Mortgage Introducer August 2020

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INTRODUCER www.mortgageintroducer.com

August 2020

 Robert Sinclair  The Outlaw  Later life round-table

STAMPING OUT ILLICIT LEAD GENERATION Our panel looks at how the market is& adapting Key takes a personal honest during the COVID-19 crisis

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EDITORIAL

COMMENT Publishing Director Robyn Hall Robyn@mortgageintroducer.com Publishing Editor Ryan Fowler Ryan@mortgageintroducer.com Associate Editor Jessica Bird Jessicab@sfintroducer.com

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Almost normal

I

f you squint a little you could be forgiven for thinking that normality has somewhat returned at last in the UK. For the mortgage market there is anecdotal evidence that business levels are as strong, if not stronger than, before the pandemic.

However, swathes of the market are yet to experience that recovery.

The second charge mortgage market saw new business levels decrease by 71% in June, according to the Finance and Leasing Association (FLA).

The market for first-time buyer mortgages is still stagnant.

Products available at high loanto-values (LTVs) are down 95% on pre-crisis levels, and there is little sign of a return to mortgage lenders being willing to offer deals at high LTVs. There were 391 products available at 95% LTV at the start of March.

By the end of July, in comparison, there were just 20 products available, only four of which were standard 2-year fixed-rate mortgages.

It’s clear that there is still a log way to go until we hit any level of normality.

With the economy set to take longer than expected to recover following the pandemic, the Bank of England (BoE) has warned that rising unemployment and other issues – such Brexit and a potential second wave of infections – all pose possible risks.

GDP is projected to shrink by 9.5% this year, its worst slump in 99 years.

However, that is still less severe than the 14% slump predicted in May, which would have been the worst crash in 300 years.

A slower recovery looks increasingly likely, and it’s down to evryone to make sure that they come out of the other side in the best possible position.

It may be that we are in the eye of storm and that’s why everything seems calm for now.

Here’s hoping that isn’t the case, and that the BoE’s predictions turn out to be wrong. There’s still a way to go.

Hopefully we’ll all get there together and intact. M I

Your home for specialist lending 01966 (1)

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AUGUST 2020

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MAGAZINE

WHAT’S INSIDE

Contents 7 9 10 9 13 14 16 17 18 23 28 31 32 35 37

AMI Review IMLA Review Lending Review Market Review Advice Review High Net Worth Review Networks Review First-time Buyer Review Buy-to-let Review Protection Review General Insurance Review Technology Review Equity Release Review Conveyancing Review Education Review

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PROTECTION

40 The Outlaw The latest from our resident outlaw

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42 Cover: Stamping out bad practice Natalie Thomas looks at the rise of illicit lead generation firms and what the market can do to protect consumers from such businesses

THE OUTLAW

48 Cover: Later life round- table Our panel looks at the role of later life lending in an evolving marketplace 54 Loan Introducer The latest from the second charge market 57 Specialist Finance Introducer Development finance, bridging and FIBA 62 From the frontline Supporting charities

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BUY-TO-LET

42

ILLICIT LEAD GENERATION

AUGUST 2020

48

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REVIEW

AMI

Not a sin of the past Robert Sinclair chief executive officer, AMI

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s the number of Data Subject Access Requests (DASRs) channelled through lawyers and claims managers to intermediary firms, where the consumer had an interest-only mortgage, sails towards 5,000 there are huge impacts on firms.

These fishing expeditions to see what is on file are very different to the historic PPI market. There the DSARs fell on lenders who self-insure and pay from income. With mortgage intermediaries, the DSARs indicates the likelihood of complaint or legal

action therefore requires the firm to inform their Professional Indemnity (PI) insurer who may well require the response to be reviewed by their lawyers. This incurs a cost on day one as the legal fees will fall under the policy excess. So, a small firm receiving 10 of these could have costs of circa £20k without anything substantive to defend. This is a direct hit to profit.

We would expect the professional firms working on these, whether solicitors or FCA regulated CMCs, to be more sensitive to this than they appear.

We hope that they are only working on genuine cases of consumer complaint and not being generated by promotional work promising free money.

AMI is working with member firms on these cases as they develop and any firm receiving a request should speak to

their PI insurer first. Of more concern is that we are hearing that some mortgage holders have entered into agreements which finance the work being done on their behalf and that it is difficult to exit these agreements. In that most of these mortgages will have been properly sold, that is a real concern. As many of these cases could be time-barred that will leave these consumers with the costs.

Also, this is a product well reviewed by the FSA and FCA and still on sale.

Consumers have been getting public warnings on the product and notes from lenders on the need to talk to them.

This is also a product where if the customer wants to reduce the capital they can usually over-pay within the terms of the contract. I still struggle to see the loss most of these consumers have unless they have been cash rich and not borrowing other money. M I

Regulator on a mission

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s this unique year sees an August spike in interest in housing and mortgages, our friends at the FCA also appear to be returning to business as usual.

Having had seven days to respond to a consultation on how we should deal with people coming to the end of payment deferral, we have had four weeks to prepare our response to amendments to the deadlines for the Certification Regime and Conduct Rules.

There are also a series of other consultations all falling due in the next few weeks, one of which covers intra group switching without affordability assessments and assistance to those with interest only loans coming to end of their term.

There are also consultations on how FCA manages complaints on its own conduct and a Treasury paper on the approval of third party financial promotions.

In addition, there are deferred consultations on operational resilience, Open Finance and encouraging switching for those on a SVR. On top of this there is the significant guidance consultation on consumer vulnerability.

This is a huge regulatory agenda which was pushed back as COVID struck, but now

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appears to be back on the rails. It is normal for the agenda to go on hold over the holiday period, but this year it is escalating.

In addition to these consultations, the FCA has told firms that they have been given enough relief and should now be fully operational and therefore able to deal with all complaints within standard rules and timescales.

It has also issued all firms with a survey to assess the impact of COVID on their financial resilience. This was issued under their FSMA Section 165 powers which makes failure to complete accurately a serious offence.

As firms struggle to meet heavy consumer demand at the same time as complying with social distancing rules and many still working from home, the pressure on firms continue to grow. Meanwhile the regulator has announced a change in the way it regulates.

Shortly after I arrived at this trade body we had the FSA move to a more principles-based regime away from the previous rules-based approach. It was not long after however that it launched its new broom of treating customers fairly and the six tenets of process and product delivery.

Then for the last three years we have had a move to the “culture of a firm and its people” being the main driver. In the last few weeks we have had a subtle announcement in a letter to firms, which most have not seen, of the goalposts being moved to an outcomes-based approach.

It was interesting to see the minutes of the FCA Board on 25 June that reported, “the Board discussed the impact on staff of the COVID-related work and agreed to consider at a future meeting how best to recognise the additional burden borne by many.

In addition, the Board recognised the need to ensure that those whose personal circumstances militated against them working as effectively as normal continued to be recognised and included.”

This is at the same time as FCA guidance means our lender partners are not allowed to pay cash bonuses to their staff or dividends to their investors.

It is good that they are managing their own resources, but they need to consider the impact of their multiple actions on firms who are trying to ensure they can continue to service customer needs.

AUGUST 2020 MORTGAGE INTRODUCER

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REVIEW

IMLA

Navigating the road to market recovery Kate Davies executive director, Intermediary Mortgage Lenders Association (IMLA)

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he last time I put pen to paper for Mortgage Introducer (May 2020), I suggested there was room for optimism about the longer-term outlook for the mortgage market after the coronavirus crisis.

We cannot be sure how the next few months will play out, and there will undoubtedly be challenges ahead for lenders and intermediaries.

However, some positive signs are starting to emerge. Pent-up demand from buyers has already been returning to the market, and as lockdown measures are relaxed and life starts returning to some degree of normal, we may see lenders starting to broaden their product offerings again.

MANAGING DEMAND

It would be an understatement to say the crisis has been unpredictable in its impact on the mortgage market.

However, lenders have shown before now that they are resilient in the face of crisis.

Existing customer demand for support on payment deferral is still high, despite the immediate urgency starting to settle down.

The next big hurdle for lenders will be working with customers to get back on track with regular payments, as these payment deferrals, and the furlough scheme, come to an end.

One positive sign to come from the market’s reopening is the clear appetite from first-time buyers to press ahead with plans to purchase. However, this has produced its own challenges.

While there has been particularly high demand for higher loan-to-value (LTV) mortgages, lenders have had to www.mortgageintroducer.com

take difficult decisions to temporarily withdraw their high loan-to-value products in order to manage demand and ensure they can continue to meet service levels, thereby protecting their existing customers.

Some have also cited their duty to protect new purchasers by ensuring they do not fall into negative equity as the reason for temporary withdrawal of high LTV products.

These products also take more time to underwrite than lower LTV ones, with lenders needing to scrutinise applicants’ income and expenditure more rigorously.

Some forecasters are predicting that property prices will fall in certain areas, and the risk of falling into negative equity is higher for first-time buyers with smaller deposits at the beginning of a mortgage term.

Under normal circumstances, that isn’t as much of an issue given that new buyers will not look be looking to sell for a few years – but the impact of COVID-19 on job security may leave some unable to meet their mortgage repayments and obliged to sell.

However, lenders remain keen to support first-time buyers and will look to offer high LTVs when sufficiently confident about the prospects for house prices and job stability.

GOVERNMENT IN THE DRIVING SEAT

The government’s latest changes to planning regulation, announced towards the end of June, will go some way to helping developers and commercial landlords create new homes to meet demand.

There are a huge number of commercial properties in the UK that have been sitting vacant for years in areas where there is a housing shortfall.

This number is only likely to increase, with more businesses working remotely or downsizing office spaces.

It makes complete sense that landlords and developers should be able to adapt some of these properties into homes, where they are suitable and where there is demand.

However, any adaptations need to be of a high standard, as well as being sustainable for the long-term, particularly if they are to be acceptable to mortgage lenders.

The Chancellor’s announcement of a new stamp duty ‘holiday’ on the first £500,000 of property purchase values is good news for homebuyers looking to downsize but deterred by moving costs.

The Prime Minister’s pledge to ‘build, build, build’ also feels like a good step in the right direction – but the government needs to consider the bigger picture if it’s going to get the mortgage market firing on all cylinders in the wake of the crisis.

The government has also implemented an extension on the Help to Buy equity loan scheme: lenders, developers and buyers have been keen to see an extension to the first phase of the scheme, which is due to change in 2021 to be exclusively accessible for first-time buyers.

The crisis has caused unprecedented delays to the development of new properties; it is only fair that builders should have more time to get back on track and meet the demand they were initially preparing for.

The ongoing impacts of coronavirus and the efforts to drive the UK’s economic recovery will be at the forefront of the government’s priority list over the coming months.

However, as recent reports from UK Finance (Financing Climate Action with Positive Social Impact) and the Affordable Housing Commission (Making Housing Affordable after COVID-19) have observed, now is absolutely the time to grab the opportunity to rebuild an economy that improves on what we had before the crisis – and one which works to better serve people from all walks of life, across all forms of housing tenure.

It’s an ambitious and visionary strategy – but one which could go a long way towards serving the changing needs of the population in the wake of the crisis. M I AUGUST 2020 MORTGAGE INTRODUCER

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REVIEW

LENDING

The need for good, professional advice David Lownds head of marketing and business development, Hanley Economic Building Society

L

ast month I referred to Rightmove’s sensible decision to temporarily halt its monthly house price index, as statistics on the number of properties coming to market, new seller asking prices, and new sales agreed were rendered meaningless over lockdown.

Well, fast forward a few weeks and housing indices, reports and surveys are back with a vengeance. And who am I to ignore them?

However, when we see headlines such as ‘mini-boom’ it does send a little shiver down my spine. Going from a ‘closing’ of the market to a ‘mini-boom’ may sound great on paper, but the emphasis on extremes is not ideal for the housing or mortgage market when it comes to consumer perception.

We are in the midst of a rebuilding programme, and hyperbole doesn’t really have a place when so many people are still struggling to get their lives back on track.

ASKING PRICES

The phrase ‘mini-boom’ emerged from the latest Rightmove figures, which outlined that the average asking price of property coming to market in Britain hit a new record high in July.

The data showed that asking prices were 2.4% higher than in March and 3.7% higher than in July 2019.

The previous report could only refer to English prices, but Rightmove says there is now sufficient new seller asking price data for Scotland and Wales to restart its national index, and the new all-time high follows on from March’s £312,625 record in the busy market before lockdown.

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Figures from the property portal also showed that year-on-year buyer enquiries were up 75% in Britain since the start of July.

The number of properties coming to market rose by 11.1% in July compared to a year ago, despite Scotland and Wales not contributing for the full period, while 44% of new listings that came up for sale in the first month after the English market reopened on 13 May have already been marked as sale agreed, compared to 34% over the same period last year. The number of monthly sales agreed was up 15% in England, and in the five days after the stamp duty announcement it rose by 35% year-on-year.

Momentum, activity and demand are all great, especially when the housing and mortgage market has experienced such lows. However, we must maintain some degree of perspective and not generate a media frenzy which could artificially inflate the market over the short-term and leave a greater number of first-time buyers on the sidelines over the medium to longer term.

With many lenders still holding back from higher loan-to-value (LTV) lending, affordability issues will inevitably continue to come into play.

ACTIVITY AND LTV

These sentiments are highlighted in research from Trussle, showing a 182% increase in first-time buyer mortgage applications and a 176% increase in next-time buyer applications over the last two months, compared to the two months previous. However, the volume of first-time buyers being declined due to needing high-LTV products was seven times higher.

Mortgage applications for a property of up to £500,000 increased by 40% when comparing H1 2019 and H1 2020. 64% of Trussle’s mortgage enquiries over the past month were said to have been for properties less or equal

MORTGAGE INTRODUCER AUGUST 2020

to £500,000, suggesting that a large proportion of the housing market will benefit from recent stamp duty reforms.

Again, it would be remiss not to highlight just how positive this increase in applications and general demand for mortgage borrowing is.

There is further good news when it comes to higher LTVs, as Nationwide Building Society has increased the lending limit for first-time buyers following the government’s temporary changes to stamp duty regulations. It is currently offering 90% LTV mortgages for these buyers, with no set limit on the number of home loans available.

As always, it’s great to see building societies leading the way. With a number of flexible options available through a variety of propositions, building societies remain an integral component within the wider lending community, and will continue to be innovative and adaptable in meeting the changing needs of borrowers.

ONGOING CHALLENGES

The UK housing market has proven reassuringly robust, and the mortgage market has coped admirably in some hugely testing times.

Nevertheless, there are still many lingering challenges to overcome, as outlined by online broker forum cherryplc.co.uk.

The research found that almost half (45%) of intermediaries are currently finding it difficult to place cases involving the self-employed.

This was followed by high LTV cases (34%), cases where the applicant was on furlough (12%) and cases where the applicant had taken a mortgage payment holiday (5%).

‘Other’ made up the final 4%, with respondents highlighting adverse and buy-to-let houses of multiple occupancy (HMOs).

These figures illustrate the different facets of the current lending climate and how important building societies and specialist lenders are when it comes to meeting shifting borrowing requirements. They also highlight the need for good, professional advice, especially for those borrowers whose circumstances many have changed over the past few months. M I www.mortgageintroducer.com

REVIEW

MARKET

Escaping to the country Craig Middleton head of mortgage sales and distribution, Harpenden Building Society

M

uch has changed during this pandemic – not least considering where to put down roots and make a new home as we emerge from these unprecedented times. Escaping to the country has never been more appealing.

City living pre-COVID was highly desirable, and demand will no doubt return. For those cooped up in small residences with little outdoor space, however, the last few months have been testing.

With home working becoming the new norm, how important will it be to live within easy commute of the office?

The probable answer is ‘less so’.

We have never been more connected thanks to developments in technology, and apps like Skype and Microsoft Teams are of course part of everyday life now.

INTEREST IN RURAL LIVING

According to a recent survey conducted by property company Savill’s, nearly 700 prospective buyers and sellers in lockdown showed a considerable desire for space and a greater emphasis on the outdoors.

Around four in 10 said they found the idea of living in a village more appealing than previously, while 54% of those with children at school said a countryside location was more attractive now than before COVID-19.

If estate agents are seeing this, those of us supplying mortgages to this market will soon get the call.

The interest in rural living is definitely increasing, and the mortgage industry needs to be ready to meet the added demand.

At Harpenden Building Society this has definitely been our experience – mortgage enquiries have risen by 80% compared to the previous month, with www.mortgageintroducer.com

a rising interest in rural properties forming a part of it.

COULD A COUNTRY PROPERTY BECOME THE NEW ‘NORM’?

As well as statistical analysis, we also talk to our communities to gain a feel for the market. From our head office in Hertfordshire, we speak with those around us to gain a wider perspective of the current situation.

Dan Collins is the owner of a boutique barn conversion in the village of Green Tye, also located in Hertfordshire. Rentals for this AirBnB located in its tranquil, rural setting have soared during lockdown and are remaining consistent.

Based on conversations with guests, Dan believes that a trend is developing for city dwellers to sample rural living before making the decision to move to the country permanently: “Those who rent the barn often bring up the same conversation.

Many are considering buying a main residence in the countryside, basically to escape crowded urban areas.

The fear of catching COVID-19, and avoiding pollution, has been a real driver in recent times. It makes sense, particularly for an affluent demographic, why wouldn’t you?

Dan Collins outside his boutique barn conversion

“Guests are sometimes surprised at the high-end finish and facilities offered in properties out here, something commonplace in city living but not always associated with a rural lifestyle.

“As well as the added benefits of outdoor pursuits, the luxuries in life are also possible. In addition to the features you’d expect with a recent barn conversion – such as multiple living spaces, modern appliances, a wood burner, beams and high ceilings – we also have a gym, cinema room, several bathrooms and a full size snooker table to name just some of what’s on offer.

“With the lower costs of land, a larger plot also affords features like an outdoor swimming pool and hot tub. These are all options more commonly seen now in rural living. Superfast broadband even arrived here a few years ago!

“Those living in the countryside can recharge their batteries away from the city, but quickly return if they need to, avoiding the likely pandemic hotspots.”

CHOOSING THE RIGHT LENDER

A significant change in lifestyle can be challenging, so getting the right mortgage in place is important. As a specialist lender we are highly experienced in a range of niche areas including self-build, later life, guarantor, self-employed and contractor lending.

We manually assess all mortgage applications, as we realise that people have increasingly complex methods through which they receive income.

We want to provide a solution, not simply reject an application just because it may be more complicated than the average.

We don’t chop and change product offerings either – we’ve seen instances recently, for example, where lenders have introduced a rate and then withdrawn it hours later.

Brokers and their customers need more certainty, and to know where they stand.

Rural living is on the increase. We want to facilitate opportunities for this increasingly popular lifestyle. M I AUGUST 2020 MORTGAGE INTRODUCER

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REVIEW

ADVICE

Navigating uncharted waters needs advice Stuart Miller customer director, Newcastle Building Society

I

wrote in a recent article about the need for responsible lending, and how by working together we will get back to some sense of normality. Few would disagree with the validity of this approach.

We have to act in a customer’s best interests, ensuring affordability, transparency of terms and conditions, and supporting a borrower if and when they experience repayment difficulties.

