling of customer data, etc – one technique that is becoming more and more common (and is an area in which the ASA is becoming particularly interested) is where firms appear to be offering a useful service – i.e., an online comparison, or calculator – but are in fact providing an introduction. While the customer in this situation is almost certainly unaware that they have become a lead, the buyer of the lead also often claims innocence, saying they had no idea how that lead had been generated. In its Consumer Duty paper, the FCA is cracking down on these “Oh I didn’t know what my lead gens were doing” or “They told us they were doing things compliantly” excuses and putting the onus on the lead buyer to do its due diligence and keep documented proof of how they work www.mortgageintroducer.com

with third-party lead-gen companies. This – combined with the fact the ASA is going to be relying less on consumers reporting they’ve been tricked, and more on stopping those practices in the first place – has created a significant shift in liability. “We have long been pushing for more transparency in the customer journey, and the ASA’s renewed focus on proactive regulation at scale combined with the FCA’s Consumer Duty paper is certainly welcome news for us and others working hard to clean up lead gen,” said Alain Desmier, founder of Contact State, a firm that certifies leads for buyers. “The FCA is basically saying lead buyers are responsible for the advertising that generated the lead, even if they are paying a third party. And that if they buy leads where the consumer has been tricked, via a tool online, both they and the lead seller are in breach of the spirit and detail of the consumer principle behind the consumer duty.” Ultimately, for the financial services industry to clean up lead gen – and meet ASA and FCA requirements – they need to keep to one simple mantra: consent is king. When it comes to mortgage leadgen, buyers need to be sure they understand the customer journey before that customer is contacted. With these new rules, a lead generator using tools like calculators to generate leads will have to specifically declare they are a lead generator via a very clear disclaimer, because ultimately, every consumer has the right to know what they are consenting to, who they have shared their data with, and what is going to happen next. Desmier warns, “Lead generators need to rethink any tools and calculators they are providing, as

they will now come under renewed scrutiny, while lead buyers need to be aware that they, too, can be held accountable for their lead generators’ practices.” There is clearly no easy fix in stamping out bad lead-gen practices, and those who abuse the system will continue to find new loopholes, but as the ASA, FCA, and other regulatory bodies crack down on fraudulent practices, it should encourage more firms to invest in creating a better standard of financial services lead generation, and put a stop to consumers ending up in a financial conversation they weren’t expecting. NEWS ROUND-UP

• British Friendly has launched levelguaranteed premiums on its short- and long-term income protection product Protect as a new, second premium option in addition to its existing agecosted guaranteed premiums. • CIExpert has appointed Paul Roberts as its new propositions and distribution director. • Lloyds Banking Group has agreed a deal to buy protection distributor Cavendish Online for £12 million. • A former investment banker has been sentenced following a fraudulent cancer claim on a life insurance critical illness policy and an investment scam totalling nearly £2 million. • LV= paid out £5.4 million on individual income protection claims during the first four months of the year, the provider has detailed. • Insurance technology provider iPipeline has released the latest update to its product features report service, allowing advisers to review quotes and product quality more efficiently regardless of product combination or complexity. M I JULY 2022 MORTGAGE INTRODUCER

REVIEW

PROTECTION

Blockages in mortgage market affect life sector Mike Allison head of protection, Paradigm Mortgage Services

or some time, the entire mortgage advisory world – or at least those who engage in writing protection business – has been engaged in a debate as to the perfect time to introduce protection into mortgage conversations in order to get the best results from clients. The very questions asked of distributors by insurers at various reviews regarding the percentage of penetration from mortgage applications to protection applications show how sought-after a statistic this is. I have known networks, in the past, to use it as a measure of note when looking at the key performance indicators of AR firms. Many would say engaging the customer at the outset is the way forward, even if it is only to highlight that the conversation will take place at some stage. Different IT organisations within mortgage sourcing systems have spent considerable time, energy, and cash working on indicative premiums to give to the client while carrying out the mortgage factfind – allowing the customer to at least start to consider the pricing before going through the whole protection factfind and suitability process. At Paradigm we have seen how the usage of Solution Builder within many of our DA firms has supported the increase in the number of products sold per application to cover the requirements of the consumer. The rationale for this has been based more on affordability than the exact sums required to just cover the mortgage – one of the reasons

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we offer the software free to users of the Paradigm Protect proposition. There is little doubt it helps to drive better consumer outcomes when applied in the sales process. The debate here is how practical it is in today’s mortgage environment to get the application process started for life cover at the same time as the mortgage application, and which pitfalls are increasingly being encountered on the way. There is little doubt that placing a mortgage these days is by no means easy. Criteria changes, affordability, and the availability of funds are all challenges that could be having a knock-on effect on the time it takes and on clients’ attitudes to discussing protection to go alongside a mortgage. One of the biggest challenges of all is the time it is taking for conveyances to take place. Of course, conveyancers rely on a number of agencies to support their work, but recent information seems to suggest it is taking up to six months to go through the process. This clearly has an effect on the consumer experience when applying for a mortgage. As well as the negative customer experience, there is another knock-on problem for those who have done the protection work at the same time as the application – that of the underwriting of the client(s) that may have taken place in the early stages of the process. Generally, once insurers have offered an acceptance to the client based on the evidence submitted, they will only hold that acceptance open for a period of three to possibly six months before requiring further medical evidence from the client. The thought of customers going through a plethora of paperwork for more than one lender and then having to wait for the legal process to take its course understandably renders them less than delighted to go back to an insurer

at the end of the process to re-state their underwriting credentials. I have heard from more than one source that once a house purchase went through, that was the last straw, and the protection case(s) did not go ahead. So what can advisers do to soften the experience? As well as explaining the likelihood of delays in the current environment, it may be prudent to look at what different insurers are doing to support the process and making it easy to complete health declarations when and if required. This is by no means an extensive list of what insurers are doing, but I am aware that, more recently, Legal & General added to the OLPC system to smooth the process. If the case is under £500k life or £350K CIC, and for all income protection cases, it offers a sixmonth period. They will accept a signed paper copy of a Declaration of Health (DoH) scanned into an email, or the client can complete it over the phone with the service team – but now, OLPC will trigger an in-built form to complete online via the intermediary. Seven days before the DoH requirement, the agent is automatically emailed a reminder that it will soon be due, and on entering OLPC agents can hyperlink straight to the question set. They can now complete the three key questions online, signing electronically using their secure access, thereby providing a much smoother journey for client and intermediary. Vitality, too, have started to use electronic signatures for their DoH requirements. It may be worth taking these underwriting factors into consideration when making applications that could take some time to complete, and it is definitely worth talking to insurers as to how they are helping mortgage advisers get over what we all hope will be a short-term blip rather than an ongoing industry problem. M I www.mortgageintroducer.com

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REVIEW

GENERAL INSURANCE

Bridging the gender gap in financial literacy and confidence Emma Green director of distribution, Paymentshield

he narrative around women and finance is often not a positive one. Whether it be the gender pay gap, the cost of unpaid care work, or the financial effects of the pandemic, the odds never seem to be in women’s favour. Women also don’t seem to fare as well as men when it comes to financial comprehension. Last year, a major international study conducted by researchers from Germany, the Netherlands, and the US found that, on the whole, men are more financially literate than women, with stronger performance in financial tests. However, the same study also showed a serious disparity in confidence, which the researchers credited with driving the financial literacy gender gap. Women are more likely to plump for a “don’t know” answer if there is one – but, in the words of one of the researchers, “When you force women to give an answer, they often actually do know.” This gender gap is something that emerged in a recent YouGov survey we conducted with 2,059 UK adults. When we asked respondents about their understanding of the mortgage process, only 52 per cent of women described theirs as “good,” compared to 58 per cent of men. The gender difference was more notable, however, when we asked questions that related directly to confidence. When we asked respondents how confident they are that they understand the jargon used to explain financial products and services, one-third of women (33 per cent) said they were not confident, compared to

