Mortgage Introducer June 2021

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MORTGAGE

INTRODUCER www.mortgageintroducer.com

June 2021

 Robert Sinclair  The Outlaw  Loan Introducer

THE GOODALL PLACE Steve Goodall on his aspirations for e.surv

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EDITORIAL

COMMENT

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Information carried in Mortgage Introducer is checked for accuracy but the views or opinions do not necessarily represent those of CEDAC Media Ltd.

Stating the obvious

T

he housing market is “on fire” – that’s the latest to pearl of wisdom to come out of the Bank of England.

You don’t say! Just look at some of the house price indices that have come out in the past month. Nationwide puts the growth over the past year at 10.9%, or £23,930 in pennies and pounds.

Halifax reckons it’s 9.5%, or £22,000, whilst the ONS figures – the most accurate – pegged growth at 10.2% (albeit March-to-March).

Let’s be honest, this doesn’t look like it’s going to change anytime soon.

The issues that have affected the market remain, however.

For years, successive governments have failed to build enough new homes to fulfil the needs of the market.

A revolving door of Housing Ministers has done little to help that, and the post still remains a junior ministerial one, lacking a seat at the Cabinet table.

Deposits remain unobtainable for many, and despite the government

and lenders doing so much more to help with 95% loan-to-value (LTV) mortgages, they will only get further away as prices rise.

People who have been hit hardest by the pandemic will also struggle.

Looking forward, a new wave of credit issues will hit those who have had to rely on credit cards and loans to get through the crisis.

There is a great deal that needs to be addressed to make sure the market is sustainable and accessible.

It baffles that a renter can pay more in rent than they can borrow on a mortgage, and yet still be told that they can’t afford to repay it – despite repaying a landlords every month without fail.

Comments about a market “on fire” make great soundbites – what is needed, however, is a plan.

Policymakers need to make a plan to resolve the issues that were there before the pandemic, and which are being exacerbated by it. Fewer soundbites, more action please. M I

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MAGAZINE

WHAT’S INSIDE

Contents 7 9 13 14 15 17 18 19 20 22 36 39 40 43 44

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AMI Review Market Review Education Review Networks Review London Review High Net Worth Review Recruitment Review Service Review Technology Review Buy-to-let Review Protection Review General Insurance Review Equity Release Review Surveying Review Conveyancing Review

46 The Outlaw The latest from our resident outlaw 50 Cover: The Goodall place Steve Goodall, managing director of e.surv, shares the experiences that have informed his journey and talks about his ambitions for the business 54 Loan Introducer The latest from the second charge market

LONDON REVIEW

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BUY-TO-LET REVIEW

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46

THE OUTLAW

SPECIALIST FINANCE INTRODUCER

58 Specialist Finance Introducer An interview with Crystal Specialist Finance and more from the specialist market 62 Spotlight: Matthew Cumber Matthew Cumber, managing director at Countrywide Surveying Services, talks shop

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01/06/2021 15:40

REVIEW

AMI

Cryptocurrency, mortgages and ethics Robert Sinclair chief executive officer, AMI

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he value and reputation of ‘cryptos’ has been volatile recently. As they have grown in gross value, countries, tax authorities, central banks, regulators and corporates are all playing catch up.

The opaque way funds are created and the fact they reside in the ether is a challenge for those who traditionally value tangible assets.

Those with responsibility for the green agenda now see the impact of

coin mining on energy consumption as a core issue.

Those concerned with financial crime, however, are increasingly concerned at how cryptocurrencies might be used to evade conventional controls. Countries are also now expressing concern over illegal traffickers of drugs, children and arms embracing crypto as a means of avoiding detection. By investing legally, is this aiding the criminals?

Tax authorities have yet to fully decide on whether profits on virtual coins should be taxed as income or a capital gain, or possibly in some jurisdictions exempt.

Central banks are excited by the concept of how the currency is traded,

Shaken not stirred Stacy Reeve senior policy adviser, AMI

T

he Financial Conduct Autority (FCA) recently released its policy statement on general insurance (GI) pricing practices, driven by research from 2018, which showed that six million policy holders paid higher prices, where if they’d paid the average for their risk they would have collectively saved £1.2bn.

The most talked about change is the ban on ‘price walking’. From January 2022, firms will have to offer home or motor insurance renewal prices no greater than the equivalent new business price. This is a significant intervention, which includes anti-avoidance measures to prevent gaming of the rules.

Consumers that switch regularly may see an premium increase, whereas those that don’t are likely to see a reduction. Some may argue this isn’t fair, but a healthy and well-functioning market has to work for all consumers, not just the ones that have the capability or desire to shop around.

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Intermediaries should also be aware of the FCA’s enhanced rules and guidance on product value. Unlike the pricing remedy, this section applies more widely to GI and pure protection products, including add-ons and premium finance.

From 1 October 2021, new obligations will apply to both insurers and distributors to ensure they deliver products that offer fair value to the customer. In this context, value means the relationship between the overall price to the customer and the quality of the product(s) or services provided.

The FCA doesn’t go as far as defining fair value, but does include a steer on what distributors should consider, as well as guidance on what might impact the delivery of fair value. The concept is included in the FCA’s recent consultation on a new Consumer Duty, signifying that this is an integral part of the long-term regulatory landscape.