The above definition concerns the treatment of all borrowers but, of course, not all borrowers have been affected in the same way by this challenging experience.

The COVID-19 pandemic has impacted some age groups arguably more than others, not simply in terms of health matters, but also in terms of economic welfare.

BRACE FOR UNEMPLOYMENT

What’s more, we are only at the very beginning of seeing what that impact might eventually look like. As the furlough scheme is unwound, the Chancellor has warned us to brace ourselves for the rise in unemployment that will accompany it.

We are all in the midst of trying to unravel what this means for potential borrowers, but what we do know is that while borrowers may be affected differently by the pandemic, their financial and economic plights are far more interconnected.

Grandparents may not become unemployed, but their grandchildren might and the strains across the family unit will be immense for many.

Low interest rates for borrowers mean low returns for savers and www.mortgageintroducer.com

meagre gains for pension pots. The relationship between the generations of family members will play a part in determining how quickly we can emerge from this crisis.

If the strain is felt in one place it may well be passed onto another; conversely, the support of some by others may impact things like deposits.

Given our collective duty to lend responsibly, this means a more micro or even forensic approach might be a necessity for cases that were previously considered straightforward.

Understanding of periods of furlough, mortgage deferrals or periods of low earnings therefore needs to be woven into our ability to understand borrowing requirements, and the ability of borrowers to pay back the loan, moving forward.

That’s why not over-burdening borrowers is so important. As we have seen in other markets, mortgage prisoners still exist from the previous Global Financial Crisis, and we should not endeavour to create more for the sake of lending.

The back-drop is evolving. Not only can we not be sure of the scale of the economic impact just yet, but we have also had the welcome relief of the stamp duty holiday announcement. This is a broad brush that reflects the approach adopted by the Chancellor unleashing other stimuli and support packages in a bid to support the economy.

But let us not be mistaken, the biggest obvious concern will be the level of unemployment. There is a very obvious correlation between earnings and an ability to repay, and it is a factor all lenders will be watching carefully.

Inevitably, any change in circumstance regardless of what it is and when it occurs results in uncertainty – especially for borrowers who rely upon a fixed income.

Responsible lending therefore requires good advice, founded on

responsible action from lenders, and the expert instincts of advisers about what is right for a borrower not just now but also in the future.

I, for one, believe that the nation’s need and desire for advice in complex and difficult times will be greater than ever. If mortgage lending was a complex business before the pandemic, it is ten times more so now.

THE RIGHT LOANS

Manual underwriting, once a unique selling point for those that utilised it, is now something many are embracing in a bid to make sure they are making the right loans to the right people at the right time.

However, in this context, advisers are also perfectly placed to take a holistic view of a client’s finances and individual circumstances and guide them to a solution that’s right for them.

“Low interest rates for borrowers mean low returns for savers and meagre gains for pension pots.

The relationship between the generations of family members will play a part in determining how quickly we can emerge from this crisis” As the current crisis progresses, it will be crucial that lenders, trade bodies, networks and clubs continue to provide advisers with the tools and resources that they need to be able to deliver responsible lending.

Advisers are essential in safeguarding customers and identifying the correct option for their circumstances, both now and in the future.

By working together, we will be able to support brokers in their conversations with borrowers with the most appropriate products that give all concerned the peace of mind that the right decisions are being made, and ensure that our brokers can secure the outcomes that their clients deserve. M I AUGUST 2020

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REVIEW

HIGH NET WORTH

Deals during lockdown Peter Izard business development manager, Investec Private Bank

T

he past four months or so have been, to use a potentially over-used word, unprecedented, and the property market certainly bore some of the brunt for a time.

However, as with all good businesses, the wheels kept turning, with the team doing what they could to prepare for when things opened up again.

With much speculation about how the market is faring, what interest rates mean and mortgage availability, I wanted to share some deals that we’ve completed in the last couple of months to showcase the appetite for lending that is absolutely still out there.

CENTRAL LONDON PROPERTY USING MIXED INCOME PORTFOLIO

view of their balance sheet, track record and long-term earning potential.

Working closely with our credit team, we structured a 75% loan-to-value (LTV) mortgage fixed over a 5-year term, with annual capital reductions to bring the LTV to 67.5%.

PRIME CENTRAL LONDON PROPERTY PURCHASE USING COMPLEX INCOME

The second case was handled by David Knott, who was helping a broker with a HNW client whose income was generated from myriad elements, including deferred income and rental from overseas property, as well as taking some in US dollars.

The client was looking to buy a new primary residence in prime Central London, requiring a loan of £5.5m at 75% LTV. Again, working closely with our credit team we were able to take a holistic view of the both client’s and their business’ income and asset

The first case was brought in by my colleague Joe Websper, who was referred an entrepreneurial client looking to complete on the purchase of a townhouse in Central London.

As with many high net worth (HNW) clients, their balance sheet was made up of both liquid and non-liquid assets, including interests in a portfolio of commercial properties and shares in various private companies.

There were also interests in trusts and director’s loans to take into account – anything but a standard ‘vanilla’ portfolio structure.

To add to this, recent renovations of the property had caused some planning issues which required remediation at cost to the client, and one of the commercial tenants had requested a payment deferral, reducing the client’s income profile.

Despite the residential property dropping in value and the reduction in rent on the commercial property, we backed the client and took a holistic

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MORTGAGE INTRODUCER AUGUST 2020

profiles, recognising that they would come into liquidity throughout the mortgage term.

As such, we structured the mortgage in a way that allowed for monthly interest-only payments and annual capital reductions as liquidity events occurred over five years, followed by full amortisation, ensuring both the client and credit team were satisfied.

Many HNW individuals might look like they could struggle to service their debt through a traditional lens, but when you take a step back and consider their success holistically – both personally and financially – affordability is there. It just takes a more in-depth understanding of the clients and their requirements than many may be used to.

Our bankers work with credit day in, day out to get our clients the outcome to suit their requirements.

If you have a HNW client who you’d like to speak with us about, please don’t hesitate to get M I in touch.

“Many HNWIs might look like they may struggle to service their debt, but when you take a step back and consider their holistic success, affordability is there” www.mortgageintroducer.com

REVIEW

RECRUITMENT

A time for resilience Pete Gwilliam director, Virtus Search

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he unemployment rate of the United Kingdom in 2019 was 3.8%, the lowest since the mid-1970s; however, the government’s spending watchdog, the Office for Budget Responsibility (OBR), suggested the unemployment rate could more than double to 10% this summer – a level we have not seen since the mid-90s.

The three-month period from March to May saw UK GDP fall by 19.1%, and when the final figures for April to June are published, they will confirm that the UK is in a severe recession.

The last recession in the UK, caused by the Global Financial Crisis, lasted five quarters – from the second quarter of 2008 onwards. GDP fell by an estimated 7.2% over the whole period, with unemployment rising suddenly in 2009 to 7.6% (between 2000 and 2008 the unemployment rate fluctuated between 4.8 and 5.7 %). After peaking at 8.1 % in 2011, the unemployment rate gradually declined before returning to the same levels seen in the early 2000s by 2015.

In the previous recession, the Treasury started recapitalising banks by buying up shares and nationalising banks doomed to fail. In addition, it put a large sum of money into the Financial Services Compensation Scheme (FSCS) to assure savers they would not lose their money. Quantitative easing was used from 2009, and moreover the UK government revealed a Working Capital Scheme and also rolled out the Enterprise Guarantee Scheme and the Capital For Enterprise Scheme.

The Coronavirus Jobs Retention Scheme has been the most talked about part of this government’s response to COVID-19, allowing firms to put workers on leave, keeping them employed whilst the business recovers www.mortgageintroducer.com

from the disturbance. The Treasury suggests that 9.4 million workers are now covered by the government’s furlough scheme (more than a quarter of the UK workforce).

The Institute of Employment Studies (IES) has reported that an additional 1.6 million claims for benefits have been submitted since March, the fastest rise since the depression of 1929.

FURLOUGH SCHEME

The scheme initially allowed employees to receive 80% of their monthly salary up to £2,500. Originally, furloughed employees couldn’t do any work for their employer, but from 1 July they could go back to work part-time (so an employer could pay someone to work two days a week, while the furlough scheme would cover the other three days not worked). Employers that furloughed employees can also claim employers’ National Insurance (NI) payments and minimum pension contributions up until the end of July.

From 1 August, employers will have to pay National Insurance and pension contributions for their staff, and then from September, employers will have to pay 10% of furloughed employees’ salaries – rising to 20% in October.

In the first phase of the scheme until the end of June, employers can choose to top up the employee’s salary above 80%, but they are not obliged to do so.

In the subsequent phases until the end of October, employers must start to make some payments. From 31 July employers will pay employees’ NI and pension contributions, even for the hours the employee does not work.

The fact that businesses will soon be expected to contribute towards furloughed staff’s wages will sharpen the focus of what firms believe to be the right size (and cost base) into the future There are several factors that will be considered:  What is the cost to revenue ratio of the firm and how long can the firm sustain its cost base on reduced earnings opportunities?

 What problems for the performance of portfolios have mortgage payment deferrals masked, and how will the increased costs of servicing arrears (and loss provisioning) challenge operating models, especially when a number of lenders will have enjoyed one of the most benign periods for debt servicing?  How does the wider economic backdrop affect demand?  What have firms learned through the enforced period of change to working practices, and how will these considerations impact future working models and therefore headcount?

“The end of the government support schemes will be the turning or breaking point for many businesses of all sizes, and the resultant spike in unemployment will surely be a big determining factor on the housing market and lending volumes next year and beyond” We’ve already started to see the impact of big industries cutting their cloth to survive the pandemic, with 600,000 jobs lost in the first few weeks of lockdown.

What we don’t know is how much the furlough scheme being phased out will create a spike in redundancies between September and November.

The end of the government support schemes will be the turning or breaking point for many businesses of all sizes, and the resultant spike in unemployment will surely be a big determining factor on the housing market and lending volumes next year and beyond, not least because the disturbance from Brexit also looms There are no ‘oven ready’ solutions, but what is sure is businesses and individuals will need to be resilient and agile. M I AUGUST 2020 MORTGAGE INTRODUCER

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REVIEW

NETWORKS

Are you more than a one-night stand?

Shaun Almond managing director, HL Partnership

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f you plotted the COVID-19 learning curve on a graph for our industry it would be nearly vertical.

Although the conditions were different during the credit crunch 12 years ago, the industry has proven to be so much more adaptable in keeping the mortgage process going.

Clearly, advances in technology have had much to do with that success, but so has the willingness of the community to embrace new ways of doing things, such as the adoption of Zoom and Teams, along with other video conferencing apps.

Yet while we can pat ourselves on the back at how resourceful we have been, the main focus has been on new business generation and keeping our businesses afloat when cashflow has been threatened.

However vitally important this aspect is, it is easy to overlook one of the main principles of treating customers fairly (TCF), which talks about six desired outcomes for customers.

Outcome six states that “consumers should not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.”

On that basis, it could be argued that all brokers have to do is sit back and allow the responsibility for the customer’s welfare to pass to the lender at completion.

I would argue that this contradicts the core reason for being an adviser, by effectively waving customers goodbye once the procurement fee is banked.

To my mind it marks the difference between those firms that see the process as purely transactional and

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effectively a ‘one night stand’, and those that believe that a customer contact is the start of a long-term and meaningful relationship.

I believe passionately that advisers who are doing the job properly and nurturing their customer base are the most convincing argument for the human advice process being superior to the robo version.

Is there anything more transactional than a computer generated recommendation based on a limited choice of products with no real followup service?

Interestingly, apart from the superiority of a whole of market human appraisal and recommendation, do we see any real difference between the new breed of robo-adviser and firms with hundreds of ‘advisers’ whose first reaction when faced with the

“Is there anything more transactional than a computer generated recommendation based on a limited choice of products with no real follow-up?”

COVID-19 pandemic was to furlough those with the expertise and knowledge to help their existing customers, because there was no procurement fee to be earned?

Apart from the human element, in either case, how much time is actually given over to post-completion followups and review meetings to talk about protection and other plans?

Given the current circumstances, with thousands being furloughed or losing their jobs in the wake of a faltering economy, surely the burning question that needs to be asked is: are we letting existing customers down when they need us most?

For those businesses, with models solely based on procuration fee accrual with an occasional nod at post-completion customer reviews, expanding the concept of full-time pastoral care and putting a strategy in place would be expensive.

At a time when costs are under fierce scrutiny, it is probably going to end up being kicked further down the road and reviewed at another time, or never.

So, what about the thousands of customers who have gone to their lenders asking for a mortgage holiday? If those same customers had gone directly to the lender for a new mortgage or a further advance, would we not have been incensed at the lack of loyalty?

HUMAN AND HOLISTIC

Expecting a customer to come back to us if there is a procuration fee in it for us, but hoping lenders will deal with someone struggling with repayments because there is no financial value in it for us, undermines the fundamental trust our customers place on us..

The concept of a payment holiday offered by the government to mortgagees and those with other types of credit was a genuinely radical and welcome move for worried borrowers.

However, we know that many customers took the decision to have a payment holiday without understanding the implications.

Most lenders have not had the resources to offer much in the way of advice for each customer, and therefore it has been easier to just grant a payment holiday.

We know that many of those borrowers are going to regret that decision further down the road, when they come to find that their ability to obtain further credit is impacted because they took the offer of an unnecessary payment holiday.

If we cannot or will not embrace the concept of a holistic and pastoral relationship with our customers that survives the end of a transaction, then I fear for the future of the human adviser.

Not for some time perhaps, but unless we hammer home the value that a longterm relationship offers customers, our days will be truly numbered. M I www.mortgageintroducer.com

REVIEW

FIRST-TIME BUYERS

Get to grips with alternative options Adrian Moloney group sales director, One Savings Bank

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here’s been so much doom and gloom in the media recently that it’s great to finally read some good news, particularly when it comes to the number of first-time buyers looking to purchase their very first house.

Despite the impact COVID-19 has had on the rest of the housing market, it appears to have done little to dampen the enthusiasm of those looking to take their first step onto the property ladder.

According to research by Legal & General Mortgage Club, a whopping 93% of first-time buyers say they’re still considering buying a house in 2020, with the majority saying they definitely intend to buy.

More than a third said the pandemic has had no impact on their plans.

If you’ve not had much experience with shared ownership before, the scheme was launched in the late 1970s to help people unable to buy a home on the open market and get onto the property ladder.

Those buyers using the scheme get the chance to own a share of a property,

“At a time when it’s essential to kick-start the economy, first-time buyers have a crucial part to play in that recovery” usually between 25% and 75% of the value, while they pay rent on the remaining share.

As the years go by, the shared owner can buy additional shares up to 100% of the equity, something known as ‘staircasing’.

Although it’s not a widespread tenure, with around 157,000 households living in shared ownership homes in England – making up less

than 1% of all households – the supply of homes has increased substantially in recent years.

If you have a customer who is thinking about a shared ownership property, specialist lenders such as Kent Reliance for Intermediaries are perfectly placed to help.

Our common-sense approach to shared ownership lending offers flexible criteria that matches up to your customers’ needs.

FLEXIBLE LENDING

We accept applications on both purchase and remortgage, allowing customers to buy on a part-rent, partbuy basis up to a maximum of 75% LTV, and we’ll consider up to 100% of the share value on loans from £50,000 up to a maximum of £1m.

At this difficult time, it’s also worth knowing that we’ll consider furlough income, and customers can add fees to their repayments.

At a time when it’s essential to kickstart the economy – which has shrunk by nearly a quarter since February – first-time buyers have a crucial part to play in that recovery.

For those buyers who are struggling to secure the mortgage they need with a high street lender, it’s good to know there are alternative options available to help them realise their home owning dreams. M I

SHARED OWNERSHIP

However, there’s a world of difference between talking about doing something and actually doing it, and many of these buyers may experience problems when it comes to securing a mortgage.

As many lenders have cut a lot of their higher loan-to-value (LTV) mortgages, buyers now require a larger deposit to achieve the mortgage they need. In addition, although some lenders are slowly returning to this space, there’s still considerably less choice than before the crisis hit.

This may explain why buyers are looking at alternative ways of buying a house, with more than one in eight now saying they’d now consider purchasing a shared ownership property.

That number goes up to more than a fifth of buyers aged between 18 and 24. www.mortgageintroducer.com

One in eight buyers are saying they would now consider purchasing a shared ownership property

AUGUST 2020 MORTGAGE INTRODUCER

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REVIEW

BUY-TO-LET

A step in the right direction for landlords Bob Young chief executive officer, Fleet Mortgages

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ometimes you read the press around landlords and wonder what place it is coming from.

Talk, for instance, of landlords accumulating ‘war chests’ recently seems somehow faintly ridiculous, as if investors are wandering around towns hoovering up every single property available with the vast sums of money they have accumulated by whatever means.

This assumes that due diligence and research is somehow not required by landlords, because ‘as everyone knows you can’t lose’ when you invest in property, and whatever you buy you’ll end up making an absolute killing in a very short space of time.

I’ve read even more of this type of ‘analysis’ in the weeks following the government’s decision to open the stamp duty holiday to landlords and additional property owners, rather than just residential homeowners.

Of course, we are going to welcome such a move but to suggest that because of this landlords are going to buy property just for the sake of it is surely off the mark.

Indeed, as a lender active in this space, we would be somewhat wary of landlords who are only purchasing in order to save stamp duty costs.

Of course, there will be those that feel they can now bring forward a purchase in order to benefit from the temporary holiday, and why shouldn’t they? After all, from a government and tax perspective, we all know that landlords have had little to cheer about for the past five years.

Even this eight-month stamp duty change has to be taken with a healthy

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dose of realism, though – because despite some media protestations, the vast majority of landlords are not accumulating war chests.

What they are doing is sizing up the market, carrying out their normal research and crunching the numbers to ensure that the purchase works, regardless of whether they’ll get a stamp duty cut for completing before the end of March next year.

Anyone who is an existing landlord – and I count myself amongst them – will know that being active in the private rental sector is certainly not the land of milk and honey that many would have you believe.

LONG-TERM VIEW

Indeed, while there will be portfolio landlords who are able to make a fulltime living out of property investment, for the most part, landlords active today have small numbers of properties that they are holding for the long-term in order to perhaps supplement their retirement or sell at a later date in order to help their offspring.

The suggestion that these landlords are ‘making a killing’ tends to be far from the truth – indeed, most have properties which are effectively only washing their own face each month, with a small amount of profit to be made each year in order to keep the venture going.

They look after their tenants well, they do not overcharge on the rent, and they have mortgages, and the other private rented sector (PRS) costs to service, which mean this is never going to be about making vast sums in the short-term.

So, while there is no doubt that existing landlords in particular will be wondering whether now might be the time to buy, they will not be predicating that decision on the fact they can currently save some money on stamp duty.

MORTGAGE INTRODUCER AUGUST 2020

After all, the 3% surcharge still exists, properties still need to be researched, demand needs to be ascertained, the numbers need to be worked through – the list goes on. And all this at a time when the economic situation is less than stable.

What we do know, however, is that landlords considering a purchase will be working within a sector which needs the supply of property.

Indeed, it needs more landlords exactly like them, because the cumulative effect of the stamp duty surcharge, cuts to mortgage interest relief and increased costs of letting out properties, has ultimately meant a decrease in property supply – ironically at a time when demand has gone up.