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one in five men (19 per cent). Likewise, when asked why they would avoid asking a financial adviser a question regarding their financial situation, 18 per cent of women said it is because they struggle to understand or are intimidated by jargon, compared to just 12 per cent of men. Moreover, women seem to feel overwhelmed by financial decisions more often, with 21 per cent of female respondents saying they find managing their general finances overwhelming (compared to 14 per cent of men), and 24 per cent saying they find buying insurance overwhelming (compared to 15 per cent of men). So what does all this mean for advisers? Well, clearly, it’s important to recognise the need to tailor the communication approach to each individual client. However, advisers may not be aware of just how different men’s and women’s relationships to finance are. While age, experience, profession, or even economic status might seem like obvious conversational filters, in 2022 gender might not seem like it requires much nuance in communication. Yet the research suggests otherwise. Obviously, this doesn’t mean being patronising. But it could mean explaining technical terminology or taking advantage of resources such as Paymentshield’s customer guides and jargon-busting glossary as a pre-read or follow-up to client conversations, or even using explanatory videos if clients would prefer to receive information in an alternative format. We also know that women are more likely than men to feel that they don’t know which questions to ask. Tackling this by talking through popular client FAQs is a good approach, as is checking the client’s understanding before moving on, or ensuring there are plenty of opportunities to invite questions. Our research also suggests that women

would appreciate being offered more extensive support. When asked whether they would expect advisers to review their home insurance needs at the same time as a remortgage, 40 per cent of women said they wouldn’t necessarily expect it, but they would be happy if advisers did so, compared to just 31 per cent of men. This indicates that women might be more receptive to receiving more holistic financial support – in turn, presenting advisers with an opportunity to strengthen the client relationship. Advisers don’t need us to tell them that there’s no one-size-fits-all approach to advice, but they might just be surprised by some of the gender differences thrown up by recent research – and it pays to take note. As for wider society, it’s great to see various financial inclusion and empowerment initiatives out there – from both the public and private sectors – to try to bridge that confidence gap. Across the Atlantic, we’re already seeing the gap start to close. The US Bank’s 2022 Women and Wealth Insights study, completed very recently, shows that women are closing in on men when it comes to financial confidence, with just a five per cent difference between the two groups, compared to 13 per cent two years ago. The research showed that younger women are significantly more confident, too – a really positive sign that will hopefully be replicated among each new cohort. Closer to home, we’ll be continuing to monitor gender differences in our research surveys, and I’m hopeful we’ll see that same trend emerging in the UK, too. M I All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,059 adults. Fieldwork was undertaken between 1 and 4 April 2022. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+). www.mortgageintroducer.com

REVIEW

GENERAL INSURANCE

In an age of uncertainty, we must be better prepared Geoff Hall chairman, Berkeley Alexander

s a commentator from Ernst & Young recently said, there’s never been an era when the world was more in need of a high-performing insurance industry. As brokers and advisors, you are on the front line of this charge. Speaking at the British Insurance Brokers’ Conference, mayor of Greater Manchester Andy Burnham commented that “the reality of the times we are living in is that the shots are coming at us with huge pace and regularity that we have never seen before … people are being forced to live life close to the edge.” Clients have a greater need for insurance services than ever before, but just as important, they need quality advice on how to reduce risk. We’re living in a volatile global environment and a challenging risk landscape – illness, cyber and terror attacks, high general cost of living, and natural disasters – meaning that both personal and commercial clients are being asked to weigh what level of risk they are comfortable living with in their everyday lives, as well as to look for ways to protect themselves from unpredictable disruptions and build resilience against emerging risks, all whilst managing their outlay (otherwise known as “looking for the cheapest deal”). Risk management is at the top of clients’ agendas, whether they realise it or not. Therefore, it must also be at the top of yours. You don’t need to be a “risk management” expert; much of it is common sense – and we know it, but clients may not. www.mortgageintroducer.com

The old adage is true: prevention is certainly better than cure. For your personal lines clients this means advice on home maintenance – for instance, keeping up with property maintenance issues such as annual cleaning of guttering to prevent costly damage farther down the line; tree maintenance to help prevent subsidence risks; and, of course, income protection. For commercial customers, advice on cyber protection, identifying potential gaps in cover, and employee benefits would be welcome. Competition is fierce, so if you don’t respond quickly and innovatively to help them protect and reduce their risk exposure, you might lose them to an intermediary that will. EVALUATING THE COST OF UNDERINSURANCE – TIME TO GET THE CALCULATOR OUT

It may shock you to hear that according to Rebuild Cost Assessment Ltd, currently nine out of 10 buildings in the UK that are under a sum insuredbased policy do not have the correct sum insured. Twenty per cent of policyholders are overinsured (on average by almost 160 per cent), whilst 80 per cent are underinsured. Issues with global supply chains are pushing up the price of building materials. This is further compounded by rising inflation rates, which are expected to peak at 10 per cent or higher before the end of this year. The issue of both over- and underinsurance has plagued the industry for years, and the Insurance Act and recent FCA thematic reviews have highlighted how the insurance industry should be doing more to ensure policyholders purchase appropriate levels of cover. This is an opportunity for brokers and advisers to take the lead. Have the conversation with your clients – particularly mid- and high net

worth clients and those with commercial or investment properties. Check their buildings sum insured, ask when they last had a rebuild valuation, and identify whether index linking has been applied. Also, suggest they invest in a survey to ensure they are not at risk of underinsurance. Surveys can be conducted at any point in the policy life cycle – pre-cover, midterm, or at renewal. Your GI provider should be able to help you with this. Here at Berkeley Alexander, for example, we have a new desktop rebuild cost-calculator service, developed in partnership with RICS regulated firm Rebuild Cost Assessment Ltd, that aims to eradicate the problems of over- or underinsurance. Support your clients in setting an accurate sum insured and ensure they pay an appropriate premium for the right level of cover. GET BACK TO BASICS

The pandemic and its aftermath have certainly shone a light on the need to get back to the basics of traditional customer service. In a recent survey by Forbes.com, 96 per cent of consumers say customer service is an important factor in their loyalty, whilst one in three people says the most important aspect of customer service is speaking with a knowledgeable and friendly agent. Sure, some people prefer the convenience of going online for insurance, but others can be deterred by the lack of human interaction when knowledgeable advice is needed, especially when, as mentioned above, we are living in such risky times. When it comes to improving service, brokers and advisers must be consultative, not transactional. It’s about building stronger relationships, being purpose-led in interactions, and being proactive and prompt when responding to client needs. It’s time to get back to basics. M I JULY 2022 MORTGAGE INTRODUCER

REVIEW

CONVEYANCING

Industry must work together to overcome search difficulties Karen Rodrigues director of sales, eConveyancer

hen it comes to a housing transaction, buyers, sellers, and intermediaries face no shortage of challenges. There’s a good reason why the process of home-buying is so often cited as one of life’s most stressful experiences. One of the biggest frustrations that we regularly hear about from intermediaries and their clients is the amount of time it can take for local authority searches to be returned. Understandably, the pandemic really affected the times such searches take, and things have not particularly improved since COVID was at its height. The government has aimed for the target of returning search results within 10 working days; however, the reality really is rather different. There can be enormous variances in the time taken to complete these searches, depending on the local authority you’re dealing with. While some will be able to turn around the results within a week or so, with others you’re looking at far longer wait times. In fact, we know that some local authorities are taking as long as 30 to 35 working days. In real terms, that’s up to seven weeks of simply waiting for those search results to be returned, with everyone involved knowing full well that the case cannot proceed without them. This is a nightmare for everyone involved. Clients are left in a state of perpetual anxiety, particularly given the industry’s lack of transparency.

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They have no idea why their case has ground to a halt, nor how long it is likely to be before things start moving again. This has a knock-on effect on other stakeholders, too. Intermediaries end up fielding calls from stressed-out buyers and sellers desperate for an update, taking up valuable time that could be better spent advising other clients. In the worst-case scenarios, these delays don’t just lead to heightened stress levels, but actually cause cases to collapse entirely. That’s not just heartbreak, but a financial loss, too. WHAT’S DRIVING THESE DELAYS?