New requirements will make it easier for consumers to cancel auto-renewal of their policy and applies to all GI products, excluding private health, medical and pet insurance.

It is reassuring that this has been implemented on an opt-out basis, to help reduce

but worried that it could replace their own asset, and so take away one of the primary tools they have to manage their economy.

Controls over and use of money supply, interest rates and taxation are the cornerstones of any modern economy, but could be swiftly eroded by widespread adoption of cryptocurrencies.

Some asset managers see it as a necessary investment class now, but its intangibility, volatility and challenges over liquidity in some exchanges place it at the riskier end of the spectrum.

Finally, as a store to be used as a house deposit or purchase, responsible UK professionals will want to see when the funds went in, where from and when they came out.

Statements will be essential. They will want to ensure gains are being declared and paid before accepting it in the local currency.

Others will see it as a step too far for them in the current world. M I the risk of cover unintentionally lapsing and leaving a customer uninsured.

The reporting requirements mean that some firms must submit annual data to the FCA on home and motor business. The granularity of the submission does depend on the firm and whether it is an insurer or a price/non-price setting intermediary.

Naturally, much of the responsibility does fall on insurers, but there will be instances where intermediary firms will be captured.

AMI plans to issue a member factsheet to provide more detail in due course.

These changes are a step in the right direction to improving trust in the insurance industry. It should also present GI opportunities for mortgage intermediaries, as the aggregator model is likely to be disrupted and market shares, profits and revenues will potentially be redistributed.

Intermediaries play an important role in helping consumers understand the value of products, and by no means do these requirements discourage shopping around to find a suitable product.

What we need to encourage is a shift from a consumer focus predominantly on price to more of an appreciation of the particulars of a product, its benefits, and ultimately how it will react in the event of a claim.

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03/06/2021 11:51

REVIEW

MARKET

Increasing confidence in the market Craig Calder director of mortgages, Barclays

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midst the continued blur of activity across the housing and mortgage market, you sometimes have to take a step back to realise that – at the time of writing – it’s been a year since the property sector ‘reopened’ after initial COVID-19 restrictions. Some days this feels like yesterday, and others it feels as if a decade has passed.

It’s certainly easier to blank out those dark, and frankly scary, early days of the virus. Our industry has been fortunate enough to rebound so quickly, due to a pent-up demand and the stamp duty holiday, which have combined to create something of a property boom.

HOUSE PRICES

To highlight just how far we have come in this period, the Office for National Statistics (ONS) found that UK average house prices rose by 10.2% in the year to March 2021, the highest annual growth rate since August 2007.

This is up from the 9.2% increase seen in the year to February 2021.

Average house prices were said to have risen by the greatest margin in Wales, up 11% to £185,000, followed by a 10.6% uplift in Scotland to £167,000. England noted a 10.2% increase to £275,000, and average house prices rose by 6% to £149,000 in Northern Ireland. London continues to be the region with the lowest annual growth (3.7%) for the fourth consecutive month.

GOVERNMENT INITIATIVES

In addition to the support received from the stamp duty holiday, additional www.mortgageintroducer.com

11:51

government initiatives also provided a much-needed helping hand to homeownership across the country.

Data compiled by the Ministry of Housing, Communities & Local Government suggests that a total of 21,026 properties were bought using a Help to Buy equity loan in Q4 2020, up 40% on the same period in 2019.

From 1 April 2013 to 31 December 2020, 313,043 properties were bought with an equity loan. The total value of these loans so far is £18.9bn, with the value of the properties sold totalling £86bn. Additionally, 82% of all completions were by first-time buyers.

Although the Help to Buy scheme is planned to come to an end in 2023, other government and lender-driven support is available in the form of shared ownership and the Mortgage Guarantee Scheme.

It’s encouraging to see sustained support from the highest levels, although these schemes and initiatives won’t suit the needs of every borrower.

I remain confident that the intermediary market will continue to play an integral role in ensuring that potential borrowers are fully informed about individual schemes, and the pros and cons attached to them.

INTERMEDIARY CONFIDENCE

The value attached to the advice process remains crucial in meeting a variety of homeownership aspirations, and this will not change anytime soon, if ever.

As such, it was great to see confidence rising across the intermediary community, as the number of cases handled by advisers were reported to have increased significantly in the first quarter of 2021.

Research from the Intermediary Mortgage Lenders Association (IMLA) found that 96% of mortgage intermediaries are confident in the industry’s future, with 97% confident

about the intermediary sector, specifically. Meanwhile, as many as 99% saw a positive outlook for their own business.

The trade association’s latest report also recorded a 14% increase in the average annual number of cases handled by individual intermediaries between the fourth quarter of 2020 (78) and the first quarter of 2021 (89).

In this period, two-thirds (66%) of cases handled by advisers were for residential mortgages, 28% related to buy-to-let (BTL) customers, and 6% were classed as specialist.

The average number of decisions in principle (DIPs) processed by advisers increased from 25 to 28 between the final quarter of 2020 and Q1 2021.

The conversion rate from DIP to completion grew quarter-on-quarter to 43% in Q1 2021, compared to 34% in Q4 2020.

After a significant drop in the wake of the coronavirus crisis, the conversion rate from offer to completion was also said to have increased, from 65% in Q4 2020 to 75% in Q1 2021.