Go figure on that one.

The fact that the stamp duty changes are open to landlords now is perhaps a move to try and step back a little from the landlord-bashing policies of the past, and a recognition that the PRS needs properties.

COVID-19 has perhaps highlighted how important quality housing and safe properties are, especially at a time when many people are simply not in a position to be homeowners.

Really, what governments of various hues should have been doing is encouraging more landlords into this space, whilst getting rid of the rogue minority – not making it impossible for good landlords to keep working within the PRS. In tarring the entire landlord community with the same brush, and turning them into an enemy for firsttime buyers, what they’ve actually done is the opposite.

However, let’s hope this is the first step back towards a more equal environment.

Certainly, we hope that existing (and new) landlords feel empowered to continue adding to portfolios or making their first steps.

The stamp duty changes will help, but it will not be the reason for the decision – what we hope to do is ensure that, for those who feel they can purchase, we have the mortgage options available for them to be able to do this. And advisers will clearly play a major role in that. M I www.mortgageintroducer.com

REVIEW

BUY-TO-LET

Options emerging for landlords Jeff Knight director of marketing, Foundation Home Loans

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t’s not too far a stretch of the imagination to say that the buy-tolet (BTL) market is in a different place to where it was at the start of the year.

It’s also fair to say that it’s in a different place to where it was three months ago, or even a month ago.

Will the market have shifted once again in yet another month’s time? It may well have.

Having said that, we are now thankfully operating in a far more stable marketplace which is unlikely to experience the wild swings of the past few months.

Although it’s foolish to never say never, after carefully navigating our way through the most extenuating of circumstances, we can now look forward with a sustained degree of optimism, and a sense of pride when we consider the way that the BTL sector bounced back so quickly.

This is testament to both its resilience and its importance within the wider housing market.

As it currently stands, we’re seeing strong demand from intermediaries with a variety of landlord clients looking to tap into the strength being exhibited by the housing market.

When you see calls to action such as ‘portfolio landlords should invest now’ from BTL specialists like Mortgage for Business, it highlights the confidence in the sector and the opportunities on offer, and demonstrates how lenders have managed to position themselves to service these demands where possible.

INVESTMENT WAR CHESTS

To offer a little background, analysis carried out by Mortgages for Business, based on data from April and May, found that landlords who were engaged in the remortgage process www.mortgageintroducer.com

were primarily doing so to build an investment ‘war chest’.

The research found that 30% of property investors were taking out a buy-to-let remortgage with a view to expanding their portfolio and growing their cash reserves.

In comparison, at the same time in 2019, landlords were more interested in guarding against risk.

This raising of capital was further illustrated in research from Paragon Bank, which showed that landlords raising capital had contributed to an increase in the number of buy-to-let remortgages in the second quarter of the year.

Mortgage intermediaries indicated that remortgages accounted for 60% of BTL cases in Q2 2020, up from 48% in the previous quarter, as new lending for house purchase fell as a result of the COVID-19 lockdown.

The ability to secure a better interest rate was the most common reason for remortgaging, at 54%, but 30% of landlords did confirm that they had remortgaged to raise capital, making this the second most common driver, accounting for double the remaining reasons combined.

Landlords who own four or more properties accounted for the highest proportion of buy-to-let mortgage business, rising from 25% in quarter one to 28% over the past three months.

The extra impetus provided by the recent changes to stamp duty thresholds for homeowners and landlords will certainly shine an even greater light on the potential for using these cash reserves for purchases and portfolio additions.

As outlined by Steve Olejnik, managing director of Mortgages for Business, the stamp duty cuts not only make portfolio expansion more attractive, they represent an excellent opportunity for individual buy-to-let landlords to sell their properties into a limited company structure.

This would take advantage of tax relief on mortgage interest, since selling to a limited company would normally

incur a stamp duty charge. Factors which all point to a busy Q3.

A SHORT-TERM LET UP?

Focusing on another important part of the BTL sector, in recent weeks we’ve seen heightened activity around shortterm lets, most notably when it comes to holiday lets.

Travel and tourism have been hit hard by the recent pandemic, and with the UK hospitality industry just about up and running as best it can, ever more people are looking to emerge from their lockdown bunkers and start venturing out and about, although maybe still not as far afield as in the past.

Even before the COVID-19 outbreak, the popularity of staycations and people visiting the UK was on the rise. As a result, a growing number of landlords, investors and lenders have been taking advantage.

According to Visit Britain’s original forecast for 2020, released in December 2019, inbound visits to the UK were set to grow by 2.9%, and spending by inbound visitors was to grow by 6.6%, setting new records in each case.

Whilst the UK will continue to suffer from a lack of overseas visitors, staycations have proven increasingly popular for a growing number of Brits, and this trend will prove even more popular over the course of 2020, and further beyond.

After a forced hiatus, more options are now emerging for landlords who might be looking to expand their portfolios or diversify into the shortterm let market.

Many of these products are now available to individuals, joint applicants and limited companies, and allow the mortgage holder to let through a variety of avenues, including Airbnb.

Choice will continue to emerge in this product set. Here at Foundation Home Loans, we are pleased to be back in the short-term let space, as we believe there will be a growing demand to utilise these properties – this will prove to be an interesting area to follow over the Summer months. M I AUGUST 2020 MORTGAGE INTRODUCER

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REVIEW

BUY-TO-LET

Continuing change in buy-to-let Jane Simpson managing director, TBMC

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month is a long time in the buy-to-let mortgage market, which has always been a dynamic sector that continually changes in line with social, political and economic factors.

The big news for landlords in July was the announcement of the stamp duty cut in England for properties valued up to £500,000.

This measure, introduced by the government to help stimulate the housing market, was also extended to buy-to-let properties, in a move which could really encourage landlords to start actively seeking to expand their portfolios again.

Although the 3% surcharge for

second homes is still applicable, buyto-let investors would previously have paid 5% stamp duty for properties up to £500,000, so there are big savings to be made while this incentive is in place.

As the government seeks ways to kick-start the housing market, it is also providing Green Home Grants to homeowners to help them make their homes more energy efficient. Once the scheme is launched in September, vouchers of up to £5,000 can be applied for, to help cover the cost of insulation and double glazing.

While businesses around the UK start to open up again, lenders are also returning to a more ‘business as usual’ approach to buy-to-let finance.

There has been a flurry of activity in the buy-to-let market over the last month, with lenders re-evaluating their lending policies and re-pricing their product ranges as competition continunes to increase. This is creating a downward pressure on mortgage

“Although the 3% surcharge for second homes is still applicable, buy-to-let investors would previously have paid 5% stamp duty for properties up to £500,000, so there are big savings to be made while this incentive is in place”

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rates, resulting in better deals for landlord clients.

Lenders are returning to more specialist areas such as houses of multiple occupancy (HMOs) and limited company applications, witha wider range of products now available.

Lenders such as Leeds and Hampshire Trust Bank are also offering products for holidays lets again, which presumably follows on from the opening up of these businesses around the UK. Some lenders may hold off on returning to this niche sector while there is still the possibility of a COVID-19 second wave, but with the growing popularity of staycations in the UK, the market looks promising.

In support of landlords during the coronavirus pandemic, some lenders will take account of furloughed income when assessing the affordability of buyto-let mortgage applicants.

However, lenders may not take such a lenient view of those applicants who have applied for a buy-to-let mortgage holiday during the crisis – this could be interpreted as demonstrating underlying cash flow issues with management of the property.

Overall, the buy-to-let mortgage sector is continuing to recover, so intermediaries can expect to experience an increase in enquiries from their landlord clients, particularly for purchases following the recent stamp duty cut.

Although face-to-face meetings with clients may still be off the table, some brokers have used this experience to transform their use of technology to do business.

This might include holding client meetings via Zoom, or just improving their online presence.

With the buy-to-let mortgage market still in a state of flux, it is important to stay on top of all the lender criteria and product changes to ensure that those landlord clients are getting the most suitable products.

TBMC aims to support brokers by providing our specialist expertise and up-to-date criteria knowledge to provide solutions to even the trickiest buy-to-let cases. M I www.mortgageintroducer.com

REVIEW

BUY-TO-LET

Effective two-way communication Richard Rowntree Xxxxxxxxxx managing director of xxxxxxxxxxxxxxxx, xxxxxxxxxxxxxxxx mortgages, Paragon

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he insight available through talking to mortgage intermediaries is something I have always valued. We engage with our mortgage adviser partners in a number of ways throughout the year, but listening to them over the past few months has taken on extra significance.

It will come as little surprise that the latest edition of our quarterly Financial Adviser Confidence Tracker (FACT) Index was dominated by COVID-19.

Its impact has been felt by most – 90% of respondents recorded a negative of impact on their business, with 25% saying it was a significant one.

The pandemic placed the entire industry – lenders and brokers – in unfamiliar waters. In addition to finding out how our broker partners have fared, asking them to share their experiences of working with lenders throughout the crisis provides a unique view of our own business – what are we like to work with when we’re faced with a new kind of adversity?

The evolving nature of the situation meant that doing what was necessary to protect a business, its customers and its employees was not so simple. Firms have had to make difficult decisions, adapting and responding as best they could with the knowledge available at the time. Looking at the feedback provided by intermediaries, I’d say that lenders have done this well, but there’s always improvements to be made.

The research highlighted several key areas where lenders can learn lessons.

Common frustrations focused on product availability, with lenders withdrawing higher loan-to-value www.mortgageintroducer.com

(LTV) products as the crisis halted physical valuations and caused widespread economic uncertainty.

Banks are led by the need to lend responsibly, and it became necessary to tighten criteria in some areas.

The student market is a good example of this. Pre-COVID, lending in high demand student towns and cities presented a largely acceptable risk. However, the uncertainty around whether universities will operate as normal due to coronavirus meant that lenders adopted a more cautious approach to this segment.

FACE-TO-FACE

My sense is that if universities are able to offer services, we will see a return.

Even if face-to-face lectures aren’t always possible, I expect these are only part of the draw for many young people who, after being locked up with their parents for months, will be desperate for some of the freedom that student accommodation offers.

Considering these things, it should come as little surprise that when intermediaries were asked how lenders could support them during difficult times, ‘service’ came out on top.

A particularly important element was ease of access to staff to enable cases to be discussed.

I was pleased with my team’s response to this – we fully mobilised

Effective communication is key to success

our underwriters and support team to work from home within a week. This included moving our physical valuation to desktop to allow us to continue to lend throughout the crisis, and brokers have been able to speak to our staff over the phone.

This was in part due to our manual underwriting approach and our recent investment in our IT infrastructure.

Some may say we were lucky with the timing; I’d rather call it brilliant planning! Joking aside, I know not all firms were in a position to mobilise in this way, and service suffered as a result. This highlights how technology is such an integral part of how we work; however, in some situations, it should be used to facilitate human interaction and not replace it.

Flexibility was also cited as being important. Those lenders that have fared best have done so by striking a balance between being responsible while taking a flexible approach that looks at applications on a case-by-case basis, where possible.

When you’re talking about something of this magnitude, ‘where possible’ is a big caveat. I’m sure many lenders would have preferred to look at cases individually, but a lack of staff and systems meant this simply wasn’t possible for all.

It was encouraging to see brokers take a pragmatic view on these issues, however. Despite their frustrations, it seemed intermediaries recognised that despite impressive efforts from the industry, lockdown would negatively impact companies’ ability to operate, and extra processes and diligence would be necessary.

What they did want is good, effective two-way communication.

With the need to adapt again on the horizon – with the end of the next payment extension, the furlough scheme and the stamp duty holiday – lenders can learn from what they did the first time around.

It seems that brokers will work with you to overcome the challenges posed by criteria and product changes, but we need to support them. A good place to start is getting the basics right, such as clear, concise information and people on the other end of the phone. M I AUGUST 2020 MORTGAGE INTRODUCER

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BUY-TO-LET

A time for greater optimism Ying Tan founder and chief executive, Dynamo

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uring a period where some months seemed to last a year, July 2020 has in fact flown by.

I’m not sure if this is because we are well and truly used to the ‘new normal’ working conditions, whether it’s due to being so busy dealing with a variety of enquiries, or that much needed stability is now coursing through the buy-to-let (BTL) marketplace.

Another factor in this was the recent announcement from the government regarding stamp duty changes. From a landlord and investor perspective, this gave rise to some initial confusion.

However, once the dust settled – and the government’s stamp duty calculator finally updated – enquiry levels rocketed from those in a position to take advantage of favourable tax conditions. These, let’s be fair, are well overdue for landlords and property professionals across the UK. The stamp duty holiday will also encourage more people to get onto, climb up, or even take a step down the property ladder.

The potential tax savings on offer over this limited period are likely to encourage more activity and hasten important decisions over where people want, and can afford, to lay their hats.

The government has also been busy compiling a raft of data focused on the private rented sector over the course of the past month.

RENTING VS HOMEOWNERSHIP

Recent data from the Ministry of Housing, Communities & Local Government outlined that while private renters spent 33% of their household income on rent in 2018–19, those with a mortgage spent 18%.

The mean weekly housing costs for private renters was suggested

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to be £200, compared to £172 per week for mortgagors, £96 for local authority tenants and £106 for housing association tenants.

In other findings, 2018-19 saw 77% of private renters pay a deposit when moving into a property; in 2008-09, this was reported to be 70%.

In 2018-19, 19% of mortgages were for 30 years or longer; this has greatly increased from 7% in 2008-09.

This difference is most apparent for first-time buyers: 45% in 2018-19 had a mortgage of 30 years or greater, compared to 33% in 2008-09.

The homeownership versus rental debate is one for the ages, and the list of pros and cons for each side of the fence will inevitably differ with every individual, couple or family.

The fact remains that the mortgage market needs a healthy level of firsttime buyer activity, as these borrowers remain the cornerstone of the industry.

However, whilst a mortgage may be cheaper than renting for some, deposits, affordability and higher loan-to-value (LTV) restrictions mean that the private rented sector will continue to be the only place that millions of Brits can turn to, especially in these troubled times. And this also constitutes a viable choice for many.

In another area of the Ministry of Housing, Communities & Local Government report, some 84% of private tenants were found to be satisfied with their accommodation in 2018-19 – up 1% year-on-year.

This compared to 81% in the social rented sector. The data also revealed that 73% of private renters were satisfied with the way their landlords carried out repairs and maintenance, compared to 67% of social renters.

Landlords can often get a bad press, but we have to remember that these negative stories only apply to a tiny minority. It’s great to hear that such a large proportion of tenants are satisfied with their housing.

Yet more government figures, this time the Office for National Statistics (ONS) showed that private rental

MORTGAGE INTRODUCER AUGUST 2020

prices paid by tenants in the UK increased by 1.5% in the 12 months to June 2020.

Growth in private rental prices paid by tenants in the UK was reported to have generally slowed since the beginning of 2016, driven mainly by a slowdown in London.

ENCOURAGING SIGNS

Rental growth started to pick up from the end of 2018, driven by strengthening growth in London, but has remained broadly flat since November 2019.

In the 12 months to June 2020, rental prices for the UK, excluding London, increased by 1.6%, unchanged since April 2020. Between January 2015 and June 2020, prices increased by 9.3%.

Breaking these down country by country, the largest annual rental price increase across England in the 12 months to June 2020 was in the South West (2.5%), followed by the East Midlands (2.3%).

The lowest annual rental price growth in the 12 months to June 2020 was in the North East (1.0%, up from 0.8% in May 2020) and the North West (1.0%, unchanged since May).

In Wales, private rental prices grew by 1.4% in the 12 months to June 2020. Rental growth in Scotland increased by 0.6% over the same period to June.

Scotland’s rental growth is said to have remained weaker than that of the rest of the UK since August 2016.

Finally, the annual rate of change for Northern Ireland in June 2020 (2.6%) was higher than that of the other countries of the UK. The Northern Ireland annual growth rate has remained broadly consistent (around 2%) since 2018.

These healthy rental prices offer encouraging signs for domestic and overseas investors currently evaluating the UK housing market.

It’s fair to say that we can all look forward with greater optimism than we thought imaginable only a matter of weeks ago. M I www.mortgageintroducer.com

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PROTECTION

Accident, sickness and confusion Kevin Carr chief executive, protection review, and MD, Carr Consulting & Communications

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or the past three months, barely a week has gone by without at least one journalist asking about COVID-19 and protection insurance.

‘Why are insurers pulling products?’

‘Why can’t anyone get cover?’

‘Why are those nasty insurers mistreating people yet again?’

And so on.

On one hand, if you ran a consumer survey asking if people thought it might be more or less difficult to buy protection insurance during a global pandemic, I suspect the answer would be pretty clear.

On the other hand, not that much has really changed.

Confusion arises, though, due to the differences between short and longterm insurance products, where the product names all sound similar.

When redundancy cover became impossible to buy a few months back, press releases broadly criticising income protection (IP) providers for pulling out of the market were quickly sent out and written up, despite the fact that not a single IP provider had actually pulled out of the market.

But that depends on your definition of income protection.

Even among experts there are different definitions, and any product that provides a form of replacement income can arguably be deemed ‘income protection’.

So, is it any wonder that non-experts get confused? It’s not just customers and media, but big corporations too.

This confusion is largely of the industry’s own making of course, and it goes back longer than anyone cares

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NEWS IN BRIEF The IFoA has published a report, Building Financial Resilience of Households in the Private Rented Sector, which calls for a change to benefit rules for renters taking IP and family income benefit (FIB), giving them parity with homeowners, which would result in fewer getting into financial difficulty.

to remember. So does it matter? Well, yes. Because the outcome of the issue is almost always negative, and the poor old customer is inevitably the one in the firing line.

A review to bring some clarity – as difficult as it may be – is long overdue.

ADVISER VIEW

Cura managing director Alan Knowles said: “We advise on both long-term income protection cover and shortterm accident and sickness (A&S) plans – including many who refer to their plans as ‘income protection’.

“We believe there is a place and need for both policies, and sometimes A&S cover is cheaper. It’s also quicker to get cover in place and more widely available to people with pre-existing medical conditions, although those conditions are normally excluded.

“Many long-term IP plans also offer the option to have a shorter claim where the pay-out is restricted to one, two or five years (often called shortterm income protection). Confused yet? Technically though, these are still long-term policies, as they are fixed until a certain age and cover can’t be taken away from you.

“Those of us in the industry care greatly about these differences, but the average customer does not. They just want a policy which is reasonably priced, has good benefits and most importantly that will pay out if they need it.

“If we want to stop the confusion and misinformation, then a review of terminology would be a good idea.”

Johnny Timpson at Scottish Widows said: “Speaking personally, and as Cabinet Office Disability and Access to Insurance Champion, I echo Alan’s comments. From an access standpoint, transparency and clarity really matters.

“The name of insurance products and services need to clearly reflect the solution met and benefit delivered.” M I

Online GPs could save UK businesses of up to £1.5bn, according to a new report from Axa PPP healthcare, which shows businesses could have avoided £1.5bn in lost working time in 2019 if workers opted to use remote GP services instead.

Aegon has reported significantly lower critical illness claims for April and May compared to the previous year, although April saw an 83% increase in life insurance claims compared to the same month in 2019.