There are various factors at play here. Resourcing is obviously going to play a part. The number of staff able to carry out the tasks required of these searches is not uniform across local authorities; while some will have a decent-sized team able to perform this job, others will be relying on just one or two members of staff. As a result, any illness, holidays, or unexpected absences can have a sharp impact on return times. There are also differences in demand levels. Certain areas have seen greater levels of activity from would-be buyers; what’s more, some areas have become far more in demand as work and lifestyle habits have changed since the pandemic. As a result, the workloads faced by these local authorities has increased, resulting in longer turnaround times for search results. Of course, it’s worth bearing in mind that this is a job that’s important to get right. It’s crucial that buyers be armed with accurate information about the property they are looking to purchase, and that means having the searches carried out properly and accurately. Cutting

corners in order to cut those wait times serves no-one. Yet surely there is room to speed things up somewhat? WORKING TOGETHER

It is abundantly clear that in some areas, councils simply cannot cope with the search workloads they are currently faced with. There is no easy solution either, which is why it’s important for the property industry to come together to make the case to central government that this is an area that badly needs more funding. After all, we have yet more schemes being launched aimed at helping people onto the housing ladder, like the revamped Right to Buy and the benefits-to-bricks proposals. But home ownership won’t happen without the right infrastructure, such as improving local searches. Intermediaries and conveyancers alike have an important role to play in preparing clients for the potential timeframe they face in getting these searches returned, laying the groundwork so that they know what to expect – and why. It’s also crucial that we work together to keep buyers and sellers moving swiftly when it comes to returning other forms of paperwork or documentation needed for the transaction. A delayed search result doesn’t need to be a disaster if everything else related to the deal is sorted promptly; it’s when there are additional delays elsewhere in the process that the case can hit trouble. There are elements of a transaction that are simply beyond the control of intermediaries and conveyancers, which is far from ideal. However, by being proactive, together we can reduce the chances of those elements causing deals to collapse entirely. M I www.mortgageintroducer.com

REVIEW

EQUITY RELEASE

The far future of equity release Andrea Rozario chief corporate officer, Bower

t’s been an odd couple of years. Never again (I hope) will we all experience such stress, tedium, and anxiety simultaneously. Two years on, and changes from the lockdown launching, and it seems like we are finally heading back into normal times. Masks seem to be a novelty again, and after numerous false dawns it feels like life, and indeed business, are back – for good, one hopes. For my corner of the mortgage trade – equity release – the lockdown was a time of consolidation. After a number of years of really impressive growth, coronavirus threatened to knock us back. However, in reality, the market has stayed steady, and this year started like a train. In Q1 of 2022, £1.4bn was released, a very healthy 30 per cent hike from the year before, and the market seems to be cruising toward cracking £5bn released annually for the first time.1 But what’s the bigger picture? Growth is key to any market, especially one that is, admittedly, a smaller piece of a much larger pie, but it can never be the be-all and end-all. The main thing for market success is to focus on the future – not just one year at a time, but the distant future. How will equity release be placed in many decades’ time? How will we be helping older homeowners in the future realise the retirement they deserve? The answer is to bin shorttermism. Equity release is here to stay, so we should act like it. In fact, looking forward cements our place as a retirement solution of the future. In truth, the retirement environment www.mortgageintroducer.com

is set to change dramatically. Everybody knows that the country is greying – but do you know how much? Apparently, around one per cent of people born in 1908 lived to 100 years old; but as many as a third of people born in 2012 will hit triple digits.2 With so many more elderly people around, new retirement finance solutions will be essential. And equity release will have a role to play – I am quite sure of that. So what are the big-picture issues we can focus on now to ensure our industry will be well placed to service the retirees of the future? Well, first is customer protection. If we look after the customers of today, it will inevitably be easier to handle those of tomorrow. Customer protection should be at the heart of everything we have done, are doing, and will do

in the future. And we are demonstrating that more and more. The recent Equity Release Council announcement of another consumer standard – namely, the right of every customer to make penalty-free partial repayments on every council-backed lifetime mortgage – is another step in the right direction. But let’s make strides now so that steps in the future will be far easier. M I *1 https://www.mortgagefinancegazette. com/lending-news/equity-release/ value-equity-release-hit-newrecord-q1-rising-30-5-key-laterlife-25-05-2022/#:~:text=In%20 Q1%202022%2C%20customers%20 could,compared%20to%2010%20years%20ago. 2 https://21stcenturychallenges.org/ britains-greying-population/ JULY 2022 MORTGAGE INTRODUCER

REVIEW

EQUITY RELEASE

We need to talk about care Alice Watson head of marketing, insurance, Canada Life

equiring social care in later life is often a difficult and intensely personal decision for an individual or family unit to make. All too often this decision is brushed under the carpet for as long as possible, which can sometimes limit the opportunities available when it comes to care decisions. By approaching the subject with your clients or loved ones as early as possible, wheels can be put in motion that can let your clients continue enjoying their retirement with peace of mind and security. It is concerning that Canada Life research1 has discovered that more than 70 per cent of over 60s have given no thought to planning for later-life care, despite the fact that demand for such care is on the rise. This is evidenced by analysis from the King’s Fund, which found that in 2019/20 1.9 million people had requested support from their councils, an increase of over 100,000 when compared to 2015/16.2 It may not be an easy subject to bring up with your client, but it could be essential in driving a tricky question to the surface. Looking back at Canada Life’s research, we know that people are putting off the conversation; in fact, more than twofifths (44 per cent) of respondents said they would not think about care until either they or a family member gets ill, while more than a quarter (28 per cent) have put off thinking about care because it is emotionally overwhelming. Additionally, a quarter (25 per cent) have put off thinking about care because of the financial anxiety surrounding it. Among those who have thought about care, half (49 per cent) have

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discussed it with family members, followed by a little over a quarter (27 per cent) who are actively saving and building up investments to pay for it, and 17 per cent who are cutting unnecessary spending to try to afford it. Of course, care in older age doesn’t always have to mean a residential care home. There are many options available to provide varying levels of support when or if the time comes, and research shows these are much more popular with the over 60s. A fifth of respondents would opt for a move into assisted living, and a further 19 per cent would downsize to a smaller property. Sixteen per cent would rather pay for one-on-one care at

home. For some families, releasing equity from their property could help them to finance these additional measures or to make necessary modifications to the family home, such as installing a stairlift or an emergency alarm system. The wealth tied up in property can help to ensure independence and life satisfaction in later years. As advisers and providers, it is our responsibility to design products that support this and empower our customers to feel like they can make decisions out of love rather than necessity. M I *1 Research conducted by Opinium among 2000 UK adults between 20-24 May 2022 2 https://www.kingsfund.org.uk/audiovideo/key-facts-figures-adult-social-care www.mortgageintroducer.com

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MORTGAGE

INTRODUCER

This inaugural group of Elite Women consists of dedicated leaders and mentors who are promoting an inclusive culture across the industry

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SPECIAL REPORT

CONTENTS Feature article ......................................................................32 Methodology........................................................................33 Elite Women 2022 .............................................................35

JULY 2022 MORTGAGE INTRODUCER

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ELITE WOMEN 2022

Building a siste W

orking in an industry traditionally ruled by men can be lonely for a woman. Not to mention arduous, especially if you’re climbing the leadership ladder, which can take several years to achieve. But as challenging as it is, surviving and thriving in a male-dominated industry is possible. Mortgage Introducer celebrates the 65 Elite Women whose achievements, mentorship, and contributions have created a positive and lasting impact on the mortgage industry.

“There are times that I’ve questioned my decisions, but my mentors have been there to encourage me and highlight that I’m going through the same trepidations they went through”

STARTING ON THE RIGHT FOOT All great leaders have great mentors. Marthar Mutinda Scott, mortgage and insurance specialist

at the Mortgage Spot, is one of the lucky women to have known a few mentors in her life. “Engaging with professionals who have trodden