This set of data represents some highly positive news, and it’s not just activity across the purchase market which is fuelling increased confidence.

REMORTGAGE

The remortgage market continues to fly a little under the radar, but is performing well when it comes to supplementing intermediary business levels. To illustrate this, LMS’ Monthly Remortgage Snapshot reported that the volume of remortgage completions rose by 4.7% in March.

As highlighted in the data, March also brought the market right up to the five year anniversary of 2016 stamp duty cut for buy-to-let purchasers.

This will have contributed to the increase, as many landlords began the remortgage process as their 5-year fixes came to an end.

I’m sure this is an area where most intermediaries are already proactively supporting their existing clients, but opportunities may still be available to engage and assist, bolstering remortgage and product transfer activity, and helping drive confidence levels even further. M I JUNE 2021 MORTGAGE INTRODUCER

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MARKET

A closer look at later life Xxxxxxxxxx Martin Reynolds CEO, xxxxxxxxxxxxxxxx, xxxxxxxxxxxxxxxx SimplyBiz Mortgages

D

uring the past decade, the label of ‘later life’ has undergone a very necessary rebrand. It was previously seen by some as a winding-down period, during which one would sit back and – if you were fortunate – enjoy the fruits of a paid off mortgage and regular income from an adequate pension pot.

Of course, we now understand that the plans, goals and dreams of a client in the post-retirement stage of their life are just as diverse and ambitious as at any other point.

As I’ve said in previous articles, I believe that we are lucky enough to be working in an extremely reactive and quickly evolving market. Inevitably, as our understanding of clients in or approaching ‘later life’ has increased, the advice process and products available have adapted accordingly.

COMPLEX NEEDS

Thorough fact-finding has never been more important and, as an industry, we have moved quickly to know more about the complex needs of those in later life in order to deliver good outcomes to clients.

However, whilst the market has grown in many positive ways, there have also been challenges which have disproportionately affected those in later life. Not least among these is the COVID-19 crisis, which has – and continues to – hit the older population the hardest.

Of course, we know that the elderly are likely to suffer the worst repercussions of the illness physically, if it is contracted. However, isolation, shielding and an increased reliance on new technology have also contributed to increased vulnerability amongst those in later life. www.mortgageintroducer.com

The effects of loneliness are by no means limited to those in later life, but the pandemic did sever their social links more effectively than those of any other demographic – there are plenty of negative points to make about teenagers living their lives behind a range of different screens, but it inarguably prepared them well for over a year in lockdown!

Once you begin to entwine that loneliness with potential other factors, such as bereavement and declining cognitive capability – both also most rife amongst the elderly population – mental health issues, increasingly sophisticated financial scams and confusion in the face of ‘fake’ or unreliable news, you end up with quite the tinderbox.

CLIENT WELLBEING

Distressingly, separation from one’s social network and family also means that early signs of vulnerable characteristics are less likely to be spotted and tackled until they have developed into serious issues.

Even if all is well with the client’s own wellbeing – be it mental, physical or financial – their circumstances can rarely be considered in a bubble.

Increasingly, the needs of children or grandchildren are also factored into later life financial planning.

Of course, if you feel this is coercive, or to the detriment of the client themselves, it should be treated as another characteristic of vulnerability.

However, in the majority of cases, intergenerational planning will be a natural and mutual agreed aspect of the financial plan of those in later life.

I mentioned the rapid evolution of our sector in the opening of this piece, and one of the areas in which there has been development in leaps and bounds is the equity release market.

In my opinion, equity release should be viewed not as a product, but as a potential solution through which people can prepare, plan and protect in three crucial areas: family, tax and wealth, and planning and lifestyle.

As with any solution involving such a breadth of absolutely core areas to a client’s holistic financial plan, equity release isn’t straightforward – hence the requirement for specialist qualifications and Financial Conduct Authority (FCA) permissions before advisers and brokers can conduct business.

Whilst some readers may already hold those permissions and be operating in the equity release market, I know that others may still be considering whether it’s right for them, or whether to outsource to specialist third-parties.

Whatever the extent to which you are involved in equity release, being able to discuss it as an option for clients will, I believe, prove extremely valuable in circumstances where clients want, or need, to free up capital.

The pandemic has firmly emphasised the importance of home. This, supported by the catalyst of the stamp duty holiday, has made the purchase market incredibly competitive.

Now, more than ever, using housing wealth to support a family member with a deposit when looking to buy a property is, in my opinion, only going to increase.

NEW NORMAL

Similarly, we may see more borrowing taken by customers who just need to help family members who have been affected by the last year – whether through loss of income or employment.

The ‘Bank of Mum and Dad’, or even of Granny and Grandad, will be crucial to many people’s plans.

As we emerge from lockdown and adjust to the ‘new normal’, it will be interesting to see how perceptions of holding capital in property have shifted over the past 18 months within the later life population.

After being confined, will people feel that home is where the heart is? Or that experiences are there to be seized, and life to be lived in the moment?

Either way, it’s a really interesting time in the later life market, and I’m excited to see what comes next. M I JUNE 2021

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REVIEW

MARKET

Building back differently Tim Hague director, Sagis

T

he rather wet month of May may well have been notable for the record breaking amounts of water that descended from the heavens, but even that did nothing to dampen the fright over inflation.