Holloway Friendly has reintroduced its four-week deferred period for income protection, which was originally withdrawn in March.

Customers simply want a policy with good benefits

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MORTGAGE INTRODUCER

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This way to insurance protection Andy Philo director of strategic partnerships, Vitality

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he purpose of insurance is to help people protect what’s important to them, be that their home, income or life.

However, some consumers can find it harder to get insurance because of existing health conditions or the nature of their occupation.

Whilst insurers decline very few risks, consumers with particularly complex risks may require a specialist to provide them with cover.

In January of this year, the British Insurance Brokers Association (BIBA) launched a signposting agreement, with signatories across the insurance industry, regarding access to protection insurance for people with disabilities

and pre-existing medical conditions.

This is undoubtedly a step in the right direction in terms of supporting consumers to get access to insurance that may not have been easily or readily available to them previously.

Whilst signposting has taken place in one form or other in the industry prior to this, this formal agreement should result in better collaboration between advisers and providers.

When approaching cover, both advisers and providers should consider whether they can provide it adequately for any given client. If not, they should look to signpost them to a provider that is able to do so.

It is right that with this approach the onus is on finding the right product to meet the client’s needs, rather than the other way around.

It is just as important to ensure that you are signposting the customer to an alternative provider that is actually able to help, rather than just passing them

onto the next person in the hope that they can.

Another positive impact is that this goes some way to building trust and improving the perception of the industry. It is important that the industry does a better job moving forward of communicating that, where someone has a disability or pre-existing health condition, this won’t mean their cover is automatically refused, or their premiums become so expensive that the cover is not affordable.

At Vitality, we see this agreement as firmly embedding our core value or helping people live a healthier life.

We decline very few risks, but we welcome the signposting agreement and hope that it is broadened to other products in the future.

I believe it is important for everyone to be able to access protection, and signposting helps even more people do so, in turn moving towards closing the MI protection gap.

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Remember the principles of insurance Mike Allison head of protection, Paradigm Mortgage Services

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ince Edward Lloyd opened a coffee house in late 1680, establishing a meeting place for parties in the shipping industry to insure various cargoes and ships, the world has witnessed a plethora of insurance contracts to cover thousands of potential eventualities.

The basic principles of insurance (utmost good faith) were established in law in 1766 in Carter v Boehm.

It is a principle based on precedent rather than on a set of defining codes or statutes. Utmost good faith requires honesty and full disclosure at all times, starting with the application phase.

It prevents both the insured and insurer from concealing or misrepresenting facts during the application phase, prevents the insurer from ever altering the policy without full disclosure during the time the policy is in force and, in the event of a loss, requires the insured to provide a full, honest representation of the facts surrounding the event and loss.

Put simply, people should be honest when applying and insurers should – on the basis of this honesty – pay out to clients when the insured event happens.

We now live in more sophisticated times, of course, but those basic principles still apply to assessing the risk which is at the heart of the industry.

Fast forward to 2020, the pandemic, and UK insurers’ response.

If actuarial science is at its best, anything adding to risk could potentially see a hike in premiums or a review as to whether that risk should be taken on board by insurers.

Known factors should always be excluded when calculating true risk. www.mortgageintroducer.com

At the time of writing we are aware that something like 45,000-plus people have sadly died in the UK, having contracted COVID-19.

It’s likely to be more, given that we do not know the exact number of ‘excess deaths’ and probably will not for a while.

Insurers had the option to exclude applications for cover or hike premiums or both.

In the UK, most insurers sought to ask a few more questions to try to establish potential risk, and there is little evidence to show prices were significantly affected, so credit must go to them for that.

They should also be applauded, in the main, for putting their business continuity plans in place and allowing the industry to continue operating, albeit at times at a reduced level of service and capacity.

In reality, the ordinary man or woman on the street could get access to life assurance when needed.

GLOBAL RESPONSE

This UK-based praise is heightened when we see how insurers around the world reacted to the same issue.

According to Montoux, a firm working closely with insurers on their strategies across the globe, they reacted differently in different territories.

In the UK, while solvency and liquidity positions have been closely managed, and stress testing has been taking place related to mortality and morbidity, in the USA some 25% of risk carriers stopped or restricted sales of products due to COVD-19.

Conversely in China, Hong Kong and Taiwan there was evidence of specific product and coverage launches.

In addition, there was regulatory support and encouragement for new products and changes to distribution, while insurers there have been investing in digital sales channels and there has

been more of a focus on simplified issue products and accelerated underwriting.

What’s more, innovation is occurring to extend and deepen customer engagement through insurers’ apps, health apps and social media.

While the UK is not quite there yet, insurers cannot be accused of shying away from their responsibilities or reacting negatively from a pricing perspective; indeed, I have seen only today that Vitality is allowing access to COVID-19 tests for some of its healthcare clients.

“While praising insurers on one hand, it is a timely reminder that if they are open for business, they must act properly in assessing true risk” The pricing reaction is even more laudable, given the part reassurers now play in pricing strategy, especially with their worldwide knowledge of the impact of COVID-19 in this instance.

However, while praising insurers on one hand, it is a timely reminder that if they are open for business, they must act properly in assessing true risk.

In the last couple of days our underwriting support line at Paradigm has taken calls from a number of advisers concerned about certain insurers being over-zealous in underwriting decisions, and clients due to undertake routine medical procedures being postponed until after the procedure.

Insurers must realise that waiting lists have increased immensely over the past few months. Some have estimated the ‘routine procedure’ count at now over 10 million and these procedures, especially minor ones, may not take place for some considerable time.

If insurance is about known additional risks, insurers cannot and should not take the opportunity to choose those to take and not base them on the current environment.

They should heed the basic principles mentioned at the outset to continue the fine work they do in the main. M I AUGUST 2020 MORTGAGE INTRODUCER

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PROTECTION

A healthy industry Steve Ellis head of risk and protection, Premier Choice Group.

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f all the protection and healthcare insurances, private medical insurance (PMI) probably has the less obvious fit with mortgages.

That said, if you have a client who needs an operation or medical treatment, a delay in getting it will impact their life, work and income, and hence their ability to pay their mortgage, move or remortgage. A swift solution via PMI would be very helpful.

Medical treatment and our glorious NHS has, of course, been a focus of attention during the pandemic. Many treatments have been put on hold as COVID-19 patients are prioritised and hospitals try to keep people safe and out of hospital. Not essential? It can wait.

Distressingly, though, many undergoing cancer treatments have encountered delays, and whatever the ailment, no one wants to have to wait.

The private medical sector has played its part, in that the hospitals were closed to private treatment and their resources made available to treat the pandemic and all patients, with or without insurance. This is in itself is not unprecedented.

Still, there has been comment in the consumer press that healthcare intermediaries consider unhelpful. It has been suggested that PMI could be worthless, because independent private hospitals have handed over capacity to the NHS to fight COVID-19, and articles have criticised PMI insurers for not returning premiums.

Stuart Scullion, chairman of the Association of Medical Insurers and Intermediaries has pointed out that medical insurers and Health Cash Plan providers have embraced the digital opportunity created by the pandemic to seek new ways of continuing to deliver value to policyholders.

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He says: “Healthcare is about so much more than just inpatient treatment: digital GP appointments, online physiotherapy, mental health support and counselling are all examples of providers working to deliver value during exceptional times.

“Healthcare is not like a subscription TV service that you can just turn on and off.”

And if you have clients thinking of cancelling their cover, Scullion warns: “I would urge policyholders to think carefully and speak to an independent intermediary before cancelling cover, in order to protect the underwriting of any pre-existing or ongoing medical conditions.”

There is no way of knowing for sure when private hospitals will open their doors fully to private customers. But, ahead of any second wave of the virus, NHS hospitals are seeing capacity freed up as the number of COVID-19 cases recedes. The need to have recourse to private hospitals should correspondingly diminish.

Critics should hold fire for a moment on calling for insurers to refund policyholders straight away. There is a process whereby insurers must carry out a value assessment on their service.

They have six months to do this.

It may be that they return some premiums, extend the cover period or offer some form of compensation to their policyholders.

This is not to say your clients who have PMI should not consider shopping around if they feel they have been let down by their provider.

It is not universally clear that there have been claims rejected or the extent to which treatments have not been provided. All this will come out eventually, but now is not the time to cancel or knock the industry. Without an independent private healthcare sector there would not have been that extra capacity for the NHS to employ.

To the best of my knowledge, no one is asking for an income tax rebate because they’ve been unable to get NHS treatment. As with many aspects

MORTGAGE INTRODUCER AUGUST 2020

of life at the moment, this is a time to take a practical approach.

There is a very strong argument that those without PMI – and who can afford to do so – should consider taking cover out.

The NHS has a backlog to catch up on – as may the private sector – but if you can give your clients wider options on how and where to be treated, and free up NHS resources at the same time, why not suggest it?

You may find them pleasantly surprised that PMI is not as expensive as they had feared – and cash plans offer a very cost-efficient way of paying for many medical and healthcare needs.

We all support and value the NHS – even private healthcare insurers.

SMALL CHANGE

A bit of good news, and proof that life will return to some normality, is the increase in UK residential property transactions for June to 63,250 – up 31.7% on May, even if 35.9% lower than June 2019.

Still, while clients are holding back on house buying, this is a good time to keep them appraised of the mortgage options out there and encourage them to see this as an opportunity to continue to build up deposits or review their insurance. Indeed, not having the cash to spare is less of an argument for many during lockdown.

Consumer borrowing is down, reflected in the fact that debt for over55s is predicted to have fallen from £226bn in 2019 to £207bn by 2021, according to equity release lender more2life. Debt is then set to rise again, but for now there is an opportunity to do some planning.

The lender cites Office of National Statistics (ONS) data that reveals that households have saved an average of £182 per week during lockdown.

The associated lack of consumer confidence which is impacting on spending and borrowing is fertile ground to instigate discussions about insurances which might protect the household’s finances. M I www.mortgageintroducer.com

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Diversity in financial services Rob Evans CEO, Paymentshield

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ecent developments in the Black Lives Matter movement have galvanized dialogue nationwide around institutionalised prejudice, unconscious bias, and black, Asian and minority ethnic (BAME) under-representation.

These are issues from which the heavily white and male financial services sector is by no means exempt.

Lack of diversity is glaringly present across the mortgage and insurance industries. But acknowledging this is not enough, and is too often selfcongratulatory. We must translate this awareness into action, and do so in a way that is meaningful, tangible, and proactive. We must also recognise, however, that there is no quick fix.

The fast-moving and target-driven nature of business is inoperative in the fight for a more inclusive workforce.

It will take time, and the solutions will need to be multi-tiered and undergirded by genuine understanding.

Paymentshield appreciates that to make progress, education is essential. This is why we have introduced company-wide, mandatory unconscious bias training.

Our targeted modules and learning materials explore how to recognise the ways in which prejudices manifest, and more importantly, offer strategies to confront them. Longlasting, material change will only be possible if we build thorough and authentic comprehension of our own biases.

This training will be key, if not necessary, until future generations are provided with a rounded and honest education that helps to combat the perpetuation of generational prejudices.

Taking a hard look at recruitment processes will also be significant in tackling diversity issues in the workplace, including gender.

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The financial services sector is a notorious culprit of gender imbalance.

That is why at the beginning of 2020 we made it compulsory for each role in our business to have a genderneutral shortlist – that is, an equal number of self-identifying male and female applicants. The measure was also valuable for initiating nuanced discussion within the company, as it forced us to reflect upon what we were trying to achieve and why.

Affirmative action is important and must not be trivialised, but it should also never lapse into tokenism, which is often more harmful than helpful – not only to the individuals and organisations involved, but also to the cause we try to champion.

Appealing to a wider pool of talent is therefore key, and this is why earlier this year we actively ensured we had the correct measures in place to attract more female candidates.

After putting our job adverts through language-testing software and finding it to contain masculine wording that deterred female applicants, we rewrote our materials to make them as genderneutral as possible.

Three months later, we were seeing fresh, female talent like never before, and more and more women were progressing past the CV stage.

We must acknowledge, too, that developing and retaining this diverse talent is equally critical as initially attracting it.

Getting through the door means very little without support mechanisms, working methods, and corporate

culture in place to enable individuals to thrive thereafter. Representation is central to this.

The saying, “you can’t be what you can’t see” rings true: representation not only bolsters the confidence of marginalised groups, but also provides role models, enabling young professionals to visualise their own success in the future.

It is in the interest of both financial services firms and the wider media, therefore, to take the initiative to represent diverse talent, and begin this positive cycle.

In this respect, the COVID-19 pandemic has opened our minds to the importance of decoupling role and location in terms of representation.

With the increasingly apparent need to adopt a national over local approach to business, we have learned as a Southport-based company that debate around matching our makeup to regional representation is not necessarily helpful.

This has been the first step in introducing more positive, affirmative action, which we’re continuing to work on, ensuring it delivers in its execution and impact, and not just intention.

When it comes to diversity and inclusion, complacency is not an option. No matter the scale of the company or its access to resources, we all perpetuate biases – unconsciously or otherwise – and we can all take action.

Tackling these prejudices will be a slow and instructive process, but for the financial services sector in particular, it is also an imperative. M I

When it comes to diversity and inclusion, complacency is not an option

MORTGAGE INTRODUCER AUGUST 2020

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Project speed needed All change to stimulate market Geoff Hall chairman, Berkeley Alexander

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few months ago I commented that commercial property is widely expected to suffer as a result of the pandemic, and that we would likely see more empty or partempty properties, as well as owners seeking to turn empty spaces into residential or other uses that make for a more marketable prospect.

The proposed planning reforms recently announced by the UK government to rapidly increase housing stock will give property owners more freedom to build, extend and implement a change of use, often without planning under permitted development rights, including:  no longer having to go through the usual planning application process to demolish and rebuild empty residential and commercial buildings, as long as they are being used for new homes;  being able to convert a wider range of commercial buildings into homes without requiring planning approval for the change of use;

 constructing additional space above properties without planning permission, subject to neighbour consultation.

With the activity this will hopefully stimulate in the market, it should be remembered from an insurance perspective that freeholders still have a duty to insure these properties adequately and appropriately, whatever their use class.

Also, if they are building, extending, or undertaking any other works to the property then this too should be disclosed to the insurer.

It is often wrongly assumed that insurers will automatically cover works, or that builders or developers will carry their own insurance to cover any damage or liability issues that come up during works.

As many of these commercial properties are currently standing empty or part-empty, it should be noted that unoccupied properties also require specialist cover.

Advisers will be valued in helping clients navigate increasingly complex insurance territory and both advisers and general insurance providers will need to work ever more closely to ensure the right products are made available for customers. M I

T

here was a report in The Guardian that highlighted the increasing exodus out of cities, whether to avoid perceived high risk in built up areas in favour of fresh air and countryside, or because remote working has removed the necessity to reside in cities.

Whatever the reasons, big lifestyle changes should always prompt conversations around insurance – whether it’s for home and other personal lines, or commercial cover.

With so many clients now working from home, for example, it could be worth reminding them to make their insurer aware if they are working from a new garden office or converting an outbuilding, and to make sure the correct sums are insured.

There are liability considerations, too – anyone receiving business visitors to their home (regardless of whether they are customers, suppliers or colleagues) will need to be declared.

The other common trap clients may fall into is that because they are using a spare bedroom as an office, the number of bedrooms in the property has reduced.

For bedroom-rated policies this would have a bearing on the cover and premium; remember, a bedroom is “a room that is used, or was designed/built intended to be used as a bedroom”. A claim could be repudiated if the correct number of “bedrooms” aren’t declared at inception. M I

Mystic Meg – trade credit

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ack in March, I wrote about whether trade credit insurance was the sleeping giant of general insurance (GI). Now, it has been propelled into the headlines.

One insurer said it had budgeted for a 6% increase in claims in 2020, but had now revised that to 300% due to COVID-19.

Trade credit insurance underwrites an estimated £350bn of economic activity of more than 630,000 businesses in the UK each year. It provides clients with insurance

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against bad debts if the firms they supply cease trading or default on payments, and can also help with the collection of payments and management of cashflow.

It is generally cheaper than and provides wider coverage than factoring the debt, and can be used to support business loans, as banks are more willing to loan to a firm with insurance and good cash flow management.

The government has now offered insurers a £10bn lifeline to maintain cover. The

guarantees are intended to support supply chains and help businesses “trade with confidence, safe in the knowledge that they will be protected if a customer defaults or delays on payment”.

Insurers haven’t relaxed their underwriting criteria, will monitor vulnerable companies closely, and premiums will inevitably rise, but they are very much open for business, which will be of considerable relief to businesses all over the UK.

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Video killed…

Kevin Paterson director of Xxxxxxxxxx sales & marketing, xxxxxxxxxxxxxxxx, Ceta insurance xxxxxxxxxxxxxxxx

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o, for the last few months most of us that are not essential or key workers have been working from home.

This is something I have done one or two days a week for many years, and I am quite used to it. It doesn’t work for everyone though – you have to be organised and disciplined.

Certainly I have found that this quiet time away from the interruptions to be very productive, and I usually get lots more done, especially if I need to really think about a particular issue.

VIDEO WIPEOUT

However, I have been intrigued as to why, given the greater efficiencies video and conference calls can and indeed have made, and the relative lack of physical exertion, I have found myself absolutely wiped out at the end of the week.

It seems there are some really straightforward reasons, and more importantly some common-sense steps you can take to mitigate this.

Indeed, many experts now believe that taking active steps to reduce the stress of working remotely is vital for mental wellbeing and our long-term physical health.

Because this has become part of our everyday life, some of us may not realise just how stressed we are becoming until something happens to trigger an uncharacteristic response.

It is now widely understood that humans communicate in a number of ways, and 60% of communication is non-verbal.

Consequently, being in a video call requires more focus than face-to-face methods, because video conversations require us to work harder to process these non-verbal cues like tone and pitch of the voice, facial expressions

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and body language. Paying attention to these therefore consumes more energy.

Add to this the performance anxiety of being ‘on stage’ where you know everyone is looking at you – the need to perform makes the process a little more nerve-wracking and stressful, even if you don’t immediately recognise it.

In fact, a 2014 study by German academics observed that even a 1.2 second delay in phone or conferencing systems shaped negative views, often making the people participating perceive the responder as less friendly or focused.

There is a term used by psychologists that is particularly relevant to the stresses video calls create, and that is ‘cognitive load’.

Our brains can only do so many things consciously at once because we have limited working memory.

In contrast, we can process much more information unconsciously, as we do with body language. Meeting online increases our cognitive load because several of the features take up a lot of conscious capacity.

UNDER PRESSURE

Then there is the fact that aspects of our lives that used to be separate – work, friends, family – are now all happening, to a large extent, in the same space.

The self-complexity theory posits that individuals have multiple aspects – context-dependent social roles, relationships, activities and goals – and we find the variety healthy, so when these aspects are reduced, we become more vulnerable to negative feelings.

If you are anything like me, you rarely leave enough time in between meetings, creating more time pressure and not allowing the time needed to actually do the work that is often created by these meetings. The workload then backs up, creating yet more pressure.

OK, so much for the psychology and the negatives of this new way of working; so what can we do about it?