Marthar Mutinda Scott, Mortgage Spot

ELITE WOMEN BY LOCATION

London

MORTGAGE INTRODUCER JULY 2022

West Midlands

Bristol

Hornchurch

Cardiff

Stockton on the Forest

South West

Middlesbrough

Lancashire

Watford

Wales

Rotherham

Derbyshire

Billericay

Edinburgh

Cheam

Guildford

Leeds

Headley

Durham

Woodmansey

Westcliff

Southend

Liverpool

North of England

Greater Bournemouth

Thame

Dublin

Northern Ireland

Mayfair

Milton Keynes

Swindon

Hampshire

Nationwide

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rhood the same road and are familiar with the challenges I face has been absolutely enriching,” the 2022 Elite Woman tells MIW. “There are times that I’ve questioned my decisions, but my mentors have been there to encourage me and highlight that I’m going through the same trepidations they went through. Being able to pick up the phone and speak with someone who will nudge me on has been the ultimate respite. I couldn’t do it without them.” Scott has always been good at maintaining her professional relationships, some of which have made it into friendship territory. Her tip for strengthening relationships with mentors: detach from the professional side of things for a bit and focus on making real human connections instead. “For me, it is never all about work – meeting up for lunch or a glass of wine and talking about our everyday lives does more for me than picking brains in a boardroom,” Scott says. “I’m more likely to relate with your success if I know a bit about the tribe that drives you to wake up every morning and exert so much passion and grit in what you do. Those are the conversations that build lasting relationships.” MOVING UP THE RANKS Liz Syms built her company Connect Mortgages 24 years ago on the foundation of a growth mindset. Growing her team has been a steep learning curve for Syms, and one of the hardest lessons she picked up as a leader was the art of delegation. “When you have been used to doing everything yourself, it is hard to let go and allow others to assist,” Syms says. “I think I have gotten better at it over time. A few years ago, another business owner once told me that everyone has their strengths and weaknesses, and the key is to value the strengths and find resources to support the weaknesses. That has stuck with me, but it is still a work in progress.” As CEO, Syms had to develop extra skills to grow her company and become the leader she aspires to be. One way she does this is by consuming management books. Reading opened up the world of business coaching for her. “While reading, I was led to see some coaching www.mortgageintroducer.com

METHODOLOGY Mortgage Introducer invited industry professionals from across the UK to nominate exceptional female leaders for the inaugural Elite Women list. Nominees had to be working in a role that related to, interacted with, or in some way impacted the industry and should have demonstrated a clear passion for their work. Nominators were asked to describe the nominee’s standout professional achievements over the past 12 months, along with their contributions to diversity and inclusion in the industry and how they’ve given back through volunteer roles and charity work. Recommendations from managers and senior industry professionals were also taken into account. After a thorough review of all the nominations, the Mortgage Introducer team narrowed down the list to the final 65 Elite Women who have made their mark in the industry.

1st year

220

total nominations received

of MIW’s Elite Women List

winners

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ELITE WOMEN 2022

and stumbled across a company called Vistage,” she shares. “This is a group of senior leaders in different industries who come together to learn from each other and get coaching from a group leader. In the 18 months I was with that group, I learned so much, and they are still friends today.” At Lloyds Banking Group (LBG), Elite Woman Lynn Fielder feels supported by the firm’s colleague networks that specialise in different facets of diversity and inclusion. One of the longest-running groups is aimed at helping women unlock their full potential. “Our culture is something we actively seek to improve on an ongoing basis,” Fielder says. “We want

“When you have been used to doing everything yourself, it is hard to let go and allow others to assist” Liz Syms, Connect Mortgages

our colleagues to feel supported and able to bring their whole selves to work, and that is especially true for women with families and caring responsibilities who face additional pressures in their lives.” Antonia Phillips, associate director at Teamspirit Mortgage Advice Bureau and another Elite Woman, believes education, communication, and influence are also crucial in promoting inclusion in the workplace. “Communication is key, and asking our employees for their opinions is very important to us so that we can concentrate on the right things as a business and people team,” Phillips says. “We have adapted our job roles and adverts to ensure an open and diverse approach to recruitment, and we also ensure that DEI features on our senior leadership team agenda.” “We also encourage men to be involved in all of these activities, so they can hear first-hand about the challenges women face in the workplace and provide additional support to LBG’s objectives in these areas. This is valuable work that women can lead and take action on, but we simply can’t do it alone,” Fielder adds. LEADING WITH LOVE There is no one-size-fits-all solution to ensure women’s success in male-dominated industries like mortgage. But from Phillips’ point of view, success starts with reaching out to others and seeking support. “There are real role models across this industry,

MORTGAGE INTRODUCER JULY 2022

and we can learn from them, listen to them and develop ourselves.” Syms adds that it doesn’t matter whether you are running a small business or a team of over a hundred. “What we feel about our own shortcomings, wish we could do better, or the problems we are facing in our businesses, everyone feels the same,” she says. “It also doesn’t matter which industry you are in, or whether you are male or female. Leaders and managers all face the same problems and challenges, and a lot of support can be gained from opening up, sharing and learning from others in similar positions.” That is why Fielder believes embedding inclusion in the company culture and within individual business units and teams is crucial. “We can all be mindful of those who are in different circumstances to us and face challenges that we don’t, and it’s important to encourage an open-minded, empathetic approach in each of our colleagues,” Fielder says. “I see the energy and enthusiasm within my own teams to promote a more inclusive culture and to get as many people involved as possible by engaging colleagues in different ways. “We’ve made some great progress, but there is still lots to do. Our female leadership needs to be more diverse and representative of the society we live in today. Be confident in yourself and your own skills, know that you deserve your place at the table and pay it forward to help other women to achieve more, both now and in the future. I’ve found having a mentor has been useful at various stages in my

“Be confident in yourself and your own skills, know that you deserve your place at the table and pay it forward to help other women to achieve more” Lynn Fielder, Lloyds Banking Group (LBG)

career – someone to bounce ideas off and who also challenges my thinking.” To the next generation of women entering the mortgage world, Scott’s advice is to “be the best in everything you do and make the most of every door opened for you, and every reward given to you. No realms in this profession are out of reach for you, so consider every room you walk into lucky to have you. Cliché as it might sound, aim for the sun to land on the moon.” www.mortgageintroducer.com

Helen Carter Head of Channel Engagement Barclays

Phone: 0778 835 8962 Email: helen.carter@barclays.com Website: barclays.com/intermediaries Jenny Chu Chief Finance Officer finova

Phone: 07825 451 127 Email: jenny.chu@finova.tech Website: www.finova.tech

Melanie Spencer Head of finova Payment and Mortgage Services (previously MCI Mortgage Club) Business Development Director, finova

Phone: 078 2530 0860 Email: melanie.spencer@finova.tech Website: www.finova.tech Monica Bradley Managing Director MB Associates

Phone: 020 8652 5240 Email: monica@mbassociates.net Website: mbassociates.net

Tiba Raja Executive Director Market Financial Solutions

Phone: 077 9969 2044 Email: tiba@mfsuk.com Website: mfsuk.com

Emma Ward

Head of Sales Operations more2life

Esther Dijkstra Managing Director, Intermediaries Lloyds Banking Group

Gemma Harle

Ali Crossley

Catherine Beaumont

Managing Director, Distribution L&G

Partner Divorce Money

Managing Director, Network Advice Business Quilter Financial Planning

Alison Houghton-Corfield

Claire Askham

Helen Harrison

National Relationship Director Master Private Finance

Head of Mortgage Sales Buckinghamshire Building Society

Alison Pallet

Claire Smith

Managing Director Sales Livermore Capital

People and Culture Director Mortgage Advice Bureau

Business Partnerships Director Stonebridge - Mortgage & Insurance Network

Alpa Bhakta

Clare Jupp

Chief Executive Officer Butterfield Mortgages

Group Director of People Development The Brightstar Group

Julia Smith

Anastasia Ttofis

Dorota Frackiewicz

Karen Rodrigues

Managing Director iLA

Director/Client Relationship Manager Get Mortgage

Sales Director Smoove

Annette Miles

Elle Worthington

Karen Scullion

Head of Risk and Compliance Landbay

Mortgage Advisor Point 2 Mortgages

Emily Hollands

Kate Davies

Head of Compliance Pepper Money

Caroline Righton Director of Commercial Finance Key Group

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Head of Specialist Finance OSB Group