Prices jumped in April, with the consumer price index more than doubling from 0.7% to 1.5% according to the Office for National Statistics (ONS). Inflation in the US is far higher, at over 4%.

UK price growth, for now, is safely inside the 2% target set for the Bank of England by the Treasury and, in reality, there is no way that central bankers are going to mess with the post-pandemic recovery by throwing a spanner in to the works any time soon.

Economics is about people. People have been stuck at home for a year, and the lucky ones have had nothing to spend their money on, so they’ve saved it and paid down their debt with it. Now people are allowed to go to the pub and to see their families, and – traffic light confusion notwithstanding – on holiday.

There is about to be – and may well already be when you read this – a massive spending spree. This will push up inflation and is going to pose some very tricky problems for the Monetary Policy Committee (MPC) to manoeuvre. It’s also likely to underpin demand in the housing and mortgage markets.

We spend much time pointing to the end of the furlough scheme in October, worrying – rightly – about those who will lose their jobs and struggle financially. But the pandemic has brought more than tragedy and a year at home. It’s woken us up.

During this period, we have all become more familiar with and

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comfortable using technology in new ways. Low interest rates and the Funding for Lending Scheme extension means that many lenders can afford to invest in this digital future – probably more so than many of us realise. Other resources might be problematic, but financial ones less so at the moment.

Building societies in particular are awash with savings balances, which will have a negative impact on profit if they cannot lend them, so lenders are falling over themselves to lend, but in a narrow criteria-led pond framed by concerns about job security.

Brokers will know all about this, with many having to re-broke cases as lenders that used to accept certain types of business are now declining it, often without communicating the change of appetite!

OPTIMISTIC OUTLOOK

It might sound counterintuitive, but there is a sense of optimism growing, even among lenders.

Of course, they will have to manage difficult decisions faced by homeowners whose financial situations have changed, as well as figuring out their servicing capacity in a more flexible working environment.

Nevertheless, many have enjoyed record first quarter lending and are well placed to make proper investments.

Now is the moment to invest in getting this right for the future.

The big high street banks have already ploughed investment into developing technology that will improve their customers’ experience.

I think we’re going to see the fruits of that over the coming months.

Consumer confidence in digital banking is higher than it has been, as a result of necessity.

Competition is already fierce, and with so much money – both retail and institutional – sloshing around the economy, as well as the appetite to spend it, it’s going to get even fiercer.

At the time of writing, two lenders have already dropped their best buy rates below 1% on a 2-year fix, and I wouldn’t be surprised if others follow their example.

Competing on price for originations is not sustainable, and one strategy is to retain more customers by making product transfers increasingly easy.

This is particularly true for those borrowers facing a need to refinance and avoid a full re-underwrite. But it will not be enough.

Technology and origination is where growth lies. How lenders deliver slicker processes and improve the user experience for both the business-tobusiness and consumer markets is going to mark out the winners and losers over the next five years. M I

Consumer confidence in digital banking is at its highest

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REVIEW

EDUCATION

Knowing what help is available to borrowers Gordon Reid business development manager, learning and development, LIBF

T

he biggest challenge for independent mortgage advisers has traditionally been working through the huge range of products available from so many lenders to find the best deal for a customer.

That includes the right mortgage term, type of product, product term, fees and whether to pay those up front or add them to the mortgage – indeed, the key things on which we actually offer advice.

Nowadays, however, there are additional considerations, which although they don’t strictly form part of the advice, are just as important to the customer. It’s crucial you understand and can explain these things.

STAMP DUTY

One example is stamp duty, which since July 2020 has been suspended on the first £500,000 of all property purchases. From 1 July, this threshold will reduce to £250,000, and then from 1 October will revert to the prepandemic level of £125,000.

To add to the complexity of this, the level of stamp duty a buyer must pay also depends on whether they’re first-time buyer (FTB), a non-first-time buyer purchasing their main residence, or someone purchasing an additional property. As a mortgage adviser, you should be able talk clearly and accurately about this.

FIRST-TIME BUYERS

What constitutes an FTB? As far as stamp duty is concerned, the definition is simple. To qualify, the purchaser(s) must never have owned an interest in www.mortgageintroducer.com

a residential property anywhere in the world, and must occupy the property as their main residence.

That means that even if one party to a purchase has previously owned a property, the purchase cannot be classified as a first-time purchase.

However, if the purchaser has only previously owned a business premises, they can still be classified as a FTB. Lenders often have different interpretations of what constitutes an FTB. So, just because someone has owned a property and had a mortgage years ago – and is therefore definitely not eligible for FTB stamp duty relief – that doesn’t mean they won’t qualify for FTB products.

Again, you as the mortgage adviser must understand the terms of each lender and demonstrate the benefit of a strong relationship with their business development managers.

OTHER HELP-TO-BUY SCHEMES

Over the last few years, there have been several schemes available to help purchasers, many aimed at FTBs, but not exclusively.

As a mortgage adviser, you need to understand what help is available, how the different schemes work and who is eligible for them.

One of the most popular was the Help to Buy individual savings account (ISA), which allowed FTBs to apply to the government for a 25% savings boost of up to £3,000, as long as they had saved a minimum of £1,600.