I have collated here some ideas, cheats

MORTGAGE INTRODUCER AUGUST 2020

and hacks that may help us all manage more effectively, without losing the undoubted benefits this new techenabled way of working has created: 1. Use your phone and not your computer to make a call. Some of our meetings can be less stressful if we ‘show-up’ by phone, and this gives you the freedom to move around.

2. Don’t schedule back-to-back meetings. The temptation is to cram in as many as possible to be as efficient as possible, but this leaves no time to reset in between, nor does it allow any time to actually do any of the work that tends to come out of them.

3. Taking notes by hand has been shown to increase retention in the classroom, or in my case, to help me remember what the hell it is I actually have to do.

4. Make sure your ‘home office’ feels different from your ‘living area’, even if its in the same area. Change the lighting, ditch the coffee mug or water bottle, and change the playlist when you go ‘off-the-clock’.

5. Make cameras optional.

6. Have your screen off to the side instead of directly in front of you, as this can help with concentration.

7. Try to mix it up, can you avoid a meeting by messaging or emailing the details? Is a phone call more appropriate? Or is there an opportunity as we slowly return from lockdown to meet face-to-face (social distancing allowing, of course)?

Face-to-face meetings are an important ritual in the office and can provide us with comfort, put us at ease and are essential in building and maintaining a rapport.

We are by nature social creatures, so moving completely to an artificial environment overnight is going to feel different and can be stressful.

There have been some undoubted gains from being forced to adopt this new tech more quickly, and adoption has been high, but we should also recognise that we need to create the right balance. M I www.mortgageintroducer.com

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When change is a blessing in disguise John Dobson CEO, SmartSearch

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he COVID-19 crisis has brought many changes to what was once considered ‘normal’, most of them decidedly unwelcome.

The property industry has been particularly badly affected by the restrictions on movement that were introduced to tackle the outbreak; this impact will continue if, as sadly seems likely, there is a prolonged economic downturn on the back of the crisis.

Ultimately, people will still want to buy and sell homes, and they will still for the most part need to access finance to do that.

But if there are lower volumes that will mean everyone has to work harder to win custom.

This makes it all the more important to streamline business processes and ensure customers have as smooth an experience as possible, including within the onboarding process.

At first sight, this may seem like another area where coronavirus has made life more difficult.

Identity verification often takes the form of a simple check of a customer’s passport or driving licence and proof of address, usually conducted in person.

This has not been possible during lockdown, and with social distancing likely to remain a feature of everyday life for some time to come, firms will need to continue to use alternative ID verification methods.

In fact, this could give the industry the wake-up call it needs to ditch manual ID checks.

No less an authority than HM Land Registry recently wrote that these “don’t feel very 21st Century” www.mortgageintroducer.com

to maintain social distancing while verifying an applicant’s identity.”

But is it enough? On its own, no.

Facial recognition provides an additional layer of security, but it needs to be underpinned by other data to build up a full digital identity.

That should start with credit reporting data, for which it is almost impossible to create a false trail, and can be further supplemented by fraud checks using the email addresses, mobile phone numbers and IP addresses that are part of a customer’s digital history.

If these three separate layers of security all match up, that is the most reliable evidence you can get that a customer’s identity is a genuine one and that they are operating ‘above board’. Change is not always welcome, but sometimes it is both necessary and desirable. Digital ID verification and customer onboarding is a perfect example of this.

The ongoing coronavirus outbreak makes it necessary to change the way these functions are performed, but this turns out to be a blessing in disguise, as digital processes are also both more convenient and more reliable. M I

and called for firms to adopt digital solutions instead.

This call was also backed by the Law Society, the Council for Licensed Conveyancers (CLC) and the Chartered Institute for Legal Executives (CILEx).

SOPHISTICATED CHECKS

The Land Registry recommended the use of cryptographic and biometric checks, which first authenticate the validity of ID documents, and then use the biometric data they contain and compare that against a customergenerated ‘selfie liveness video’ (SLV) to ensure everything matches up.

In itself, this is more sophisticated than a simple face-to-face passport check, as well as removing the need for physical documents. As the Land Registry stated, this provides “a robust and convenient answer to the need

Digital ID verification is more convenient and reliable

AUGUST 2020 MORTGAGE INTRODUCER

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REVIEW

EQUITY RELEASE

Conversations don’t get tougher than this Stuart Wilson CEO, Air Group

F

ive months on from the start of lockdown and, as life slowly inches back into a semblance of normality, the enormity of what we have been confronted with as a nation, and indeed the vastness of what we now have to confront economically, is perhaps beginning to dawn on everyone.

These are still truly unprecedented times, and the level of government support has needed to match that.

As I write, the furlough scheme is beginning to wind down, but across so many other areas government support will continue and will be added to.

PAYING IT BACK

In that regard, it was perhaps no surprise to hear the Office for Budget Responsibility (OBR) recently voicing its opinion that the government will either need to raise taxes or cut spending in order to move away from an ‘explosive’ debt path.

The reality, however, is likely to be that the government will need to do both in order to begin paying back its record levels of borrowing.

The question, of course, is at what point the government will feel that it can move towards this route. And of course, even before COVID-19 hit, there were some incredibly difficult issues being kicked into the long grass which will need to be dealt with, not least how we pay for our ageing population, and specifically how we fund social care in this country.

To misquote Gregg Wallace in Masterchef – celebrity version or otherwise – ‘conversations don’t get any tougher than this’.

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Successive governments have commissioned countless reports which tend to come back with recommendations that seem too tough to swallow for any political party wanting to win power.

You’ll recall how the Conservative election campaign of 2017 was effectively scuppered by its confusing policy in this area, with Theresa May promising that “nothing has changed,” but the country not buying it.

Even as I write this, the rumour-mill is working overtime with suggestions that the government is reviewing a policy which would see everyone over 40 years of age paying more in either tax or national insurance (NI), or needing to take out insurance, in order to pay for their care when older.

The devil is likely to be in the detail here, but one can already foresee a significant backlash against such a policy if it looks like everyone, regardless of income, is going to pay the same amount.

Such policies have been mooted before of course. The current government has a history of ‘trialling’ measures in the court of public opinion before it decides whether to take them forward or not.

This could be such a case, and we therefore shouldn’t be surprised if it never makes it to the statute book.

SOCIAL CARE FUNDING

However, and here’s the real nub of this particular argument, at some point, a government is going to need to take a decision on social care funding.

The long grass will need to be cut back, and this political football will eventually be revealed and have to be played with.

It’s at this point where we might finally see an administration grasping the nettle of housing equity and its ability to support social care provision in the UK.

MORTGAGE INTRODUCER AUGUST 2020

Take recent research from Canada Life, which revealed that there is currently £500bn of equity available to UK homeowners over the age of 55.

We are not suggesting that the entire amount could, at the drop of a hat, be made available to help individuals fund their social care, but certainly there’s an argument to suggest that the government could present a more positive message around the ability to release equity.

Even if the government goes ahead with its over-40s plan, how does this factor in the needs of those already

“There will need to be greater use of housing equity in the future” in retirement, or those who are just reaching it?

They are unlikely to be able to build up the ‘fund’ required to meet those costs, and we have little detail, for example, on what the cost of insurance might be for those older individuals.

It seems somewhat inevitable that there will need to be greater use of housing equity in the future in order to meet not just the costs of social care provision, but also other responsibilities and commitments that older homeowners have.

Whether that is pension-related, cost of living, funding family members, or ensuring they can stay in their homes for the rest of their lives, equity release can provide a possible solution.

However, if that is to be a more central option, then government needs to present the solution and provide education and support to consumers, as well as signposting for the provision of professional advice.

These are always going to be difficult decisions for any government to make, but at some point they will need to be made. Far better to have a fullyinformed public which can then make the necessary preparations, than one which feels like sudden changes have been sprung upon it.

Equity release can provide a potential solution here, but more will need to be done to make that widely known. M I www.mortgageintroducer.com

Is your knowledge of the protection sector a little cloudy?

Keep up to date with the latest protection news and developments at www.mortgageintroducer.com

REVIEW

EQUITY RELEASE

Not a time to compromise Claire Barker managing director, Equilaw

A

s the number of coronavirus cases continues to fall, and the government begins to ease lockdown measures in earnest, the ability of businesses to adapt could prove instrumental.

There can be little doubt that fundamental changes are afoot, but what kind of trends can we expect to see in the coming months?

Well, one of the ways in which these changes could impact on the equity release (ER) sector is in terms of the operational models that businesses pursue, and the means by which they interact with their customer bases, particularly given the reliance placed on technology and other remote options during lockdown.

Few could have anticipated that the stop-gap measures implemented at the start of April would continue beyond the pandemic crisis.

Yet fast forward just a few months and a subtly different viewpoint is beginning to emerge, as the advantages of using remote consultation and dayto-day working processes begin to be better appreciated by businesses and customers alike.

For example, a recent more2life survey of later life financial advisers discovered that almost 60% believe that the ER sector will become more reliant on technology in the coming months, with over 70% and 60% of firms reporting an upswing in the use of video conferencing apps and phone conference lines during the lockdown.

Moreover, the research revealed that the number of brokers using provider portals has also risen during the past three months (by 19%), while the use of Facebook (25%) and LinkedIn (23%) has grown as brokers look for new ways to engage with existing clients or source new contacts.

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In short, the technology is there, it’s been shown to work well, and it’s making a major difference.

It’s also raising some interesting questions about the need for officebased workforces.

IMPROVED PERFORMANCE

Research conducted by business management consultancy firm Eden McCallum found that almost 50% of UK companies operating with home-based workforces under the lockdown experienced an increase in productivity (as opposed to 29% who said otherwise). The absence of long commuter journeys and the flexibility of home working conditions have been cited as key factors.

By comparison, 51% of the firms surveyed indicated that their staff had worked well from home, and that these practices would be allowed to continue, while 47% said they would be reviewing their internal processes so as to affect a more streamlined approach.

In practice, this could mean that businesses will look to reduce their overheads or to maximise profit margins by cutting down on the amount of office space they rent, while also prioritising the impact of happier, better incentivised workforces – an intriguing prospect. However, any process conducted on an exclusively remote footing could arguably diminish the subtle nuances associated with one-to-one consultations (such as eye contact and body language), reduce the importance of team culture and increase the potential for fraud, duress or coercion – you just never know who else is in a room during these conference calls.

Indeed, the sensitive nature of oneto-one legal advice will almost certainly preclude a purely digital approach.

Nevertheless, with greater working flexibility looking likely to play a key role over the coming months, this is definitely a situation to keep an eye on.

Another way in which postlockdown conditions must be seen to impact on the ER sector is in terms of

MORTGAGE INTRODUCER AUGUST 2020

the quality of advice offered to clients, particularly in light of the woeful (albeit minority) practices that have been highlighted by the recent Financial Conduct Authority (FCA) report.

These include incidences of clients being steered towards unsuitable product choices by advisers neglectful of individual circumstances, or who had failed to adequately explore the impact of debt consolidation on finances – a serious issue to be sure. In addition, a lack of supporting evidence for offered advice was also raised in some cases.

The watchdog has nevertheless confirmed that ER is continuing to work “well for many customers” and that the majority of clients are achieving “good outcomes.” Moreover, as David Burrowes, chairman of the Equity Release Council (ERC) pointed out, the number of complaints received by the Financial Ombudsman Service in relation to ER represented a mere 2% of all home finance product grievances last year. The combination of regulatory and ERC standards, as well as the presence of independent legal advice, has been repeatedly proven to offer high levels of protection to customers.

Nevertheless, with post-lockdown uncertainties looking likely to impact consumer confidence, it is imperative that the industry should be seen to root out any evidence of malpractice that could lead to potential harm, or which is predicated on cutting corners.

Research by Key Partnerships has revealed an upturn in the number of brokers prioritising vulnerability work over lockdown, with 26% treating all clients as potentially vulnerable and 13% increasing monitoring, but these figures need to be far higher to ensure that advice standards are improved and clients properly supported.

I am confident that the industry is in a good place to meet the needs and circumstances of clients safely and responsibly, and that the vast majority of advisers are diligent, but this is an area where we simply cannot afford to compromise. Let’s get to it! M I www.mortgageintroducer.com

REVIEW

CONVEYANCING

Stamp duty holiday: The clock is ticking Xxxxxxxxxx Mark Snape xxxxxxxxxxxxxxxx, managing director, xxxxxxxxxxxxxxxx Broker Conveyancing

B

y the time this issue of Mortgage Introducer is published, it will be midAugust; that’s approximately a month after the government announced its changes to stamp duty in both England and Wales, approximately three weeks after Scotland also changed its equivalent property tax, and the same time since the Welsh government decided its changes would only be accessible to purchasers of a main home, rather than additional properties.

As we all know, in this market, and with the stamp duty ‘holidays’ only being available until the end of March next year, time is of the essence.

But why? Surely, just over seven months is plenty of time to ensure a purchase transaction completes and that those concerned can get access to the stamp duty saving the government is making available?

Well, I’m afraid the answer may well be no. Property professionals and practitioners will know only too well that when it comes to completion timescales, our process is pretty much a ‘moveable feast’.

With so many interlocking parts of the chain reliant on each other to get through to the end, all it takes is one part to jam up (even slightly) and we can be into a process of many months, rather than weeks.

So, here’s the big takeaway for advisers reading this and wanting to stress the reality of the situation for their clients wishing to sell or purchase.

The facts of the matter are this: given the average time it takes to get from initial marketing of a property www.mortgageintroducer.com

to completion, an owner would need to have their property on the market essentially by the end of September in order to have the best chance of completing by the end of March 2021.

Which, if you’re reading this on the day of publication, probably gives your clients a little over a month if they want to sell, and perhaps will give those clients who are wanting to purchase before the deadline some serious food for thought about how quickly they need to act in order to secure a stamp duty saving.

“While the end of next March does seem like a long time away, in UK property world reality, it is but a click of the fingers” Add to this the fact that we don’t have a level playing field across all the nations of the UK, and you might understand why the Office for Budget Responsibility (OBR) recently suggested that only 25,000 transactions would be ‘created’ by the introduction of the stamp duty holiday.

Although there are many other factors at play in terms of why that might be the case, perhaps most notably at the moment is the access to mortgage products – particularly at higher loan-to-values (LTVs) – and the question of whether demand for property will be matched by the supply of it coming to market.

In other words, while we welcome the stamp duty changes – particularly as they are accessible to landlords and additional property owners in England, Northern Ireland and Scotland – there needs to be an understanding that while the timescale for completion seems generous, given how long it takes to complete purchases in this country, the clock is already ticking down.

Now, for advisers, the time-sensitive nature of the stamp duty holiday is going to represent a real marketing opportunity, because I have no doubt that there will be many potential sellers and purchasers who will not have grasped the point about completion timeframes and, quite frankly, may need a rocket put under them in order to make their initial moves.

Having a real benefit peg to hang your key marketing messages on is an excellent opportunity, especially (as mentioned) when it comes to landlords and additional property owners who have not had any sort of stamp duty incentive for a very long time.

Those who may well have been considering purchasing over the next couple of years will understand the savings they can make by bringing forward that purchase to within the next seven or eight months, but will need to act almost immediately.

And, of course, there is a message to residential borrowers – or wouldbe first-time buyers – in terms of the positive nature of the potential stamp duty saving, but also the fact that mortgage product choice is not at ‘normal levels’, and is completely abnormal for those who require 90% LTV products and above.

We have seen lenders inching back into this space, but far better to begin that journey right now, rather than wait and see what transpires.

The stamp duty saving may allow purchasers to put more into their deposits, and advisers should be in a prime position to talk them through the options they have if this is a possibility.

Plus, of course, there is likely to be a host of other product needs for all these clients which could make the next halfyear positive in terms of income.

Given what the first half of 2020 has been like, who wouldn’t want that for their business?

So, while the end of next March does seem like a long time away, in UK property world reality, it is but a click of the fingers.

Acting sooner rather than later will give clients the very best chance of completing before that date; let’s not hold back from issuing the message that time is not on their side. M I AUGUST 2020 MORTGAGE INTRODUCER

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REVIEW

SURVEYING

Cash is of the essence for all Steve Goodall CEO, ULS Technology

T

he May statistics from the Bank of England’s Money and Credit survey confirmed a rise in borrowing against our homes, reflecting the opening of the floodgates for tens of thousands of households that had to stall their moves under lockdown.

That said, the same statistics also revealed a newer trend, one that is still in its infancy and yet may endure.

Households repaid more loans from banks than they took out.

A £4.6bn net repayment of consumer credit more than offset a small increase in mortgage borrowing. Meanwhile, approvals for mortgages for house purchase fell further in May to 9,300.

The Bank of England also reported that as well as paying down more debt, households are saving more.

UK households and businesses continued to increase their deposits in banks and building societies in May. Sterling money held by households, non-financial businesses, and financial businesses rose by £52bn, following large increases in March and April.

What does all of this mean for the housing and mortgage markets? There is still so much uncertainty around coronavirus, a possible second wave, the production of a potential vaccine, and the choices for both workers and employers about how they run their lives and operations in this new normal.

Office for National Statistics (ONS) figures showed that since the start of lockdown, almost 650,000 people have lost their jobs.

Even with the government’s furlough scheme in place, further redundancies are assured.

Very sensibly, then, households that can afford to pay down their debt and stockpile cash in reserve are making moves to do just that.

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Banks, and building societies too, are just as cautious. Lenders have curbed higher loan-to-values (LTVs) for the moment, opting quite wisely to see where valuations end up.

Not only are they protecting their own balance sheets, but also overconfident buyers from paying over the odds for properties that may not hold their value.

The stamp duty holiday has already, within just a fortnight of its confirmation, triggered a huge rise in buyer enquiries and mortgage applications, as well as boosting new stock listings.

According to Rightmove, buyer enquiries were up 75% in Britain since the start of July a year ago.

MOMENTUM IS RETURNING

Meanwhile, 44% of new listings that came up for sale in the first month after the English market opened on 13 May have already been marked as sale agreed, compared to 34% for the equivalent dates last year. And the number of monthly sales agreed is up 15% in England on last year.

In the five days after the stamp duty announcement, it jumped to 35% up on the same days a year ago.

Clearly, momentum is returning. The question is how the mortgage market supports this boost in activity.

We have already been told by lenders, struggling to keep up with processing volumes on new applications amid ongoing mortgage payment holiday demand and with staff still working from home, that approvals are going to take longer.

With unemployment the real elephant in the room, lending appetite is going to be more cautious than prospective home buyers might wish – even with the boost to activity as a result of stamp duty changes.

Transactions may take longer in some parts of the value chain, as valuers clear months of backlog, and all businesses continue to be constrained by new ways of working, either from home or in socially distanced offices.

MORTGAGE INTRODUCER AUGUST 2020

That will take a toll on their own incomes, with commissions being paid less frequently. Many have already begun to take measures to mitigate this, and this is where technology can help.

Maximising income means minimising delays and making the process from application to completion much more efficient than it currently can be.

Many high street solicitors continue to deal in paper post and document exchange, leaving transactions at the mercy of the postal service and a person whose desk is likely piled high with paper, and with zero visibility for the broker and their client.

And that’s not even to mention the risk of coronavirus contamination we now face.

Interestingly, brokers are voting against these old ways with their feet.

Our full year results, published earlier this summer, showed a whopping 18% rise in broker registrations across the group, and more than 10,000 cases being conducted through our DigitalMove platform.