Head of Sales Santander

Joanne Carrasco

Regional Business Consultant Openwork

Executive Director Intermediary Mortgage Lenders Association

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ELITE WOMEN 2022

Kharla Mullen

Megan Kearney

Sabinder Sandhu-Robson

Chief Operating Officer Countrywide Surveying

Mortgage and Protection Adviser Mortgage 1st

Head of Operations and Marketing Avamore Capital

Kim McGinley

Michelle Leyland

Sally Laker

Sales and Compliance Director South Yorkshire Money

Managing Director Mortgage Intelligence UK

Michelle Westley

Sandy Kinney

Managing Director VIBE Specialist Finance

Lee Ann Blackwell Director of PR and PA Key Group

Lisa Martin Group Development Director LSL Financial Services

Head of Marketing Brightstar Financial

Chairperson L&C Mortgages

Nici Audhlam-Gardiner

Sarah Green

Lisa Stones

Chief Commercial Officer OneFamily

Head of Customer Acquisition Virgin Money

Operations Director Mortgage 1st

Nicola Goldie

Sarah Tucker

Liz Syms Chief Executive Officer Connect

Liza Campion Head of Corporate Accounts OSB Group

Louisa Sedgwick Managing Director, Specialist Mortgages Hampshire Trust Bank

Louise Flanagan Client Retention Manager Bespoke Financial Group

Maeve Ward Director of Commercial Operations Central Trust & Mercantile Trust

Marie Catch Head of Mortgage Market Development Legal & General Home Finance

Martese Carton Director Mortgage Distribution Leeds Building Society

Marthar Mutinda Scott Mortgage and Insurance Specialist – Founder Mortgage Spot

MORTGAGE INTRODUCER JULY 2022

Head of National Accounts Virgin Money

Paula Mercer Head of Intermediary Distribution Atom bank

Rachel Geddes Managing Director, MAB Global Mortgage Management/ Mortgage Advice Bureau

Rachel Springall Finance Expert/Press Office Moneyfacts

Rebecca Lewis Director of Operations Affinity Group

Reetwija Chakraborty Client Partner/Head of UK Distribution Digilytics

Roxana Mohammadian-Molina

Founder/Managing Director The Mortgage Mum

Suzanne Latimer Head of Mortgage Servicing Pure Retirement

Tanya Elmaz Head of Sales, South Together

Tanya Toumadj Chief Executive Officer Mortgage Broker Tools

Toni Smith Chief Operating Officer PRIMIS Mortgage Network

Tracie Burton Senior Corporate Account Manager HSBC

Vanessa Nicholson

Chief Strategy Officer Blend Network

Sales Director LDNfinance

Roz Cawood

Vicki Harris

Director of Sales Hope Capital

Chief Commercial Officer Kensington Mortgages

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HELEN CARTER

Head of Channel Engagement Barclays

Phone: 07788358962 Email: helen.carter@barclays.com Website: www.barclays.com/intermediaries

omen are more risk-averse than men. It is a myth perpetuated by society and often heard in male-dominated industries. While some women are more cautious than others, saying they have a smaller risk appetite is not quite on the mark. Elite Women like Helen Carter are busting these stereotypes. As head of channel engagement at Barclays, she has to undertake risks that she usually wouldn’t. “Whether male, female or gender-neutral, all good leaders recognise people’s differences and embrace them,” the Elite Woman says. “I see myself as an insight-driven person who seeks to understand the audience I am communicating to. The campaigns I am commissioning today for Barclays would have been deemed quite risky when I first embarked on this role, but through utilising both data-driven insight and intermediary feedback, I have a great understanding of the audience and am confident that the decisions I make work for this audience well.” Carter, an advocate for better mental health support, was the brains behind Barclays’ ‘Keep Moving’ step challenge launched in February 2021. The campaign encouraged hundreds of people across the industry to clock up thousands of steps during the month. It also created a buzz amongst the intermediary community and positively impacted the brand. “As a marketer, [I believe the most critical elements are] communication and an often-underestimated skill, listening,” she says. “Nothing works unless you can communicate your ideas properly, but [listening] to colleagues also ensures that you are communicating in the right way and [embracing] any feedback they may have.”

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JULY 2022 MORTGAGE INTRODUCER

COVER

INTERVIEW

Product withdrawals at short notice damaging broker-client relationships, says head “Fewer products mean less choice for consumers”

udden product withdrawals in response to volatile economic conditions are causing major disruption for brokers as well as additional stress for clients, according to Jonathan Stinton, head of intermediary relationships at Coventry Building Society. Speaking to Mortgage Introducer, Stinton said products were being pulled at short notice and putting brokers in a difficult position with clients. “What brokers are facing on a day-to-day basis, not knowing from one day to the next if the product they’ve recommended 10 minutes ago was going to be there by 5 pm, is going to have a massive impact on their own personal work and professional lives,” he said. “If that product gets pulled at a very short notice, they have to go through that whole advice process again … [causing] massive stress for clients as well.” The comments come after the recent findings by property data provider Moneyfacts that show that there were 518 fewer products for borrowers to choose from in March compared to the start of February, representing the biggest monthly fall in choice since May 2020, during the onset of the COVID pandemic. Moneyfacts said the level of product choice had

MORTGAGE INTRODUCER JULY 2022

“[Lenders are] trying to hold on to the service standards and trying to hold on to an element of commerciality, and the two just aren’t working together because there’s too much demand for the availability of the processing capacity with some of them” taken “a nose-dive,” noting that some providers had pulled “whole LTV brackets,” with one of them temporarily withdrawing its entire range. Crucially, mortgage product shelf-life had plummeted by 14 days, from 42 to just 28, “giving prospective mortgage customers just a short period to secure their chosen deal.” It also suggested that providers could “tighten their lending belts” even further to mitigate the risk of default in the wake of the cost-of-living crisis and volatile economic conditions. But Stinton said fewer products meant less choice for consumers. He said, “It’s never a good thing. Unfortunately, you’re seeing some lenders www.mortgageintroducer.com

COVER

INTERVIEW

taking out products with little or no notice.” Nonetheless, he said he understood the predicament lenders were faced with, and that brokers were not to blame, either. “[Lenders] are trying to balance volumes, service, as well as that increased cost of funding,” he said. “They’re trying to hold on to the service standards and trying to hold on to an element of commerciality, and the two just aren’t working together because there’s too much demand for the availability of the processing capacity with some of them. “Brokers are absolutely passionate about giving clients the best possible product, but if a product has been withdrawn at short notice clients may not have every single piece of paper that’s required.” In the wake of the Bank of England’s latest interest rate decision, some lenders have turned to offering cash-back incentives, a cash bonus normally paid once a mortgage has kicked in, reportedly ranging from £250 to several thousand pounds. Stinton, however, questioned the effectiveness of such a product, particularly in the current economic climate. “While it’s a welcome cash back, is it actually going to make a difference?” he asked. “Ultimately, lenders will have cash backs priced into specific days. It might be a way to have a differentiator in the marketplace, but is it going to help with the cost-of-living crisis? It’s possible for some clients, but I think it’s more of a product feature than something that potentially is going to have a massive impact on people.” He instead suggested introducing a practical, two-day notice period for product withdrawals, which is what Coventry Building Society had done, to help both brokers and borrowers, even if it meant taking a financial hit. “We believe that our pledges and our commitment to the broker market’s more important than the commerciality in certain circumstances,” he said. In practice, this means lenders inform the broker panel by email that a product is either being withdrawn or that pricing is changing. He urged brokers to find the time to speak to their lender contacts, whether it was through support centres or their BDMs, to “keep a handle” on lenders’ criteria on product withdrawals. “Use the tech that’s out there,” he said. “Use the criteria sourcing systems and understand how you can get that information sooner rather than later so that if products are being withdrawn, you can act quickly.” M I www.mortgageintroducer.com

Jonathan Stinton

JULY 2022 MORTGAGE INTRODUCER

INTERVIEW

CLIMATE-CHANGE RISK

Banks and mortgage providers “sleepwalking into disaster” CEO reveals blind spot for lenders

s the co-founder and CEO of climate-risk data analytics provider Climate X, Lukky Ahmed knows full well what happens when the banking sector makes the wrong call on risk assessment. “I spent a lot of my time and career within stress testing. This was off the back of eight or nine financial crises, and we saw what happened when bankers got it wrong when it came to risk management. Generally, it’s the more vulnerable in society who are paying the price for these types of issues,” he told Mortgage Introducer. Watching extreme weather events like the devastating wildfires in California and the Amazon rainforest two-and-a-half years ago finally spurred him into action. Driven by his expertise in the field, including 15 years’ experience in risk assessment, he set about creating his pet project. The result was Climate X, a novel platform for climate-related risk data and analytics that’s powered by artificial intelligence (AI) and geospatial modelling. Designed to deliver assetlevel risk ratings and climate-adjusted loss estimates, the platform is aimed at enabling mortgage providers to take climate risk into account as part of new lending/originations. However, in Ahmed’s view, the mortgage industry has been slow to incorporate climate-risk assessment in its calculations, despite the fact the UK government released its first report on the subject back in January 2012. “Two years ago, nobody wanted to really know. There wasn’t really