Although this scheme has now ended, people who already have one can continue to save into it until 2029.

There are also shared ownership schemes, also not exclusive to FTBs. These include specific help for people with disabilities and older people, as well as those who simply can’t afford to buy their own home in full.

The Help to Buy Equity Loan scheme, introduced in April this year,

enables purchasers to borrow up to 20% of the purchase price of their new home – 40% in London – subject to regional price caps.

Unlike the scheme it replaced, this one is only available to FTBs, and borrowers must have a minimum 5% deposit, together with a designated help-to-buy mortgage.

Finally, to increase the supply of low deposit mortgages, in the last Budget a government-backed Mortgage Guarantee Scheme was introduced.

This effectively underwrote most of the potential loss, such as mortgage defaults, and the lender is unable to recover their loan through the sale of the property. Again, this scheme is not exclusive to FTBs. THE VALUE OF UPDATING KNOWLEDGE AND SKILLS

All this points to how important it is to keep your knowledge up to date – not just in relation to regulation, products, processes and how different lenders work, but also in terms of understanding customer needs and circumstances, and being able to promote the right support that may be available to them.

Continual professional development (CPD) isn’t a regulatory requirement for mortgage advisers, but to provide a good service you need to be fully aware of the latest developments in the mortgage market.

Only by keeping yourself informed through regular learning will you have the skill and confidence to talk about recent changes, new schemes and developments with your customers.

PROFESSIONAL DEVELOPMENT

The chances are you’re reading this because you already have a strong and active interest in continuing your professional development.

In that case, you may be eligible to apply for CeMAP Professional status with LIBF. CeMAP Professional – and the digital badge that comes with it – will enable you to demonstrate your commitment to continued professional development, to learning, and therefore to your customers, and in doing so, help you stand out from your peers. M I JUNE 2021 MORTGAGE INTRODUCER

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REVIEW

GREEN MORTGAGES

The need for a joined up green agenda Shaun Almond managing director, HL Partnership

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limate change is high on the agenda for the global summit this month, which means that the focus on going green is becoming even more intense.

Last month I highlighted the rise of green mortgages and the conditions which would be needed to secure a major shift towards a housing market that was fully integrated into an ecologically based funding and building sector. Much of what I was talking about was predicated on the basis that all stakeholders were fully signed up and functioning at an optimum level.

However, in the case of house building, there is an existing quality issue over new-builds, and there has been for some time.

Of course, mistakes are sometimes understandable with a product this complex, but with more than 97% of buyers reporting problems or defects to their builder last year according to a recent national new home customer satisfaction survey, it hardly inspires confidence that tomorrow’s new-builds are going to be able to conform to ever more stringent green standards.

Meeting Energy Performance Certificate (EPC) qualification is only going to become tougher, and certification must remain fully independent of the building industry.

The National House Building Council (NHBC), which provides a guarantee to buyers of new-build property, has often been accused of simply being a rubber stamp operation for the building companies which pay for it to exist.

On the available evidence of customers dissatisfied with their

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properties, that point of view clearly has some credibility.

If this government is serious about meeting its carbon neutral targets with regards to housing, as well as its wish for a huge expansion of property building, it will need to bring all certification for building quality and EPC qualifications under independent control and oversight.

Simply encouraging lenders to deliver green mortgages is not, on its own, going to deliver the fundamental changes that the politicians desire.

Maybe this is also the right time to look at different building methods.

In the same way that technology has transformed industries such as car manufacturing through the application of new materials and state of the art construction methods, in the house building sector modular designs manufactured offsite – but as sturdy as traditional bricks and mortar – could be put together onsite in days rather than weeks or months.

Lenders would have to be convinced of their longevity and long-term value, but as we have seen in the past few years, pioneers like Legal & General have been the focus points for

a reappraisal of how we could build future property and provide finance.

The proposed overhaul of planning regulations – despite the resistance from MPs – should also, according to government briefings, remove some of the roadblocks to increased building activity. Action to deal with development companies sitting on building land is also in the plan.

Of course, this is yet to go before Parliament, and I have no doubt that constituents of MPs who don’t want

“If this government is serious about meeting its carbon neutral targets with regards to housing, as well as its wish for a huge expansion of property building, it will need to bring all certification for building quality and EPC qualification under independent control and oversight” building in their own back yard will make their feelings known!

It is good to discuss a housing topic without having to refer to the pandemic. We are moving on now, and it’s good to see that the government is planning for a future which requires us to face up to climate change rather than just lockdowns. M I

Not that old chestnut!

I

f I have mentioned the topic of general insurance and protecting customers from the financial catastrophes of illness and or death while struggling to pay a mortgage before now, I will make no apology. It has been a bugbear of mine for ages that the take up of protection policies is still so low.

Buildings insurance is of course compulsory, but contents policies tend to be filed under ‘to be discussed’.

Along with life and illness protection advice, it is too easy as an adviser to be put off persuading clients, who feel – with some justification – that to spend more money after just making a huge investment in

their new house, is something that can be left until later.

The question, though, is when? Advisers are best placed to ensure that customers are fully informed of the dangers of leaving it too late, but the regulator is expecting all mortgage advisers to be better equipped to convert protection advice into action.