“Households that can afford to pay down debt and stockpile cash in reserve are doing just that” We think this is the result of the value it offers – encrypted document exchange and storage, as well as visibility for all parties involved in the transaction process.

The time it saves is dramatic – with transparency comes accountability, and solicitors are picking up their pace when using DigitalMove.

That doesn’t save the entire market from the effect of lower transaction volumes, but it does have the power to improve individuals’ efficiency and service in processing cases – something that every broker out there knows is going to be even more critical for surviving the ups and downs that are likely still to come. M I www.mortgageintroducer.com

REVIEW

EDUCATION

Helping advisers plug the protection gap John Somerville

head of regulatory relationships, corporate and professional learning, The London Institute of Banking & Finance

T

he phrase ‘unprecedented circumstances’ is being used a lot, and there’s no doubt about it – that’s what we find ourselves in. But at a time of economic uncertainty, are UK consumers shunning the security that insurance offers them?

There’s been a steady year-on-year fall in protection policies since 2014 – a trend that’s continuing into 2020, with only 23.7 million protection insurance policies in place in the UK. That’s a staggering 1.5 million fewer than last year. At the end of last year, only half of the UK’s 10.96 million mortgaged households had life cover, while the average outstanding mortgage debt was £131,724.

The truth is many UK consumers are not protected from potentially dramatic changes in fortune – changes that could hit them hard. The problem is compounded by the recent rise in job losses and fall in household incomes.

Last month, the World Bank announced that “COVID-19 has triggered the deepest global recession in decades.” But even before the pandemic, the Department of Work and Pensions (DWP) warned fewer than half of UK households had adequate savings to tide them over, should disaster strike.

Now, for many, disaster has struck.

Britons have never needed financial protection as much, but as a nation we find ourselves exposed to risk, vulnerable and inadequately covered.

So what’s gone wrong? We can all take an educated guess at the reasons why consumers are shunning protection. For one thing, mis-selling www.mortgageintroducer.com

scandals have been a recurring theme of news cycles for at least 10 years – particularly when it comes to payment protection insurance (PPI). As of February, the Financial Ombudsman Service had received more than two million complaints just for PPI. By April, banks had paid out as much as £38bn in compensation.

But it’s not just mis-selling that has tarnished the reputation of financial services. The 2008 financial crisis caused the sector untold reputational damage. Is it any wonder that consumer trust is fragile?

Of course, the vast majority of those working in financial services are as honest as those in any other profession.

PROFESSIONAL CULTURE

Those in regulated advice place particular emphasis on good conduct.

It’s part of our professional culture.

Regulation is inbuilt in our CeMAP training and those who go on to do CeMAP Diploma study consumeroriented advice and ethical behaviour.

But when it comes to insurance, consumers are sceptical, with many believing that even if they buy the right product for their needs, the insurer will find a reason to wriggle out of paying when they make a claim.

The data tells a different story. In 2018, 97.8% of individual claims were paid out – an average of £13m each day for individual life, critical illness and income protection insurance claims.

Where policies didn’t pay out, the most common reason was that the customer had been inaccurate or not disclosed information when taking it out. A good example is the common case of a social smoker who enjoys the occasional cigarette once or twice a year.

These are people who think of themselves as non-smokers and fill out their insurance application forms accordingly. With so many consumers buying insurance online – without

a professional to guide them – it’s no wonder such mistakes are made.

The terms and conditions need to be explained and clarified to save consumers from making these mistakes.

In challenging economic times, cost is also likely to be a big concern for many. Why pay for something you may never need when money’s tight?

This is why consumers need advisers who can explain the risks of being unprotected and the options they have to get the best cover for their budget – who can help them choose a range of policies that work as a package.

There’s an obvious need for more intelligent, granular and responsible insurance advice, but at the moment there’s no requirement for protection advisers to obtain a qualification, and most enter the industry without any relevant training.

Then there are the more vulnerable consumers: the recently bereaved, the elderly and those suffering from long-term health conditions. These consumers value professionalism in advisers, whether they’re releasing equity in their homes to help family or reorganising their finances to secure income for the future.

There are signs, following the pandemic, that some consumers are looking to protect themselves from a major incident that could put their family’s welfare at risk. Perhaps COVID-19 has put things into perspective. But still there’s an urgent need for the financial services industry to reassure UK consumers that we’re on their side. But how?

We could tell them that insurance advisers are required to complete 15 hours of continued professional development (CPD) every year, or explain how well regulated we are, or what we’ve learnt in our training. But nothing is more reassuring to customers than a mark of professional standing.

A dedicated insurance qualification would help all regulated advisers improve and build on their skills. It would give the industry the training it needs to deal with unprecedented circumstances, and most importantly, it would help us win back the trust of consumers, and to reassure the British public that we’ve got them covered. M I AUGUST 2020 MORTGAGE INTRODUCER

37

THE OUTLAW

THE MONTH THAT WAS

THE

Every month, The Outlaw draws some tongue-in-cheek parallels between society at large and a mortgage market in flux

THE THE

AND THE

I

t’s weird. Despite the now five months of hiatus, there is simply too much to commentate on!

Not least the devastating revelation that the centuries-old understanding that sperm swim through the female reproduction tract by lashing their ‘tails’ from side to side is apparently flawed.

Hey, I’m doing what I’m told – I am listening to the science, folks. And the boffins are now saying that sperm in fact swim like playful otters, corkscrewing through the water. So now you know! And there’s so much more to digest… so please forgive a more abbreviated article this month. I don’t want to leave anything out.

And, in a reverential nod to one of the industry’s foremost titans, I’m initiating a new section dedicated totally to our lumbering regulator, entitled “Cock -up, Conspiracy, Carry-On Film, or just Clueless?”

(But more on the idle Financial Conduct Authority (FCA) shortly).

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MORTGAGE INTRODUCER

AUGUST 2020

Israel Folau: Folau your own conscience

www.mortgageintroducer.com

First up. The month’s highlights (with

selected soundbites in parentheses), of which there were thankfully many: 1. Santander and their COVID performance (a model of assured calmness amid the sh*tshow).

2. HSBC (still there at the vanguard; brokers – get over the 8am queues … at least they are lending at 90% – see below!)

3. Platform, another 90% supporter.

4. Nikhil Rathi, new head at the FCA (his early positioning around mortgage prisoners is encouraging, but let’s see).

5. Frank Lampard (an FA Cup loser, but somebody finally told a media-fawning Klopp and his pal to go “do one”).

6. The Motorways Agency (finally upping the 50mph roadworks limit to 60mph).

7. Metro (for appointing the industry’s Red Adair Bob Sharpe to sort its own sh*tshow out… the share price is down 95% from the float!)

8. Our Brexit Team (they’re keeping it schtum, but progress is definitely ongoing and trade deals with Japan and the Antipodean nations are close).

9. Mikel Arteta (who won a trophy despite the sick buckets he was left by each of Arsene Whinger and Dick Emery).

10. Kier Starmer (still flawed, but in bombing out Rebecca Wrong-Daily and other Trotskyites he has shown some nuts).

11. The Dutch nation (for serving notice of its HollandExit unless Brussels stops wasting its money).

12. Black sportsman Israel Folau (for ignoring Lewis Hamilton’s virtue-signalling, and deciding himself whether he ought to bend a knee).

Tadpoles: It’s been a lockdown of love

13. The government (for finally reducing the ridiculous red tape around the UK’s anachronistic planning protocols).

14. ITV (for axing the “I’m far too clever for my own good” Clive Tyldesley. Can fellow irritators, Brackley and Drury be next please?)

To the Bad, and sadly there’s still abundant

content here: 1. NatWest and Halifax (Why are you not allowing better broker-contact? One has really lost its way, whilst the other is possibly being double-agented).

2. Boris Johnson’s ridiculous proposal of free bikes for the overweight (WTF is he smoking?)

3. The broadsheet press for their pathetic reporting of the “£4.50 mortgage from TSB” (based on a furloughed income of £1 – lazy journalism) 4. Bryson Dechambeau, the American golfer (a snarling, robotic freak, devoid of a personality).

5. The Irish government and nation (for rolling over yet again and having the economic p*ss taken out of it by the EU on its membership fees).

6. LBG (fined a whopping £46m for failing over 500,000 clients in difficulty).

7. Police in Leicester (who left those ghastly sweat shops un-investigated through fear of upsetting the PC-obsessed establishment).

Dick Emery: Good Eb-ening

www.mortgageintroducer.com

And let’s not forget the Boring and the frustrating events that featured: 1. Megan “I gave up my Life” Markle and her incessant self-pity (… just what have you done, Harry?) → AUGUST 2020 MORTGAGE INTRODUCER

39

THE OUTLAW

THE MONTH THAT WAS 2. Lenders and surveyors still insisting on physical valuations at ridiculously low LTVs where a desktop would be fine.

3. Nicola “Krankie” Sturgeon, the noisy martinet continuing to politicise the COVID situation (I say give them Scotland its independence NOW! They’d be back within three years once the Euro vanity project collapses).

Which brings us to our inaugural section: Cock-Up, Conspiracy, Carry-On Film, or Clueless, and the FCA’s recent faux

We don’t need expensive, time-consuming inquisitions just to justify a £600m annual budget for an organisation where I am betting NOBODY will be made redundant come November, despite subscribers being collectively 20% to 30% down on their own revenues.

I’ll be seeing you… M I Golfer: Raking in the money

pas, needless intervention, or simple incompetence: A) Its financial surveying of intermediaries seeking cash-flow and balance sheet reassurance. Not conspiratorial, but clumsy. So, let’s see if it then subsequently outs half of the industry’s networks for technically breaching the definition of being solvent? I somehow doubt it.

B) Rumour has it that the FCA has let the nation’s banks and regulated firms know that it doesn’t expect to see share buy-backs, grotesque dividends, or opulent bonuses next year… and yet it will doubtless see fit to remunerate its own bloated workforce handsomely at a time when we still haven’t heard anything about our fees being reduced to account for the shocking service standards at the moment. Crass.

C) Ah yes. The service standards... it still somehow takes 12 weeks just to move one appointed representative (AR) from one firm to another. Just what are all these staff doing ‘working from home’ where the typical weekly commuter saving per FCA employee must be eight to 10 hours?

D) All whilst it wastes our increasingly hard-earnt fees on ill-considered legal cases. If you haven’t already, check out the FCA’s wrongful cancellation of permissions in the case of a firm called Financial Solutions. The Upper Tribunal over-turned its case last month.

Next month I shall assess how I am getting on with three new supplemental income streams I’ve been working on.

The first is a ‘Lend It Out, To Help Out’ initiative of mine. I’m encouraging all 93 UK lenders to offer 95% LTV products between Mondays and Fridays.

It’s had a tough and slow start I’m afraid.

Second, I’m flogging bunker rakes to golf clubs at 99p a rake. They’ll doubtless sell them on to their members at £2 a pop in an effort to improve the shocking state of the nation’s bunkers. (But in truth, it’s been a great summer for golfers, especially those at our top lenders and brokerages!)

And finally, I will set up a three-way Bat phone system between our trade body the Association of Mortgage Intermediaries (AMI), the new FCA gaffer Nikhil Rathi, and the existing saving grace of the FCA, Jonathan Davidson. The latter has been a breath of fresh air and common sense.

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MORTGAGE INTRODUCER AUGUST 2020

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LEAD GENERATION

STAMPING OUT BAD PRACTICE Natalie Thomas looks at the rise of illicit lead generation firms and what the market can do to protect consumers from such businesses

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pportunists are usually waiting in the wings to strike during any crisis situation, and the COVID-19 pandemic is no different.

Over the last few months, brokers have reported a stark increase in dubious unauthorised lead generation firms taking advantage of the new stay-athome and internet-based culture.

Some of these firms have been accused of purporting to be mortgage brokers and contacting potential clients over LinkedIn with misleading and inaccurate claims – such as offers of 0.1% rates.

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FEATURE

LEAD GENERATION While there is no requirement for a lead generation firm to be regulated, there is a requirement for it to be authorised if it steers into the realm of offering financial advice.

There is also a requirement for mortgage brokers to sign off on all financial promotions made on their behalf – such as leads.

This means that a broker who fails to carry out adequate due diligence on any firm it purchases leads from is in danger of falling foul of the regulator.

There was some welcome news at the end of July, though, when HM Treasury published proposals aimed at reducing misleading advertisements.

Instead of every regulated firm being able to sign off on promotions by unauthorised firms, the Treasury is proposing that authorised firms should have to apply for specific Financial Conduct Authority (FCA) approval to be able to do so (more detail on this later).

However, with many brokerages not currently signing off on promotions, or even aware that they need to do so, the success of the new proposals will rest largely on whether the FCA enforces the rules.

Illicit lead generation firms not only risk damaging the reputation of otherwise reputable brokerages and lead generation businesses, but also the standing of the wider adviser industry.

So, what collectively can be done to help stamp out such adverts?

CROSSING THE LINE The availability of face-to-face mortgage advice has been shut down in recent months due to lockdownand social distancing measures, but the need for mortgage and loan advice still exists.

Borrowers who might have visited their local mortgage broker in person a few months ago are now turning to the internet for advice – and for many, this is playing into the hands of potential scammers.

Matthew Arena, managing director of Brilliant Solutions, has received several messages from unauthorised firms over LinkedIn, which he believes are deliberately setting out to mislead.

“They have misleading profiles which cause you to believe they are working in mortgages and other related financial products, and a consumer may get that impression,” he says.

“One profile I looked at had ‘mortgage broker’ endorsed as a skill. It is entirely and deliberately misleading.”

Steve Walker, managing director of Promise Solutions, is also frustrated with the number of bogus firms that have contacted him via LinkedIn. “We are a regulated company and know how hard it is for mortgage brokers to generate business, and how prescriptive the rules and guidance are around financial promotions,” he says.

“As authorised firms we need to be clear, fair, not misleading, and document every promotion we produce. This puts added burdens on regulated → www.mortgageintroducer.com

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LEAD GENERATION firms, depresses responses and increases costs, but we do it because that is what we all signed up for.

“It protects consumers and amongst regulated brokers we are all on a level playing field.

“Recently, there has been a big increase in people or organisations effectively cold-calling consumers offering regulated products.

“These firms and individuals are not authorised and their promotions would not be allowed by any regulated firm. Scratch the surface and you will find a whole industry built on unregulated firms or individuals generating leads without adhering to the rules and exemptions,” he says.

Such firms will often send out personal messages over platforms such as LinkedIn. One example shown to Mortgage Introducer reads: “We are a mortgage advisory…providing cash back when you remortgage or switch and do not charge a fee.”

The company also operates a website, displaying mortgage rates and products, and talks about how its “experienced mortgage brokers” can help.

It does offer the caveat that all of the advisers on its panel are regulated by the FCA, but does not state its own FCA authorisation.

Robert Sinclair, chief executive officer of the Association of Mortgage Intermediaries (AMI), says: “Given the way the firm is holding itself out to give advice about mortgages I believe it should be operating as a regulated business.”

Sinclair says there is a clear distinction between what a reputable lead generation firm does, and the actions of one which poses as a mortgage broker.

“If a firm makes a general statement such as: ‘are you interested in mortgage advice? We can introduce you to a broker,’ that is not a regulated activity.

“If, however, it holds information about products and rates on its website and is offering to work along a broad range of products, that is crossing the boundary into regulated activity,” he says.

Sinclair believes that the market may be seeing a rise in such firms due to advances in technology.

“It is becoming cheaper and easier to create a website that looks really smart and clever,” he says.

Such firms not only risk misleading potential borrowers, but also harm the wider broker community.

“The problem is, the average consumer won’t know the difference between an unregulated lead generator and a legitimate broker who is regulated,” says Alex Hill, head of business standards at Stonebridge.

“So, when the consumer receives poor service or advice from a firm like this, the industry suffers as a whole, as the consumer might think we are all the same,” he warns.

Arena agrees: “The customer’s perception of the advice process could be negatively affected, as well as the reputation of bona fide lead providers.

“There are genuine lead providers working in social media and this casts a shadow on their activities too.”

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Melanie Spencer, head of MCI Mortgage Club, says that projecting the appearance of being a legitimate lead generator is something that is easy to achieve, which makes it hard for potential borrowers to make the distinction.

“Unfortunately, from the public’s point of view, they are unlikely to understand the difference between a reputable lead generator and a sham one, as they are usually responding to an advert or an online form, offering information or help with a mortgage,” she says.

Alain Desmier is managing director of Contact State – which works with lead generators and financial firms to supply data certificates for every lead that is generated, ensuring they are compliant.

Desmier has seen a dramatic increase in websites impersonating insurance firms, and says scammers are also targeting the mortgage market.

“There is a climate now where people are a bit more susceptible to this sort of scam,” he says.

“We have all been sat at home for three months, so there has been a lot more opportunity for people to be misled by online adverts.

“If you type ‘mortgage quote’ into Google, you will discover a lot of people declaring rates they have no business quoting; many of these adverts are not legitimate,” he says.

BROKER BEWARE When it comes to accepting leads from such firms, the buck ultimately stops with the mortgage broker.

Desmier says that in the eyes of the regulator, a broker buying a lead is just as accountable for the content of the lead’s advert as the lead generator themselves.

“It is the mortgage broker who needs to sign off adverts that are being used on their behalf,” he advises.

“In some instances it feels like firms have ignored this and gone ‘OK, I’m just going to buy a lead’.”

The onus is on the mortgage broker to be able to say that they know exactly where that lead has come from.

“One of the big problems is that most brokers have no idea where a lead has come from, because lead generation firms don’t want to share that information,” he says.

Desmier advises brokers to carry out some basic due diligence on the lead generation firms they are working with: “Ask the firm to supply you with the landing pages they are using and show you the advert they have used.”

He adds: “If the Information Commissioner’s Office comes knocking, you need to be able to prove that you had consent to speak to that customer.

“The only way you are ever going to know that is if you know the journey of the lead.”

Sinclair echoes his sentiment: “Brokers should be careful if they are buying from these lead sources that they are not in breach of the rules themselves.”

The FCA’s Mortgage Conduct of Business rules (MCOB) state that a firm must take reasonable steps www.mortgageintroducer.com

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LEAD GENERATION

The FCA proposed changes to financial promotions Alain Desmier managing director, Contact State

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he Financial Conduct Authority (FCA) has proposed a new regulatory framework for the way that financial advertising and lead generation is reviewed and approved in the UK. The proposals will make regulated financial firms directly responsible and accountable for the adverts of ‘unauthorised’ marketing firms that they work with.

This has likely been designed to strengthen the regulator’s oversight and control over rogue lead generators and dodgy distributors of financial products Under the proposals, regulated firms will not be able to work with unauthorised marketing firms unless the regulated firm (the buyer of leads) specifically applies to the FCA for consent to do so.

In that submission they will be asked to demonstrate that they have the relevant due diligence processes required to authorise and control the advertising being produced.

The FCA is trying to achieve the following four things with these proposals: 1. More effective FCA oversight and supervision The FCA knows it is failing to control misleading and fraudulent online advertising,

made clear in the following statement, the honesty of which is commendable: “Currently, the FCA does not have comprehensive information on those firms which are approving the financial promotions of unauthorised persons.”