MORTGAGE INTRODUCER JULY 2022

Lukky Ahmed

any intent to adopt this type of data. It was too complex,” he said, adding that the industry treated the issue as though it were “a can of worms.” This was especially so when the COVID pandemic came along. “Banks and mortgage providers are being increasingly exposed to these risks in the real world, [but] they haven’t appropriately adjusted their strategies, and they’re sleepwalking into disaster. “Luckily for us, something called the Network for Greening the Financial System [NGFS], which is a collective of 114 central banks, are all working together to deploy regulations now that are forcing the accounting of climate-related risks for the first time.” Founded in 2017, the NGFS aims to fast-track the scaling-up of green finance as well as develop recommendations for central banks’

role in climate change. Among the big hitters to have signed up to the initiative is the Reserve Bank of India (RBI), which joined the NGFS in April last year. For Ahmed, momentum is building behind climate-change policies, and that means that the London-based firm can only grow. “People understand that it’s going to fundamentally change the way that they do business,” he said. “Banks need to account for these things; they need to have budgets unlocked to respond to these types of risks and help their customers to become more resilient in order to protect their own positions and protect the shareholders’ interests.” But is it really possible to accurately predict climate change risks decades in advance? “What we are not trying to do is to say that on a particular date in the future, at this particular time, in this particular location, this is exactly what’s going to happen,” he said. “What we’d like to do instead is to say that based on certain conditions … we set expectations for what might happen in the future, decades in advance.” That might mean obtaining an accurate model on floods or subsidence based on general trends and macro-level studies that incorporate data related to temperature changes and sea level rise – and Climate X can pinpoint a specific location and UK address. “[As a lender] what I care about is what’s going to happen to my specific assets that I lend against. How might those assets or properties be affected? This is where we come in,” he said. www.mortgageintroducer.com

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CLIMATE-CHANGE RISK

Explained simply, Climate X has recreated – block by block, street by street, and building by building – the entirety of the UK. It then includes vegetation and the area’s topography across high-resolution grid squares. “When we combine those things, it gives us a really accurate view and representation of how risk will materialise in a given area, tied to these types of weather events, it means that there’s very little left to chance,” he said. “We’re literally saying that if you believe in the laws of physics and you believe in weather conditions that are going to interact with these environments, we are quite confident that this is not only an area where a flood will happen, but this is how it’s going to manifest.” Ahmed claimed around 74 per cent of accuracy for floods, and with one in every three business properties in the UK at risk of flooding, 40 per cent of which fail to reopen after suffering a flood, according to data provided

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by insurer Aviva, there’s an obvious advantage in being able to plan ahead, business-wise. But it’s not just flooding that’s a potential danger. Ahmed went on to say that he expected up to 25 per cent of properties in the UK to be affected directly as a consequence of subsidence in the next 30 years. “That is important and it’s something that’s been a blind spot because it’s been notoriously difficult to model, and therefore a lot of people haven’t been looking at it. It’s also a longer-term risk.” While he understood the reticence among banks to incorporate climaterisk data because of fears that it could lead to a drop in new business, he reasoned that a drop in an asset’s value from climate change would be of even greater concern for a financial institution. “The value of the asset over time changes, and when you’re exposed to

different types of risk, the property itself becomes less appealing to prospective buyers,” he noted. And lenders or brokers with this tool at their disposal would be in a position to make a more educated business decision, Ahmed argued. Ignoring the risk was no longer an option, he concluded. “Imagine that you’re in a little boat and you’re rolling along the ocean,” he said. “If the surge is pushing you toward the coast, you can do one of two things. You can either row really hard and get yourself safely on to the beach, or you can just let destiny take its course, hope for the best, and smash against the rocks. “Either way, you’re moving in one direction, and that direction is inevitable. The question is, how do you respond to those risks? And I don’t think there’s been a moment in history where foresight has proven to be a bad thing.” M I

JULY 2022 MORTGAGE INTRODUCER

INTERVIEW

FIRST-TIME BUYERS

“Paradigm shift needed to help first-time buyers” CEO on how to disrupt the traditional mortgage industry

Vadim Toader

ccording to research by bridging finance lender KSEYE, one in three UK borrowers has been rejected by a lender on at least one mortgage application submitted by them in the last five years. In separate research by The Mortgage Lender, it found that 34 per cent of would-be borrowers were turned down because of irregular income or mounting debts. But as far as Vadim Toader is concerned, there’s often a far more obvious reason. He should know, because the CEO and co-founder of Proportunity was turned down for a mortgage once, much to his surprise. “I went to Oxford – one of the best universities I could apply to. Afterwards I got one of the hardest jobs I could get in London as an investment banker. And then when I went to buy a house, I was told, ‘You can’t afford it … you’re £100,000 short,” he told Mortgage Introducer. “I was already making more than the average salary [then]. But there’s a lot of people who don’t have that option. “It feels like you are penalised – if you’re not a banker, you’re screwed. That’s kind of what the current system is. You’re either born rich or you have

MORTGAGE INTRODUCER JULY 2022

to be a banker. And I don’t see that having any logic from a government policy [perspective] or [from] a human decency perspective.” Fintech-driven lender Proportunity was set up to disrupt the traditional mortgage industry and, as the company blurb boldly states, “make homeownership accessible for all.” To do that, Proportunity allows firsttime buyers with a five per cent deposit to secure a mortgage while lending the missing down payment and offering competitive rates – up to 20 per cent for bigger homes and/or 45 per cent cheaper monthly payments. “What we saw was that you can do better, because this whole idea of four-and-a-half times income seems a bit arbitrary,” Toader explained, challenging the established view that the borrower should either have a big deposit or face higher interest rates. Toader and co-founder Stefan Adrian Boronea decided to leverage technology to help them achieve their objective and access the 200,000 borrowers they say are regularly denied a mortgage. “We took a data science approach and saw that we can somewhat forecast how house prices are going to evolve. We can analyse a lot more and remove a lot of the risk. “We punch up all this data about historical price transactions, around 150 factors – 50 around property transactions and 100 about the area.” These are known factors that people tend to look at when buying a house, including information about local schools, crime rates, and transport links, as well as local amenities and leisure facilities. He added, “We take that information and use that to kind of due diligence the house because

we believe this house will be worth more. So that’s why we can comfortably lend at 95 per cent – and hopefully 100 per cent.” Toader was critical of regulators and the government, believing they were holding the company back. “I think the FCA and the system need to change a bit because the limitations seem to be somewhat at odds with reality. “You can’t limit people to borrowing four-and-a-half times [their] income to buy an asset that is worth twice that because that automatically implies you want everyone else to have £200,000 stashed away somewhere when they’re in their 30s – and I don’t know how many people you know who have that, but I don’t [know many],” he added wryly. With the cost-of-living crisis, firsttime buyers may well find it even harder to secure a loan from highstreet lenders, a point not wasted on Toader, who urged the government to do more to address the issue. On Boris Johnson’s muchpublicised right-to-buy proposals, Toader reserved judgment (“it’s not a clear plan”), but was far more dismissive of the ‘bank of mum and dad,’ the increasingly common ‘lender’ of last resort for so many borrowers, which accounted for more than half of home purchases among the under-35s in 2020, according to a study by Legal & General. “I always tell people it’s not a solution,” he said. “The system needs a paradigm shift because unless we fill that gap, we are going to be the bank of mum and dad for the next generation. And if we can’t get a home, how are we going to help them get one in 20 years’ time?” M I www.mortgageintroducer.com