The Financial Conduct Authority (FCA) has released a consultation paper highlighting the requirement for mortgage advisers to point out insurable risks and signpost a solution where appropriate. It’s clear from this move by the regulator that advisers can no longer delay the protection conversation.

www.mortgageintroducer.com

REVIEW

LONDON

Don’t panic, Captain Mainwaring Robin Johnson Xxxxxxxxxx managing director, Kinleigh, Folkard and Hayward xxxxxxxxxxxxxxxx, xxxxxxxxxxxxxxxx Professional Services

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never fail to be gently amused by the wild ups and downs in house price predictions that are bandied about by the boatload. In late May, the Office for National Statistics (ONS) published transactions data, and property gurus jumped on the numbers with glee.

One said April’s figures show the market is already cooling down as buyers panic about the stamp duty holiday deadline looming. “Residential property sales plummet 36% in April,” they scream with delight. Meanwhile, another commentator points out, that transactions in April were still 180% up on last year, with completions hitting a massive 117,860.

Then there were the doomsayers.

“This latest data shows the fragility of the UK property market,” said one, “concerns over whether activity levels will sustain once the stamp duty holiday is wound down are mounting.”

The serial optimists retorted that “any doomsayers predicting a crash will probably turn out to be wrong.”

What is one to make of this then?

We are in a really unusual market this year. Lockdowns, furlough, stamp duty tax breaks, the Mortgage Guarantee Scheme – all of this makes for a market which is not acting according to the usual rules.

Interest rates and quantitative easing are pumping money into the system, as is savers’ cash, stashed away because we’ve had virtually nothing to spend it on for the past year.

Trying to predict or even make sense of the statistics at this juncture is not really very helpful.

We can take some lessons from them, however – lessons that anyone actually working in the mortgage or housing market won’t need transaction data to tell them. www.mortgageintroducer.com

Activity is through the roof.

Some of it is because of pent-up and frustrated demand stalled for one reason or another over the past year.

Some of it is because affordability has been improved by one or more of the government schemes.

Some of it is because, having been locked in their homes for more than 12 months, an awful lot of people have realised they’re in the wrong property.

The bottom line here is that none of this really tells us that much. Property transactions are taking much longer than usual to push through and we are still going to be coping with the raised level of demand we’re seeing now until, probably, Q3 at least of this year.

In London, we are often scrutinised more closely than other parts of

The London market is thriving

the country when it comes to the housing market – largely because it’s home to some of the world’s most expensive pads. But London is like an international property market imprinted over the top of a much more ordinary one.

London is a lot of villages with hearts, high streets, local communities and amenities.

It has been fascinating to see the way that the streets have been affected over the past year.

In areas normally packed with family life, there is silence as those families

upped sticks from the city to spend lockdown in their second homes. In other areas, life suddenly woke up.

Neighbours started talking to one another, remembering after all that it’s OK to say good morning to people you pass on the street.

There’s been much talk of London’s property market feeling the effects of an ‘exodus’ from the city as working from home becomes the dominant approach.

There certainly are people moving out, but there are also people moving in. There are also more people moving around London, from flats to houses further out of the centre.

The numbers do actually bear this out. LonRes data shows that new instructions in April 2021 were 35% higher than in April 2019 – annual comparisons are pointless given the pandemic skew – and 10% higher than the five-year April average from 2015 to 2019.

Transaction volumes were up 21% on April 2019 levels, and 5% higher than the average April figure between 2015 and 2019.

The number of properties going under offer rose as well, up 58% on April 2019, some 57% higher the fiveyear April average and representing the highest April figure since 2013.

It’s tempting to worry about what the future will hold. It is the job of many of us to know how markets behave and plan to make the most of them in our positions for the companies for whom we work. These are exceptional times and, to the credit of the market and many who working it, we have not only survived but thrived.

This is not to say the return to work and some broader sense of normality will not elicit more challenges for us all, but it does reaffirm that when we look back at how this pandemic has impacted the housing market, it is fair to say none of us would have predicted we would be where we are today back in May 2020.

A watching brief is required, but for the time being and the foreseeable, don’t panic, Captain Mainwairing. M I JUNE 2021 MORTGAGE INTRODUCER

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LATER LIFE

Flexibility in later life lending Graeme Aitken business development manager, Harpenden Building Society

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any lenders and brokers are missing out on opportunities for those who want to borrow money into the later years of their life.

Research from the Office of National Statistics (ONS) states that the average median age of residents within UK local authorities is projected to increase between 2018 and 2043.

The effects of COVID-19 have added complexity to these figures, causing life expectancy in 2020 to fall for males to 78.7 years and for females to 82.7 years.

It is difficult to predict how the longterm effects of the pandemic will affect these statistics over the next decade.

However, the success of the vaccine rollout and overall decline of the pandemic within the UK will hopefully close the gap.

MERITS OF LATER LIFE LENDING

With the past decade’s increase in life expectancy, there should in theory be more products on the market to meet the demands of an aging population.

However, clients and brokers can often struggle to connect with lenders which are inflexible with their income and upper age limit criteria. This can be a significant missed opportunity.

When older applicants’ financial circumstances are reviewed holistically, underwriters can garner a far more accurate portrait of risk.

We spoke to Jon Lane, later life lending expert at Kinnison Private Finance, to understand the current frustrations for his later life clients.