Fundamentally, the FCA doesn’t know who is generating financial adverts and who is buying those leads.

This consultation is an attempt to intervene before consumers are targeted and hurt by fraudulent companies.

The proposals will essentially make regulated firms liable for the adverts and lead generators that firms choose to work with through increased reporting.

2. More effective prevention and intervention The proposals give the clearest indication yet that the FCA intends to make all generators of financial adverts for regulated products directly authorised, and/or make the firms they sell to liable for the adverts.

It is essentially recreating the appointed representative (AR) process specifically for financial promotions, and it will expect firms to themselves regulate their marketing partners. This is a welcome change.

However, this will only work if the FCA is also going to hold directly authorised (DA) lead generators more accountable for their adverts, landing pages and promotional material. Far too many directly authorised lead generators flout the rules.

to ensure that any information that is communicated to a client is fair, clear and not misleading.

In particular, when approving a financial promotion, firms must ensure it does not contain wording that might create false expectations for a consumer regarding the availability or the cost of credit.

THE NEED FOR ENFORCEMENT Sinclair advises that, where brokers come across lead generation firms which purport to be giving advice, they should take action.

“If people are incensed around [the existence of] such firms, I would motivate them to report that entity to the regulator,” he says.

Hill agrees, and adds that without this kind of reporting, the regulator is less able to do its work and protect the consumer: “For the protection of the industry reputation and to prevent harm to consumers, the FCA www.mortgageintroducer.com

3. Ensuring approver firms have relevant expertise The consultation papers suggest that not all directly authorised firms will be given the required consent to approve external adverts from unauthorised lead generators.

This is significant and seemingly aimed at emerging financial products, or newer subsets of financial products like online protection. Whether the FCA proposals will have the required enforcement to back this up remains to be seen.

4. Improved due diligence The FCA and Treasury are taking aim at shoddy, rogue lead generators within the advertising sector by essentially making it harder for them to be approved, either by the regulator itself or by directly authorised firms.

The wording of the consultation largely accepts that the real problem is the adverts themselves, but the compliance burden will fall on the buyers of leads, not the lead generators. A lot of the ‘new’ powers that are being asked for already exist, the FCA has simply failed to enforce its own rules Until now, the FCA has largely ignored that ‘unauthorised’ lead generators even exist. When challenged about misleading mortgage or insurance advertising, it will often point the complaint towards the Advertising Standards Authority as the appropriate regulatory body for adverts ‘outside their scope’. This consultation is a step forward into the real world.

should be acting promptly to ensure these firms are not operating in an improper manner; however they can only act on what they know.”

Indeed, Walker questions whether a lack of action on the part of the regulator is down to a lack of this kind of reporting by brokers.

“Whilst the FCA has a whistle-blowing procedure, little is heard about fines for unauthorised firms, so I question if brokers bother reporting them and consumers wouldn’t even know.

“Hopefully by raising this as an issue we can see greater traction and positive action in reducing this activity and potential detriment to consumers and the intermediary industry,” he says.

Spencer argues that while the responsibility rests with the broker, the regulator also needs to show its power.

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LEAD GENERATION these leads are dodgy, if the broker hasn’t carried out due diligence then they are open to fraud.

“Therefore, the brokerage could be putting itself as risk, and, worst case scenario, lose its licence to advise,” she says.

“If a lead company is pretending to be a broker when it is not, then the FCA should clamp down hard.

“Brokers are FCA-authorised and the lead companies are not, therefore it should not be possible for a lead company to pass itself off as looking like a broker, without some form of sanction.”

When asked about such firms, the FCA told Mortgage Introducer it cannot comment on individual businesses, but that: “Any unauthorised firm carrying out regulated activities would be of concern to us.”

ACTION STATIONS While HM Treasury’s recent proposals should in theory make it harder for unauthorised financial promotions to be signed off, the success of the scheme will rest on FCA action.

“I ran a lead generator firm for seven years and to my knowledge the FCA has never audited a marketing firm,” says Desmier.

“Until this starts happening, such firms will carry on because they think they are not getting caught.”

As with most things, Desmier puts the lack of FCA action down to resource constraints.

“It’s always resources – there is high multi-million pound crime happening and that takes priority – which is wrong.”

“The people who really lose out are the vulnerable customers, because it is likely that those are the ones who are searching for ‘bad credit remortgage’ and having their details hawked around,” he adds.

In an ideal world, Desmier would recommend that the FCA insist all firms that generate leads are regulated.

Spencer believes these companies exist because, in many cases, they are exploiting a gap in the market or a perceived need among consumers.

She suggests, then, brokers should look at entering the same space as the scammers, in a bid to push them out.

“Brokers can effectively combat these rogue generators by pushing themselves into that same gap and offering their services directly – by using good marketing, retention, onboarding and referrals,” Spencer says.

“It can require clever advertising and thinking not simply as an advice firm, but as a business. There are cost-effective and targeted ways that brokers can gain new leads through old and new techniques which are fully FCA compliant.

“These will ensure that the start of the advice journey ends in a great client outcome,” she says.

Arena argues that platforms, such as LinkedIn, which are increasingly being used as a medium for these scammers, also have a part to play.

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“LinkedIn needs to work at this,” he says. “It certainly damages the experience. It is simple enough to not connect once you spot the pattern, but many will not, and the cross-connections across the industry make the profiles even more misleading as they lend a false sense of social proof.

“LinkedIn should have the ability to report unauthorised activity, and at worst stop their ability to message people whilst they investigate the account.

“I have gone through the process of reporting and removing any such connections, but there is so little ability to explain what is going on and why they should be removed,” he says.

“The regulator is in a difficult position as it is hard to do more than it does in this space; the onus is on the recipient to do the due diligence on the lead source, so hopefully this new trend will soon end as brokers do their due diligence and the model fails.

“If that does not happen then either brokers are not doing their job here or, as is more likely, they are also being misled,” he says.

THERE IS STILL A PLACE FOR LEAD GENERATION So what of the future of lead generation? Is there still a place for it in the mortgage market?

Hill believes there are high quality lead generation sites out there doing things in the right way – offering a good source of business to brokers.

“A genuine lead generator will be transparent about its role and will give no illusion that it is giving advice, as well as holding the appropriate Data Protection Licence,” he says.

“As such, it will be fully compliant with the FCA handbook in terms of any advertising material it produces and will not stray across the perimeter into giving advice.

“With its full consent, consumers will be correctly passed to a genuine broker at the correct point early on in proceedings, and as such will be afforded the oversight of regulation, access to the Financial Ombudsman Service and protection of the Financial Services Compensation Scheme.

“Lead generation firms which pose as brokers will give consumers no such protection,” he warns.

Desmier also believes there is still very much a place for lead generation: “There are some brilliant lead generation businesses out there, and the mortgage market depends on them for business.

“If a broker buys a lead from a misleading firm, they are taking hits away from legitimate lead generators who want to do a good job, and they are actually making it more expensive for legitimate lead generation.”

He concludes: “Lead generation is a brilliant, powerful tool that helps brokers access the internet, which is why we need to stamp out this misleading advertising.

“If the FCA were to enforce the rules it would create a much more level playing field.” M I www.mortgageintroducer.com

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THE RISING ROLE OF LATER LIFE LENDING Ryan Fowler covers the key points raised at Mortgage Introducer’s recent later life round table, which looked at the role of later life lending in the evolving marketplace

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t has been a strange few months for the entire property finance sector, and the later life lending part of the market has been no exception.

Businesses across the sector have had to adapt to the new normal that has developed in the face of the ongoing COVID-19 crisis.

Volumes dropped dramatically during the height of lockdown, and to add to it all, in June the Financial Conduct Authority (FCA) fired a warning shot across the sector’s bow.

The regulator raised concerns about the quality of advice in the sector and warned that it must improve its standards.

But as with everything, there are two sides to the story. With an ageing population and both local and national government facing the prospect of huge deficits, the role or later life lending has never been more vital.

Mortgage Introducer’s Ryan Fowler sat down with representatives from Key Group, Canada Life, Legal & General, Air Group, more2life, Hodge and Equilaw to get their takes on COVID-19, the regulator’s assessment,

and the long-term prospects for later life lending.

The transition to home working and remote advice was not an easy one for many businesses; with an older client base, the use of tech created additional challenges for the later life sector.

Stuart Wilson, CEO of the Air Group, said the market had been compelled to adjust in a number of ways to cope with the challanges created by the crisis.

ADAPTING TO CHANGE “The market made great strides to adapt to the changes caused by COVID over the past few months,” he says.

“We’ve seen three distinct types of changes: we’ve seen product changes, consumer changes and adviser changes.

“Advisers especially are changing in a number of ways and we’re now seeing a large amount of new advisers come into the sector. Unfortunetly, we have also seen some redundancies. However, activity is now back to, if not more than, what it was pre-COVID. “That suggests that advisers have adapted brilliantly.

They’re now using and embracing technology which has helped with the move away from face-to-face advice.”

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COVER Indeed, many businesses have now split their processes between face-to-face meetings and ones over digital platforms such as Zoom. But is that change one that is here to stay? Wilson thinks so.

“In the long to medium-term I think we’ll see this move towards technology continue whilst also pushing on into the lender space.

“There’s still a long way to go but the movement is in the right direction,” he says.

Will Hale, chief executive of Key, agreed that the market had managed well with the unexpected changes it has been faced with.

He says: “I think the the sector has been remarkably resilient. We have continued to serve customer needs from an adviser and the lender perspective.

“I think the the sector should take great deal of credit and pride in that.”

The work of the Equity Release Council (ERC) and solictor firms in helping businesses adapt to the changes has also been praised.

Despite the praise, completions have been – as you would expect – slow over the past three months; however, like Wilson, Hale now thinks the market is on an upward curve.

“We’re starting to see some green shoots,” he adds.

Matthew Taylor, relationship manager at Equilaw, says the market is now seeing a steady recovery following the gloomier months of lockdown.

Equilaw was one of the businesses which worked closely with the ERC to build the guidance for nonface-to-face meetings with clients.

Taylor explains: “We developed the process with the ERC around stay-at-home legal advice. It allows us to add in layers of protection around capacity and vulnerable clients.

“We are in a different world, and things are taking quite a lot longer than they were before.

“One of the challenges we need to find a solution to is educating brokers as to how to make sure that the client journey is as smooth as possible whilst managing expectations” MATTHEW TAYLOR

“I think we’ll see this move towards technology continue whilst also pushing on into the lender space. There’s still a long way to go but the movement is in the right direction” STUART WILSON “One of the challenges we need to find a solution to is educating brokers as to how to make sure that the client journey is as smooth as possible whilst ensuring that expectations are appropriately managed.”

Chris Flowers, head of intermediary sales at Pure Retirement, adds: “Firms really need to look at their processes and understand what drives customer interaction, and what we can do better to make sure we are engaging with the end customer.”

TECHNOLOGY Almost everyone in financial services will have faced their own operational challanges around implementing an increased use of technology within their business.

The later life sector has been no different, and as a result lenders have been forced to withdraw some products from the market over recent months.

Despite that, Ryan Davies interim managing director of mortgages at Hodge Bank does believe that the lessons learnt from this period will be beneficial to the market in the long term.

He said: “Obviously there have been significant operational challenges, but I think that as we move forward it will be positive for the industry.

“Lenders and advisers have come to realise the importance of technology, and having processes which are online and allow people to work from home and talk to their customers remotely.

“If we do experience anything like this again, for instance a second wave or a regional lockdown, I think businesses will be much more prepared.”

Stuart Wilson agrees: “Broadly speaking I think the adviser community has embraced the technology very, very well.

“In times of crisis, things tend to become turbocharged from an evolutionary point of view.

“From an efficiency point of view, pre-COVID →

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“Firms really need to look at the processes and understand what drives customer interaction and what we can do better to make sure we are engaging with the end customer” CHRIS FLOWERS some of the systems in place in the market were pretty clunky and quite laborious.

“But this has made us all stand back, take a rain check and improve processes.

“Processes that in some areas have now been, in certain cases, compacted down to hours instead of days or weeks.

“We’ve got to take those things forward once COVID-19 is over, and make sure we don’t drop the ball again.”

Will Hale points to technology as being the enabler that helped the sector to keep functioning, and agrees that innovation needs to remain long-term.

He adds that the consumer must be at the heart of that evolution.

“We need to be very focused and ensure that when we adapt our business models going forward it is done with the customer outcome in mind,” he says.

“The use of Zoom over this period for us, for example, has been fantastic with customers; it has really allowed us to involve family in the process where, even in a normal situation, that might have been difficult with a physical appointment.

“However, I think that for the vast majority of customers, it’s difficult to replace face-to-face interaction, which is of so much benefit for them in terms of building empathy with the adviser and really understanding the nature of the transaction.”

Les Pick, head of sales, equity release at Canada Life, agrees that technology has a role to play in advice.

“I think it’s just important that the sector takes the lessons out of this situation, because it would be easy to revert back to exactly the way that we were working before,” he says.

“As a industry, we can be more efficient and we could also be faster.”

One of the other benefits that has arisen for many

from the move to home working is the increase in professional development options and engagement.

Numerous lenders and adviser firms have been running educational and development progammes to help those engaged in the market stay on top of ongoing developments.

Marie Catch, head of broker sales at Legal & General Home Finance, highlights this as one of the areas where firms have been able to add demostrable value to their stakeholders.

“We’ve been, and are, running a number of webinars with experts to help people get an idea of what we and others are thinking at this time,” says Catch.

“Technology can be used to create a really strong development package, to help advsiers become more knowledgable and to keep up to speed on the latest changes in the sector.”

However, Matthew Taylor of Equilaw has a slightly different take on the use of technology.

“When it comes to the legal advice it’s actually not been hugely efficient, and hasn’t been the golden bullet that some advisers perhaps thought it would be.

“The fact that clients still need to find an independent witness to witness the mortgage deed means they need to involve someone that’s not a family member to actually watch them sign the paperwork.

“We’ve also had ssues with paperwork being completed incorrectly, and also with documents not making their way back to us in a prompt fashion.

“For the vast majority of customers, it’s difficult to replace face-to-face interaction, which is of so much benefit for them in terms of building empathy with the adviser” WILL HALE “So, whilst we’ve we’ve developed some new ways of doing things and saved some time with processing remote legal advice, the process probably hasn’t changed in the way everyone’s thought it would do to begin with.

“With that in mind, we are looking at hybrid models and are carrying out face-to-face meetings in gardens,

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THE FCA REPORT The Financial Conduct Authority recently highlighted areas of concern it had regairding the secctor.

The regulator raised concerns over unsuitable equity release advice after a review found some mortgage advisers were falling short.

It said its work in the equity release market had uncovered mixed results, as there were also cases in which lifetime mortgages were working well and unlocking equity for consumers who could not afford traditional mortgages.

Stuart Wilson of Air Group called this report a wakeup call for the market, but noted that there was big differences between advisers.

“We need to look at this with pragmastism,” he continues. “There are excellent standards of advice in some areas of this sector. Let’s not chuck the baby out of the bathwater here.

“The report has highlighted some key issues and I think most of us would accept they were very relevant.

“But I think what it actually reflects is the fast moving pace that this sector has developed in the past three or four years especially.

“What we are doing needs to keep improving and learning never stops.”

Will Hale adds that this is not a time for the sector to rest on its laurels.

He says: “I don’t think any of us can afford to be complacent and think that the feedback doesn’t apply to us. I think it applies to all of us, and this should be taken as a serious wake-up call.

“There are a lot of good practices that exist in the market, but now is the opportunity for us all to step back, take this warning shot from the FCA very seriously and make sure we are seen to take decisive action to address some of the gaps that exist.”

Canada Life’s Les Pick agrees, and adds that now is the time to show the best practices that the market has to offer: “The sector has an amazing opportunity to showcase exactly how good it can be.

“Over the course of the next year, we were going to be in a position to be able to support many, many families through this crisis and what will be probably be a nasty recession on the back of it.”

Ryan Davies concludes: “Holistic advice is key here

to ensure that when a customer walks in the door, they get the right and best products available to them, and the right advice.

“Let’s focus much more on on outcomes and delivering the right customer outcomes.

“For me, that’s definitely the right step, and a step in the right direction.”

“Technology can be used to create a really strong development package to help advsiers become more knowledgable and to keep up to speed on the latest changes” MARIE CATCH THE ROLE OF HOUSING EQUITY IN CARE Over-55s are increasingly looking at property wealth to fund later life care, and with councils and government set to face huge deficits post-COVID-19, this looks to be a trend that will only increase.

With a quarter of over-55s having said recently that they do not know how they will meet the cost of care, how important will housing equity be moving forward?

Will Hale says it will have a major role.

“There has been a real change in customer perceptions, and they are realising that they will need to self-fund some aspects of care.

“With pension provisions unlikely to cover the costs, housing equity has a huge role to play.

“It’s not just residential care, but also care at home which has a massive sociatial benefit. Equity release can help with adapting properties and paying for regular care provision at home.

“As an industry, we have to do more to promote this as an option to borrowers.”

He adds: “We’d also like to see more lender innovation in this space, as we feel this will be a big part of the market in the future.”

One lender that already has a provision for care is Canada Life.

Les Pick explains: “Our drawdown products have large reserve facilities which can be used for care in the home. If someone has to go into long-term care, however, they are often forced to sell their home. →

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“I think it’s just important that the sector takes the lessons out of this situation because it would be easy to revert back to exactly the way that we were working before” LES PICK “We have a buy-to-let product which caters for that situation and allows the family to benefit from that property wealth in the years to come.

“However we’d call on advisers to let us know if they see a way to further innovate in this part of the market.

“We are a lender that wants to help.”

VULNERABLE CLIENTS One thing that the COVID-19 pandemic has shown is just how quickly a client’s circumstances can change.

This, in turn, has served to higlight the importance of regular vulnerability assessments when dealing with older borrowers.

But what can firms do to ensure the best outcomes for these customers, and what risks and challanges face the market when it comes to dealing with potentially vulnerable clients?

Equilaw’s Matthew Taylor says one of the main reasons his firm is still trying to maintain face-to-face visits is to ensure it has the best possible chance to identify vulnerable individuals.

“The big risk of doing everything remotely, is that no one has been in front of the client to delve into any capacity or duress concerns,” he says.

“The face-to-face meeting allows these concerns to come to the surface, and also gives clients the opportunity to speak to us with no other parties present.

“This obviously can’t be said for remote meetings (video calls), where family members and third parties can easily be present and hidden from view.

“We have created several extra steps into our processes to help identify and protect vulnerable clients, particularly around completion or when funds are being gifted.

“I can only see this taking on more importance as we continue to move out of lockdown, and the opportunity for fraudulent applications rises.

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THE FUTURE Finally, where is the market heading? Is the sector anticpating a rapid recovery?

Taylor thinks so: “I think we are going to see a very busy second half of the year.

“Access to capital is going to take on even more importance where parents are looking to support family members post COVID-19, or where they look to maximise how they enjoy their retirement,” he says.

“I think brokers need to understand that we are in a different environment compared to pre-lockdown, we have new challenges in the legal sector and cases are going to take longer to complete.

“Working with advisers to improve their understanding of current ‘hot topics’ will not only help to manage client expectations, but will also improve the overall client journey.