INTERVIEW

WORK PLACEMENT

How to introduce young blood into the mortgage sector Work placement programmes create ideal opportunities for employment in the industry, expert says

ork placement programmes are an ideal opportunity to attract the brightest and best candidates to the mortgage industry while creating a potential source of future employment, group director of people – development at Brightstar Group, Clare Jupp, has said. Speaking to Mortgage Introducer following the launch of the financial service firm’s Young Learners Summer Work Placement programme, Jupp said young people were “crying out for opportunities” to get into the workplace. She said, “We’re trying to encourage more young people into financial services to make it more diverse and attract more people to what is a great industry.” The firm will be hosting a group of 11 young people – six males and five females - ranging from year 11 students through to undergraduates at both its Billericay and London offices throughout the summer months. The aim is to encourage them to take up a career in financial services and introduce “much-needed” young blood to the sector. Jupp revealed that young people are sometimes put off by common misconceptions about mortgages being “boring.” She said, “I don’t think they realise that there’s so many different aspects to our business, when you think about marketing, business, development, finance and people development, and that’s one of the things we’re trying to show in our programme.” She added that the industry also suffered from having a stereotypical image as “something that men go into.” She said, “I feel passionate about this, as we’re also trying to attract more www.mortgageintroducer.com

young women into the industry, so it makes sense to start with young people.” Having formalised strong links with local schools, Brightstar is also partnering with one specific school on its BTEC business course to provide motivational talks, taster and mock interview days, as well as reallife experiences in an office setting, which will include such study units as entrepreneurialism, graphic design, social media, and IT. The long-running programme has a proven track record. Its own group chief operating officer, William Lloyd Hayward, was once a trainee, beginning at Brightstar as its very first administrator. According to the company, there are “countless” other cases of team members who have trained to become mortgage advisors and brokers, or who have moved into other areas of the business, such as finance and executive PA roles. There are also currently four members of the team who had previously completed a work experience placement with the firm. Jupp said the Young Learners programme had now become more structured, having recruited the students by attending careers fairs and creating school partnerships. Nonetheless, she believed more could be done to focus the school curriculum on practical work-placement schemes. “Some schools are doing it a bit better than others, but I think for some it’s still a bit piecemeal, maybe because the curriculum has got so much to include, but I don’t think that young people necessarily have the opportunity to have an interview experience.” For Jupp, applying for an imaginary job by putting together a

Clare Jupp

letter of application and a CV before setting up a mock interview with managers “is absolutely priceless” for anybody thinking of venturing into the job market. To make the point, she cited one person who was struggling with her A levels but who enjoyed her experience so much during last year’s work experience programme that she decided to take up a job at the firm and is now preparing her industry qualifications. From Brightstar’s perspective, having four members of its team who were originally on work experience placements and are now working for the firm is ample proof of the programme’s success, she said. “It could be a source of potential future employment. Obviously, it’s good for the business in terms of our social responsibility, which we take seriously, but I also think it’s a brilliant professional development opportunity for team members. “If we could get people to engage in these kinds of things a bit more, it would give financial services an opportunity to recruit some brilliant people, because it’s not something anybody necessarily thinks about when they’re at school.” M I JULY 2022 MORTGAGE INTRODUCER

LOAN INTRODUCER

SECOND CHARGE

Debt consolidation can improve credit score Matt Meecham chief digital officer, Evolution Money

or borrowers in both the first- and second-charge mortgage markets, the need to present themselves in the best possible financial light has never been greater. The increased cost of living, coupled with rising interest rates, have put affordability centre stage – but it’s also important we not forget. Alongside affordability, applicants’ creditworthiness forms a vital part of their financial profile and, as such, can be the key to unlocking the best products and rates. Just one missed payment on a mobile telephone bill can negatively affect borrowers’ credit scores and stay on their credit report for six years, and the more unsecured debt a borrower has, the more potential there is to miss a payment – something that doesn’t bode well in the current climate. The latest money and credit figures from the Bank of England show borrowers are increasingly turning to unsecured debt. Individuals borrowed an additional £1.4bn in consumer credit in April this year, following £1.3bn of borrowing in March. This is the third consecutive month in which borrowing has been higher than the 12-month pre-pandemic average, up to February 2020, of £1bn. The additional borrowing in April of consumer credit was split between £0.7bn on credit cards and £0.7bn through other forms of consumer credit – such as car dealership finance and personal loans. The annual growth rate for all consumer credit increased to 5.7 per cent in April from 5.2 per cent in March – the highest rate since February 2020. The annual growth rate of credit card

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SECOND CHARGE borrowing was 11.6 per cent – the highest since November 2005 – and other forms of consumer credit went to 3.4 per cent, the highest since March 2020. This is a huge amount of credit, and there is already evidence that some borrowers are struggling to manage their payments. Digital wealth manager Moneyfarm recently interviewed over 1,500 UK adults and found 31 per cent have struggled or failed to meet an essential financial commitment such as rent, mortgage, bills, loans, or a credit card payment in the last six months. Its findings show 70 per cent of the nation currently carries some form of debt on a credit card or personal loan, with 35- to 50-year-old men holding the most – approximately £3,700. Furthermore, 25 per cent of those questioned had failed a hard credit check in the last six months when applying for a new product. When it come to a borrower’s credit score, one of the best ways to maintain a good one is not to miss a credit, loan, or mortgage payment – something that becomes inherently harder the more lines of credit one has. Taking out multiple loans and credit cards – especially in a short space of time – is not a good look when it comes to how an applicant is perceived by a credit agency, as it gives the impression they might be overreliant on credit. Even if a borrower is just applying for a small amount of credit, each application will leave an imprint on that borrower’s credit file. Borrowers may not be aware of their credit score or the damage that missing a payment or taking out a lot of credit has done. A bad credit score could not only prohibit borrowers from taking out a financial product, but also cause them to pay a higher rate. Consolidating their debt and making their payments on time could improve their score if they have a history of missed payments. A lot of borrowers’ finances have changed as a result of COVID, and for those with numerous credit cards and loans, debt consolidation could be a good longterm solution. While taking on more credit might offer a short-term fix to a borrower’s financial trouble, using a second-charge to consolidate their debt into one manageable payment could improve their long-term outlook and their credit score. We are seeing continued demand for debt consolidation. Our latest second-charge tracker shows that between March and May this year, debt consolidation borrowers accounted for 69 per cent of our business by volume and 60 per cent by value. COVID has already had a negative impact on the finances of many borrowers, and the rising cost of living risks doing the same. Now more than ever it is worth exploring debt consolidation options for those with multiple unsecured debts and, where possible, looking to boost their credit score by consolidating some of this debt. M I References: Money and Credit - April 2022 | Bank of England www.mortgageintroducer.com

JULY 2022 MORTGAGE INTRODUCER

LOAN INTRODUCER

SECOND CHARGE

Too-easy credit could be the next lending scandal Tony Marshall MD, Equifinance

ccording to a BBC report for Panorama, an estimated 15 million adults of all ages in the UK are actively using Buy Now, Pay Later (BNPL) facilities, an increase of more than two million since the start of the year. Also, research by Equifax suggests about 30 per cent of those are 20-to-30-year-olds. For those people who keep up payments on schedule, BNPL can be a very convenient way to spread the cost of purchases without incurring any charges. However, the dangers of BNPL lie just below the surface and come in three ways. The first trap is not repaying the capital borrowed within the short interest-free period; secondly, if an option to extend the repayment period is taken up, interest charged can be north of 40 per cent or more in some cases. Also, some lenders may pass unpaid debts on to debt-collection agencies. Lastly, from the beginning of this month, BNPL borrowers with Swedish financial company Klarna, the leading BNPL provider in the UK, started sharing customer data with two credit agencies, Equifax and TransUnion, meaning all creditors and lenders will be able to see these debts when conducting formal checks on potential borrowers for mortgages and other finance. This could have particular significance for would-be borrowers looking for mortgages, remortgages, or secondcharge loans who have outstanding BNPL loans, as their borrowing will be taken into account for credit and affordability purposes. However, the bigger issue is highlighted by a Citizens Advice survey