Lane states: “People are under the misconception that applicants take out

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lifetime mortgages as a last resort. In reality, borrowers are simply making smart decisions with regard to their financial planning.

“This is particularly true for those with dependents. Many applicants want to free up capital to help their children get onto the property ladder or to support a growing family.”

Releasing money to pay for care costs is another key factor in taking out mortgages in later life.

“Entering into a dialogue with our brokers is critical. This allows us to analyse those details that might not be instantly obvious from either paper-based applications or those submitted through our Broker Online portal” Lane cites an example of a previous client, who took out a mortgage at 97 so she could continue living in her house and paying for home-based care.

Age need not be a barrier to successful lending.

CHANGING PRIORITIES

Lane also talks about the effects of the pandemic on the priorities of many later life borrowers.

He says: “There’s a definite sense of ‘live for today’, as people have grown frustrated with putting their lives on hold. They want to have access to funds that allow them to take that big holiday, or pay for home improvement work.

“Lockdown has given them time to think about all those future plans and projects they’ve been putting off.”

Later life lending offers straightforward access to this capital, while retaining the security of staying in the property in question.

Many clients who took out interestonly mortgages pre-2008 are now coming to the end of their term.

Their incomes may be very different now, due to the fact they are semiretired, taking out their pension or working reduced hours.

Whereas some lenders may only supply them with capital and interestmortgages – if at all – often this is not suitable for their new financial scenario.

Lifetime or interest-only mortgages can offer far more flexibility and security for homeowners, who can feel assured that they do not have to sell their home in five or 10 years’ time.

Lane asserts that flexibility is key to obtaining new business from later life lending. He predicts that growth in the space will continue, and that lenders need to continue to innovate and adapt their products as the needs of the client base evolves.

The ability to speak to an underwriter is also a key attribute for successful lenders.

When clients have unusual properties or atypical income patterns, a direct conversation with an underwriter is hugely beneficial to convey the individual details of each application.

Lenders can therefore build up an accurate depiction of a borrower’s unique set of circumstances.

FLEXIBILITY FOR BORROWERS

At Harpenden, we have no upper age limits for our borrowers, and when we assess a case, we consider every applicant’s individual financial portfolio.

Each case is different, and we believe it’s important to get a clear understanding of an applicant’s specific motivations and circumstances in order to work out the best solution.

Entering into a dialogue with our brokers is critical.

This allows us to analyse those details that might not be instantly obvious from either paper-based applications or those submitted through our Broker Online portal.

Ultimately, a flexible approach is crucial to supporting later life borrowers in achieving their own unique goals and ambitions, for both themselves and their families. M I www.mortgageintroducer.com

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HIGH NET WORTH

When is self-build not self-build?

Peter Izard intermediary business development, Investec Private Bank

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ockdown has led to many people re-evaluating what they look for from their home. A growing number are considering refurbishment and renovation, looking to create their dream home without the need to build from the ground up.

As lockdown has led to people spending far greater amounts of time at home, my colleagues at Investec have seen a surge in the number of enquiries from people looking to conduct property refurbishments.

Many people simply want to make changes that will allow them to work from home. Others are looking to maximise their outdoor space.

With the housing market remaining relatively buoyant at the moment, this has also meant prices are high.

The stamp duty holiday has certainly triggered activity lower down in the market, this is still a significant expense for high net worth (HNW) buyers.

This has led to many choosing to save the money they would have spent on stamp duty when moving, and instead considering how they may upgrade their existing home.

WHAT MIGHT A TYPICAL PROJECT LOOK LIKE?

Our clients are often seeking to create their ‘dream home’, without the need to build something from scratch. As such, we have seen many homeowners materially changing either the design or layout of their property.

While many are choosing to renovate their current home, some are also looking to refurbish a new purchase.

For example, an Investec client recently purchased a house that was converted into four self-contained units.

As part of the refurbishment, the owner is removing the stud partition www.mortgageintroducer.com

walls, taking out three of the four kitchens and redesigning the entire layout. This is just one example of how homeowners are redesigning properties to meet their ‘dream’ requirements.

WHAT ARE THE BENEFITS OF THE REFURBISHMENT ROUTE?

It might often be assumed that refurbishment projects can be costly, but the savings potential for homeowners can be substantial in particular cases.

The previous example is a case in point for this. The client previously had a dream house in mind that would have cost them up to £6m. Instead, they purchased this property for £3.5m and will spend around £1m on the refurbishment project – giving them an anticipated saving of £1.5m.

HOW DO LENDERS USUALLY APPROACH THESE KINDS OF RENOVATION PROJECTS?

For refurbishment projects, lending is usually secured against the property in question, or the main residence.

Depending on the cost of the project, additional security can sometimes be required. This may see a lender consider taking further security against a second property – such as the client’s buy-to-let (BTL) property, for example.

A crucial factor for lenders to bear in mind is that a property must be worth more than the loan itself.

This will usually see lending structured so that the finance is released incrementally over the course of the project, rather than being provided upfront at the beginning.

For example, we might imagine a scenario where a homeowner has taken out an 80% loan-to-value (LTV) mortgage, and then the property is gutted prior to refurbishment. This may see the value of the property temporarily drop to 70%.