Davies concludes: “As the government’s Job Retention Scheme ends, unemployment rates are set to increase. Parents, grandparents and other family members will look to support their family members through this difficult time, whether that be propping up their income whilst they look to find a job again, or providing a financial comfort blanket to help get through this period.

“Releasing wealth from your property will be one of the ways families provide that support coming out of this crisis.” M I

“You could have the best vulnerability assessment process in the world but if you aren’t going to do anything off the back of the assessment it’s waste of time” RYAN DAVIES MI

Our customers rate us excellent at 4.9 out of 5

Mortgage Introducer Roundtable 180x29mm.indd 5

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Ryan Davies of Hodge says it is all about having strong processes in place throughout.

He says: “Vulnerability assessments are great and need to be in place to help lenders and advisers identify potential vulnerability, but you could have the best vulnerability assessment process in the world but if you aren’t going to do anything off the back of the assessment, it’s waste of time.”

MORTGAGE INTRODUCER AUGUST 2020

30/07/2020 17:05

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Source: Key Group Market Monitor Full Year 2019

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LOAN INTRODUCER

SPOTLIGHT

Long-term thinking Loan Introducer catches up with Gavin Seaholme, head of sales at Shawbrook Bank, to discuss what he thinks the lasting effects of COVID-19 will be on the second charge market Are you seeing a strong demand for second charge mortgages?

Yes, we have still seen demand in the second charge space and we are proud that we have been able to continue supporting the market despite the challenges faced.

Unfortunately though, not many industries will come out of the pandemic completely unscathed and the second charge market is no exception. The impact on employment status has of course affected demand and as a result we have seen some compression, with some lenders having to reduce their product offering or move away from the market altogether.

Have there been any surprises during lockdown in terms of what you are seeing demand for?

We have seen an increased demand for home improvement loans.

With families spending more time indoors and working from home, customers are looking to create more space rather than move, adding value to their existing property.

Alongside this, the demand for debt consolidation has been strong, as customers have reflected on*** their finances and used this situation as an opportunity to restructure their debt.

Do you expect lending volumes in the second charge market to recover?

Yes we do, although it is difficult to say how quickly. It may be a considerable time before volumes go back to pre-pandemic levels (which peaked at £100m-plus per month). With first charge mortgage rates at an historic low, there are clearly a lot of challenges and much uncertainty facing the market. We should have a better understanding of what the mid-term impact will be as we move through next quarter and into Q1 2021.

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It is positive to see that our broker community remains optimistic.

More than two thirds of the brokers who completed our recent Broker Barometer reported that they are confident about the lending environment as coronavirus restrictions ease, and almost half (45%) told us they were confident about business growth. This optimism and resiliency is key to the market right now.

Going forward, how do you think COVID-19 will change the second charge market?

The second charge market needs to align itself more with the first charge market in terms of technology and systems. Lenders should look towards investing in technology to do the heavy lifting and streamlining processes to improve the journey for their customers – both key areas of focus for Shawbrook.

The impact of the pandemic on the smaller second charge market may be long-term, so lenders need to adapt and evolve their offering and appetite accordingly.

What do you feel are some of the hurdles for the second charge market?

There will be a short to mid-term issue around supply and demand as, although demand is likely to remain, lenders will need to quickly adapt their offering to suit the new environment. First charge mortgages are at historically low rates, and even with the low rates available in the prime second charge market, a remortgage may well be a better option.

The other issue will be around customers’ ability to borrow after utilising things like payment holidays and experiencing financial pressures that may have created ‘credit blips’. Credit profiles could look very different to the pre-COVID picture. Another factor will also clearly be the change in individual working circumstances, and the impact this has had on financial status and employment. M I www.mortgageintroducer.com

Making it personal When you were young, what was the job that you aspired to do as an adult?

When I was growing up I wanted to be a footballer, a goalkeeper to be exact.

Is there something about yourself that people would be surprised to hear?

Probably that I am absolutely terrible at golf, despite my constant attempts.

What would you say is the best bit of advice you have ever been given?

Don’t worry about what you can’t change. I think that is a good bit of advice for everyone.

What is your most prized possession (aside from your family)?

If i had to choose it would be my first signed Arsenal football from the 1989 season.

Gavin Seaholme

www.mortgageintroducer.com

AUGUST 2020 MORTGAGE INTRODUCER

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SPECIALIST FINANCE INTRODUCER INTERVIEW

BRIDGE-TO-LET

Bridge-to-let: Flexibility with certainty Barry Searle managing director of mortgages, Castle Trust Bank

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he Stamp Duty Land Tax (SDLT) holiday has presented investors with a window of opportunity to reduce the entry cost of a property investment; as such, it has created a flurry of activity, and a very competitive property market.

In such a market, the ability to move quickly can be the difference between securing a property and missing out; with many buy-to-let (BTL) lenders

“With bridge-to-let, your clients are able to take out a bridging loan for the shortterm, with pre-agreed terms for a longer funding solution in the future. This means that they can use the bridging finance to buy, refurbish or convert and then switch over” taking longer to underwrite cases, some investors are turning to bridging finance to give them a competitive edge.

Bridging provides investors with a lot of freedom. It can be fast and flexible, and it can be used to finance the purchase of properties that require some work, which might make them unsuitable for a standard mortgage.

But it can also be uncertain and, in the current environment, investors may have concerns about their ability to refinance a bridging loan onto a BTL mortgage in six to 12 months’ time.

There is, however, a solution that can provide your clients with the www.mortgageintroducer.com

flexibility of bridging finance with the certainty of a longer-term buy-to-let mortgage. It’s called bridge-to-let, and it combines the most desirable features of bridging and term lending.

With bridge-to-let, your clients are able to take out a bridging loan for the short-term, with pre-agreed terms for a longer funding solution in the future. This means that they can use the bridging finance to buy, refurbish or convert a property and then switch over to the longer-term funding when it is ready for tenants. Some bridge-tolet lenders can also factor in the value uplift resulting from any renovations when it comes to agreeing the terms of the buy-to-let mortgage.

Bridge-to-let is particularly popular among investors who want to maximise their returns by purchasing a property that requires some work in order to make it fit for purpose, carrying out the work, and then letting the property.

Here are some examples where bridge-to-let could benefit your clients: LIGHT REFURBISHMENT

Light refurbishment is the term used for a property renovation that requires no planning permission or building regulations, and where there is no change of use to the property.

Light refurbishment renovations commonly include a new bathroom, a new kitchen, redecoration, rewiring or new windows.

It is a good way of adding both capital and rental value to the property, without having to undergo significant structural changes.

With a light refurbishment bridgeto-let mortgage, a landlord can take a bridging loan to purchase the property and carry out the required renovations, before switching to a buy-to-let mortgage at the higher value – small changes can deliver big profits.

For example, according to research by the Federation of Master Builders

and the Home Owners Alliance, removing an internal wall to create an open plan kitchen-diner can cost less than £3,500, but add more than £48,000 to the value of an average home in London. Converting a cupboard under the stairs into a downstairs toilet can add nearly £27,000 to the value of an average home in Surrey. And kitchen improvements such as new flooring, worktops and cabinet doors can cost just over £4,000 to complete but could add more than £26,000 to the value of an average home in Dorset.

The key for investors is to target their renovations correctly to meet the demand of the local market.

FIRST-TIME AND PORTFOLIO LANDLORDS

As well as situations where investors want to carry out work on a property, bridge-to-let can deliver a solution for both first-time and portfolio landlords, particularly if their circumstances don’t initially fit the requirements of a buyto-let lender.

With bridge-to-let, the investor benefits from the flexibility of a bridging loan upfront, which may help them to overcome some criteria hurdles. This flexibility is then combined with the peace of mind that comes with knowing there is a readymade exit for this bridging loan, with a buy-to-let mortgage already in place for the longer term.

Bridge-to-let is a straightforward process that can provide investors with more flexibility and greater peace of mind than separately sourcing a bridging loan and a buy-to-let mortgage. The certainty provided by the follow-on funding once the bridging facility ends can help to give less experienced landlords the confidence to make their move.

Today’s market is particularly susceptible to change, making it even more difficult to plan for funding options. Bridge-to-let gives certainty in an uncertain world, and enables landlords to make longer-term plans for their investments without carrying the risk of being unable to secure funding at the right price once the bridging facility comes to an end. M I AUGUST 2020 MORTGAGE INTRODUCER

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MARKET

What’s in store post COVID-19?

Steve Seal managing director, Bluestone Mortgages

M

ore than 150,000 people have been made redundant, nearly 800,000 small businesses could be on the brink of collapse and almost three million self-employed workers have relied on government support to help them get by – all as a result of the COVID-19 crisis.

While government measures have helped to provide certainty in the short-term, the long-term picture could look very different. Many of those who have been placed under huge financial strain could struggle to keep up with payments for their credit commitments – something which could end up

damaging their credit profile.

One significant impact of this, which some people might not initially appreciate, is that customers could be rejected for high street lending in the future, even if they are perfectly eligible for a loan. Mainstream lenders typically rely on automated models that are geared towards ‘vanilla’ borrowers when assessing applicants, so customers with a gap in payments may fall foul of their strict lending criteria.

Specialist lending will, therefore, be an even more crucial part of the mortgage market going forwards.

‘Non-vanilla’ customers – potentially numbering in the thousands – are going to be key to the recovery of the housing market in the months and years to come, but only if they are able to access the lending they require.

This presents a perfect opportunity for the specialist market to reinforce its values – particularly among brokers.

Advisers are in a prime position to reassure customers that the tailored and ‘common-sense’ approach of a specialist lender might be the solution they need.

As such, now is the time for the specialist market to provide advisers with the knowledge and resources they need to support borrowers who could benefit from personalised lending.

Ultimately, greater support for brokers will result in greater support for customers. Even before COVID-19, advisers were already playing a huge part in improving consumer awareness of the specialist market, and they will continue to do so long after the pandemic subsides.

With both sides working together, the thousands of people who emerge from this crisis in a worse financial position than they were before will be able to secure the financial certainty they need and deserve. M I

COMMERCIAL

Opportunity for the self-employed Hisham Elabaire commercial finance specialist, Brightstar Financial

W

here there is change there is always opportunity, and we have certainly seen a huge amount of change in the lending and property markets in recent months as a result of COVID-19.

One such trend has been the smooth transition to home working for millions of people across the country, leading many to speculate that, when people do fully return to offices, they will not do so at the same scale as previously.

It is unlikely that most businesses will do away with their offices entirely,

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but many will probably take a more conservative view on the amount of space they need. With reduced demand for commercial space, this should put downward pressure on property values, and this presents an opportunity for your self-employed clients who currently rent their workspace.

Even before lockdown and the en masse shift towards home working, it was generally considered that owning a commercial property was the cheaper option than renting one, and certainly one with more potential to contribute to the overall financial strength of the business. So, now with potential deals to be had, it’s a great opportunity for your self-employed clients to take the leap, and it’s not just offices.

Commercial mortgages are available for trading businesses that want to

MORTGAGE INTRODUCER AUGUST 2020

purchase or refinance their own premises. They can cover a variety of property types such as retail units, offices, factory units or any commercial premises used by the business.

The maximum loan amount is normally 75%, but in some circumstances up to 100% may be possible for a selection of professionals or with additional security. Interest rates start from around 2% over the base rate and lender fees from 1%.

Repayment loans are typically over 20 years, but interest only facilities can be arranged. The funds can be borrowed in personal names, limited company, pension fund or trust.

So, why not start a conversation with your self-employed clients, to discuss whether they want to grab the current opportunity to purchase the commercial premises. M I www.mortgageintroducer.com

SPECIALIST FINANCE INTRODUCER INTERVIEW

DEVELOPMENT FINANCE

Filling the gaps in the market…

Brian Rubins executive chairman, Alternative Bridging

D

evelopment finance was traditionally the product of the high street banks, but as they became less open to new customers, this created a gap for the challenger banks and bridging market to fill.

As some have found to their cost, development finance is not as simple as it looks. But for those intermediaries who have the skills to analyse the planning, construction and sales risks, and identify the funds to lend, there is an immense opportunity to create continuing relationships.

Understandably, lenders’ product offers are driven by funding availability and so if the wholesale funder is not authorised, and many are not, the bridging lender will not have the funding to offer regulated loans. In turn, the broker needs to be authorised, or to work with one who is. Accordingly, regulated loans offer another gap in the market. Great opportunities exist for regulated development or refurbishment loans, facilities for borrowers who wish to construct or extend a property they have previously occupied or where they plan to do so on completion of the project. To offer these facilities, the lender first needs authorisation and then the skills to manage a construction loan. Not many have both. Suitably authorised lenders can offer a facility to finance the construction as well as a loan for

the purchase where the property is not already owned, or a loan to repay an existing mortgage where it is, and the total loan can be up to 100% of cost, providing that remains within 65% of end value. Not many lenders operate in this market, even though borrowers are often high net worth, with a team of professional advisers and a reliable contractor to ensure the project runs to plan.

At Alternative Bridging, we identified more than a gap – a great big hole – when we introduced our overdraft product, a facility which enables borrowers to establish a maximum loan secured by an underutilised asset, against which they can drawdown and repay, time and time again. It is ideal for developers and property dealers as well as the business community providing on-call loans, with interest paid only on the balance outstanding. The short-term lending market is innovative and will keep identifying opportunities, gaps in the market to fill. While the market is in turmoil, learn the skills, fill the gaps and enjoy the rewards. M I

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AUGUST 2020 MORTGAGE INTRODUCER

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SPECIALIST FINANCE INTRODUCER

FIBA

More benefits than ever from our partners Adam Tyler executive chairman, FIBA

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e have wanted to begin to roll out more exclusive arrangements from our lender partners at the Financial Intermediary & Broker Association (FIBA), and these have now started to gain momentum. The following is a great example of what we have been working on in the last few months on your behalf.

FIBA held one of its popular webinars, with more than 70 attendees tuning in to listen to me talking to Scott Marshall of Roma Finance on 1 July.

We discussed Roma’s new ‘Customer for Life’ proposition, which is being offered exclusively to FIBA and SimplyBiz Mortgage Club members.

The product effectively offers a three-stage funding package for people wishing to buy a property with development potential via a short-term loan, a development loan to do the work and then a longer-term mortgage designed for the property to be rented out on a buy-to-let (BTL) basis.

This new product simplifies what can be a drawn out scenario, and provides a solution that is simple to explain to clients and easy to administer.

Not only is it a perfect addition to the armouries of existing FIBA members, but it lends itself to providing an easyto-follow proposition for other brokers seeking to consider specialist finance.

At FIBA, we want to be able to assist our members and those who are always looking to make commercial type loans more accessible to their businesses.

This ‘Customer for Life’ proposition goes a long way to remove the idea that commercial finance offers a number of different hurdles, as the need to switch types of funding becomes more

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AUGUST 2020

simplified. There are any number of our lender partners that are keen to help those who want to know how to remove the knowledge barriers that can keep brokers and advisers from helping their clients when faced with a project with different elements.

There are, of course, many other ways to make the world of specialist finance easy to access, and many of our commercial finance colleagues are happy to help.

LENDER PARTNERS

Apart from finalising plans to set up a referral system for residential mortgage advisers with FIBA members on a shared basis, we will also be announcing more initiatives with our lender partners.

This will be to further assist in the specialist finance sector and expand FIBA membership to attract more commercial specialists and those advisers who want to extend their offering to specialist finance.

One of FIBA’s aims is to make commercial and semi-commercial an attractive business area for our intermediaries to build upon and grow their knowledge and experience.

MI

FIBA TV going from strength-to-strength A fter the success of the first two series of FIBA TV interviews, which were filmed with a professional videographer, we unfortunately could not continue in the same vein due to lockdown, much to the disappointment of our lender partners.

However, we couldn’t let it rest, as there was so much happening, so we had a great few months recording FIBA TV at Home.

We currently have six more to release, and a number in the diary to film, and have moved from one-on-one to group discussions.

In another change of format, I have had questions asked of me, and we have new appearances from individuals with different views, including one from LendInvest. We have also been delighted to feature Adrian Maloney and Interbay Commercial, exploring their latest product range.

But it doesn’t stop here. There are plenty more to follow, in a format that delivers a concise, informative, and sometimes humorous look at what we have to offer at FIBA through our lender partners. www.mortgageintroducer.com

We are delighted with the government’s decision to allow exhibitions to take place in England from the 1st October 2020: Perfectly timed for MBE London on 20th October

ALREADY CONFIRMED: • Bank of England Keynote • CPD seminars • New venue: Business Design Centre with measures to ensure your safety & comfort • Leading lenders and service providers in a safe face-to-face environment • Clarity on which products and services are still available, plus what’s new to the market

Key safety measures are in place to limit numbers in the venue, according to government guidelines, register now for morning or afternoon

mortgagebusinessexpo.com The only financial intermediary Expo committed to a date in 2020

20th October 2020, The Business Design Centre, London

COUNTRY IN CRISIS

FRONTLINE

From the frontline

Iquam nocum amqua pripimpl. Deconsit; ia moveheb atius, escritam nonsu conderf ercesenis vit, qui pro vividem ovehenatam a publii The stories impacting the industry during the coronavirus crisis

Hodell joins Rugby against Cancer for Trek 2 Twickers

H

arry Hodell, director of Pure Structured Finance, has linked up with charity Rugby Against Cancer for its Trek 2 Twickers walk.

Having had to halt its efforts due to the coronavirus pandemic, Hodell will join the charity as it walks from Portsmouth to Twickenham, the home of English Rugby.

The charity was set up to aid the family of people in the rugby community who have been diagnosed or affected by cancer, who need financial help to make their situation a little bit easier to deal with.

The team aims to complete the mammouth 71-mile walk in a target time of 26 hours. They had intially set a target of raising £5,000, but at the time of writing have already secured donations in excess of £7,000.

Hodell said: “Cancer does not discriminate and can affect anybody, they want to be there for those that need it.

“Be that rugby players who have been diagnosed with cancer, the family of rugby players, or those that don’t play any more but are still involved in the rugby community.

“We’re privileged to be able to help make a small difference to their lives and would welcome further donations.”

Donations can be made here: https://bit.ly/2XO8Zce

Darlington helps The Bread and Butter Thing

D

arlington Building Society has garnered praise for backing a charity distributing fresh food supplies to local community hubs.

It’s linked up with The Bread and Butter Thing and has so far provided 42 tonnes of food and other basic shopping staples to communities in Darlington that would otherwise have gone to waste.

Families pay £7.50 for supplies that would normally cost at least £35. Darlington’s donation of £20,000 came from from this year’s profit share pot.

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The Nottingham trebles charity donations

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he Nottingham Building Society said it will have spent £3m this year helping its members through the pandemic and supporting various charities.

It trebled planned charitable donations to organisations such as The Trussell Trust food banks, Framework and The Silver Line for Age UK. David Marlow, chief executive of the Nottingham, said: “In unprecedented times of national challenge like we are experiencing, it is right that organisations and firms come under intense pressure and scrutiny.

“We as a mutual, owned by our members, believe that we have stepped up and met those challenges – using our financial strength to support our members, stakeholders and the communities that we serve.

“Our main aim has been on ensuring that we play our full part in tackling this national crisis.” www.mortgageintroducer.com

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