MORTGAGE INTRODUCER JULY 2022

of 2,288 people who had used BNPL during the past 12 months. It found that while 52 per cent made repayments from their current account, 23 per cent were using a credit card, nine per cent a bank overdraft, and seven per cent were borrowing from friends and family. With the growth of the sector, these figures can only get worse as more people struggle to make repayments. It is clear that if the growth of BNPL continues unchecked, we are looking at the potential for a massive growth in indebtedness among those least equipped to cope with the consequences. The FCA is consulting on how best to regulate the sector, but the number of people already opting for what seems an easy way to spread out payments with no interest charges means that it might be too little, too late. What effect will this have on the second-charge market? As debt consolidation is a major staple in our sector, we can expect to see more cases from those fortunate enough to have a residence on which they can raise funding. However, along with further advances or remortgages, the increasing pressure to consolidate debt does not mean that lenders can afford to compromise on underwriting

standards. Given the rises in the cost of living, along with the extra pressure of making repayments on existing credit, customers are going to find it more difficult to keep ahead. Now more than ever, our responsibility as lenders is to approve second-charge loans when we’re confident that by doing so we are not simply pushing the debt issue down the road. I have always believed that the second-charge sector plays a vital role in helping customers get back on their feet, but even though a secondcharge debt consolidation loan can significantly reduce monthly outgoings and be thepositive catalyst for a better financial future for many, it still doesn’t receive the positive attention it should. What BNPL is forcing us to consider is whether ‘easy’ borrowing, no matter how well packaged, can ever be launched without regulatory oversight from the beginning. Whilst I have always been a supporter of a free market economy, it is clear that where personal finance is concerned, especially borrowing, we need to make sure that borrowing of any kind is subject to the same checks and balances, whether for a mortgage or a short-term finance deal like BNPL. M I www.mortgageintroducer.com

SPECIALIST FINANCE INTRODUCER

EQUITY RELEASE

What equity release can really mean Stuart Wilson CEO, Air Group

or a number of years, I have talked about the UK equity release market in terms of multiple billions of lending. This was before one might also have added in the wider laterlife lending sector and what it might be able to achieve, specifically with the introduction of RIO mortgages and more mainstream offerings with higher maximum ages. While I would not say I was laughed at, there was certainly a degree of scepticism about my assessment. Of course, the critics said I was always going to over-value the sector because my business was immersed in it; I was bound to talk it up when the reality was this would always be a very small, niche marketplace that was essentially a last resort. For some people, that assessment remains, and if you look at equity release/later-life lending in the context of the wider residential marketplace, then of course it is still looking like a very small piece of the puzzle. But it is growing, and is going to continue to grow, and that bears thinking about if you’re an adviser not currently involved in it. You only have to understand that the fundamentals I have always believed were there to induce greater levels of activity are not just still in existence, but are increasing in relevance every day. The latest figures from the Equity Release Council show lending for the first quarter of 2022 at £1.53bn; lest we forget, until very recently the sector would have been overjoyed to have secured that level of business in a year, let alone in a three-month period. The number of new plans agreed in the same quarter were up 21 per cent on the same period a year ago, while we also saw a new quarterly high of www.mortgageintroducer.com

23,395 new or returning equity release customers within the same timeframe. Again, many of us later-life stakeholders have been around long enough to consider those numbers a good yearly performance, so it will not take much to consider just how far we have come in such a short space of time. That quarterly figure puts us on a yearly run-rate of over £6bn for 2022, and again, without wanting to blow my own trumpet, go back to some opinion pieces I have written over the last couple of years, and you’ll see that I’m predicting big opportunities within the later-life space, which would take us up to and beyond that figure, toward double-digits. In my opinion, we are motoring toward this. This is, by the way, not my attempt to look like Mystic Meg or the later-life lending equivalent of Nostradamus. I am not any kind of industry soothsayer, but what I have been able to see – as many other stakeholders have also witnessed – is a changing environment that places the residential home as one of the go-to assets, if not the only one, for many older homeowners. It’s not so much a perfect storm of conditions, but more the umbrella handily available to help a growing number of homeowners to ensure they are not caught out in the rain. And in so many facets of life for older people, the chances of getting rained on have simply grown and grown. For many years, we have talked about releasing equity for a whole variety of reasons – to pay off debt, to pay for long-term care, to provide for family members and the like, but one reason we might not have realised was going to be so important was simply to pay for the cost of living. Again, it’s not something those active in the sector have overlooked. For many years, I’ve talked about pensioners sat in homes worth hundreds of thousands of pounds but still feeling unable to put their heating on throughout the winter. This gets to the very crux of being asset rich/cash poor, and as the year has

progressed this underlying need has grown in importance. 2022 will represent an incredibly difficult year for many older homeowners, particularly those already retired, with fixed incomes, wondering just how they will pay for more expensive energy bills, let alone the increase in the cost of living evident across all manner of items, particularly petrol, but also food, clothing – you name it. With inflation likely to top 10 per cent very soon, I don’t need to point out what that means for pensioners, and you’ll already have heard many stories about the extremes some people are going to in order to stay warm and fed. Now, of course, equity release or laterlife lending is not going to be suitable for everyone, but I guarantee it will be suitable for some, and it may well be suitable for those most in need. This, I’m afraid, is not a problem that is likely to go away anytime soon, either. The government has said it can only do so much; the Bank of England the same. However, what we might have is a significant number of consumers who will have benefited from increased house values, particularly over the last year, but probably over a much longer period. Many may be unencumbered and therefore may be in the right position to access equity without it having the impact they think it might in terms of inheritance amounts or of what equity they may well need to ‘give up.’ Overall, our sector is there to help people in such situations – to make use of a sizeable asset that, used correctly, can make their lives much easier, or simply allow them to do what they want in their later years. Whether it is to go on a cruise, or simply pay their bills, the option is available to do this, and as a sector we have to continue to espouse this message, to assuage any concerns, and to deliver the readily available solution that will help many, and ensure continued growth for this vitally important market. M I JULY 2022 MORTGAGE INTRODUCER

SPECIALIST FINANCE INTRODUCER

FIBA

A future in specialist property finance Adam Tyler executive chairman, FIBA Ltd

s we all are affected by the cost-of-living crisis sweeping across the UK and the rest of the world, we have seen many lines in the national press dedicated to the fragile state of the economy. But what about the commercial lending space? How is this going to react for the remainder of 2022 and into 2023? We all know about the record numbers delivered over the last two years both from brokers and lenders in specialist property finance. This regards not only enquiry levels, but completions in bridging, buy-to-let, development, and commercial property finance from a number of different lenders. There have been a number of new additions to the lender community, and this continues. We have also lost some, a few more noticeable than others, but the capacity is there and available to cope with future opportunities. But what can we expect from the specialist property finance market

MORTGAGE INTRODUCER JULY 2022

for the remainder of the year and into the first half of the next? The lender community is well funded; there is still confidence from the capital markets in the sector. The ongoing situation will, of course, be determined by the market – the need for housing must remain strong to fuel the need for short-term and development finance. The much talked-about repurposing of retail units to other uses is still a factor despite the return to offices, albeit still mainly in the private sector. All of this will depend on the confidence of our property investors, some of whom have in recent times built good portfolios both in residential and commercial real estate. There is the very real threat of a full quarter of negative growth in the economy, and we all know what that would mean. Whilst this may not be too damning for our sector directly, it has other connotations within the mindset of the buying public. This in turn could be self-perpetuating, so nurturing and caring for our clients is even more important. Whilst we have all the components in place and at FIBA, we are adding to this through the expansion of the specialist property finance club and

the education programme. However, questions remain: How is the market going to perform for the next 12 months and beyond? What will our market look like, and is there enough business for the growing number of brokers, packagers, and lenders already operating in the specialist property finance market? Just a few facts to consider: In Q1 2022, £14.5bn of commercial property was traded; this was down 19 per cent from an exceptionally strong Q4 2021, which means the rolling annual total hit its highest level since Q4 2018 at £60bn. The UK Construction Index declined in April from the previous month. It is still indicative of strong growth in the building sector, but the rate has definitely slowed over the period. Of course, a continuing rise in material costs, an uptick in credit policies, and global supply-chain problems are among some of the downward pressures that may affect future demand. These are just a few highlights that must be taken in the right context and against a backdrop of negative global economic drivers that seem to be unrelenting – as one seems to end, we are faced with the next. One thus has to admire the resilience and tenacity that have been shown in the maintenance and building of a thriving specialist market against an unprecedented backdrop. In conclusion, there is a great market for specialist property finance, with a number of positive factors for the broker market to consider. Brokers and lenders will still require innovation and knowledge to shape the right deal for the right project within the right property for the customer. But this is how our industry has adapted and grown over the last 25 years – and it will continue to do in the future. M I www.mortgageintroducer.com

Mortgage Introducer July 2022

Articles inside

Specialist Finance Introducer

Loan Introducer

Interview: Proportunity

Interview: Brightstar Group

Interview: Climate X

Cover: Mortgage product withdrawals

Equity release review

Protection review

General Insurance review

Conveyancing review

Market review

Technology review

Buy-to-let review

Recruitment review

London review