In this situation, the lender would need to work to a phased schedule to release the money in tranches as the work is completed.

ARE THERE CHALLENGES TO FINANCING DEALS LIKE THIS?

Brokers and lenders must consider that there are a number of factors which can make refurbishment projects complex.

First, they must recognise that largescale refurbishments are extremely fluid. Before a final decision is made, for example, a client may often work through multiple plans. As these designs change, so too will the costs.

Second, banks should be cautious if there are any amendments made to security during a project.

This means any potential lender will need to ascertain what the value of the property will be when it is in its worst state of repair, and how that impacts its risk profile.

Lastly, projects of this nature will usually involve multiple parties beyond the property owners themselves. This might include architects, builders and designers. In this respect, it’s important to remember the human factor; everyone will have an opinion, meaning that the process can take time.

WHY DO THESE PROJECTS NEED A UNIQUE LENDING APPROACH?

For projects of this nature, many banks tend to categorise it as ‘selfbuild’ meaning clients may not get the financing they need to complete a refurbishment.

For this reason, a bespoke lending solution that takes a holistic view of each client’s wealth, personal circumstances and assets is vital.

At Investec, this means we don’t limit our clients to a single route when it comes to their financing needs.

Whether tailored LTVs or loans based on gross development value, we ensure our client’s full income structure is taken into account.

So, if you’re working with a client on a significant refurbishment project, it’s vital that as a broker you understand your client’s goals and the nuances of their financial situation.

Most importantly, understand the financial solution that will allow them to create their dream home. M I JUNE 2021 MORTGAGE INTRODUCER

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RECRUITMENT

Diversity values in work culture Pete Gwilliam director, Virtus Search

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here is an inherent challenge for the sector when it comes to increasing the representation of people of colour. Why? Because whilst data is far from perfect, it is not hard to notice that the mortgage sector has always been predominantly white.

It has also been heavily weighted towards males, but the good news is that both of these areas are changing.

BLENDED AVERAGES

Recent research by Virtus Search confirms that in the face-to-face sales channel of 11 mainstream lenders, although there is a healthy blended average of 51% female representation, the blended average of those from a Black, Asian and minority ethnic (BAME) origin is 7%.

When considering 14 specialist lenders with sales teams of six or more, there is a blended average of 30% female and 6% BAME. So, when Sheldon Mills, executive director, consumers and competition at the Financial Conduct Authority (FCA), confirmed in an April speech that the regulator “want firms to consider how they can accelerate black inclusion at all levels as part of their diversity and inclusion agendas,” the obvious point for intermediary sales leaders to consider was that, whilst hiring BAME individuals from within the sector might improve the diversity mix, it will have done so to the detriment of the firm from where they depart.

Surely this is, therefore, an opportunity for the sector to share ideas, resources, and importantly, the responsibility for change.

Of course, diversity and inclusion does not begin and end with recruiting for a more multicultural, multi-ethnic

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workplace, but it is a necessity that more diverse talent is recruited from outside of the intermediary mortgage lending channel.

Mills reminded firms that the FCA is considering how to best use its powers – or it’s “supervisory toolbox” – to influence change, along with suggesting that “the diversity of management teams could be part of considerations for senior manager applications.”

Quite rightly there are more discussions now about diversity in recruitment shortlists, but a focus on the speed of hire and an emphasis on hiring someone who has done a similar role previously all leads to fishing in the same pools and interviewing those with familiar backgrounds for competencies, lived experiences and the range of immediate connections.

This leads to shifting diversity mixes between firms, whilst not changing the overall mix in the sector.

Changing the mindset on sourcing is one part of creating more diverse firms, but individuals from wider backgrounds will need assessment models to change to allow them to demonstrate their potential.

In the niche market of mortgage lending, a fundamental part of

Talk about the importance of doversity

disrupting the current under representation will be de-biasing the assessment tools used in the financial services market, so that skills, values and potential come to the fore.

This will allow sourcing to cast a far wider net without fearing that initial assessment tools disadvantage non industry experience.

FAST HIRING

Industry discussions accept that having a talent pool available which has been pre-qualified will help break the cycle that has prioritised hiring quickly, which is being acknowledged as a key reason people hire what they are familiar with, or hire from the same place as they have done before.

However, a highly engaged internal talent pool is largely only seen in mid-sized and larger corporates that have greater scope to dedicate resources and more opportunity to create secondments that benefit an individual’s progression and profile.

A lot has been written about the diversity of workforces reflecting the diversity of the communities that they work in, and how companies that bring in people that don’t look like the founding team will always have an advantage, because everyone’s experiences and views will be different.

A diverse team will be much better placed to build products and services for a more diverse range of customers.

Ultimately, the best way to boost diversity in your candidate sourcing is to ensure the brand and values of your firm prioritise people and opinions from all walks of life.

You should be talking about the benefits and importance of diversity with your team, getting buy-in, and ingraining those values into your company culture.

This makes it much more likely that candidates will feel that your company values their opinions and presence, and that it values different backgrounds and ideas, all of which can only be good for team morale and engagement. M I www.mortgageintroducer.com

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SERVICE

A positive year for intermediaries Stuart Miller customer director, Newcastle Building Society

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021 has been a very busy year for the mortgage market already, and we’re not even into Q3 at the time of writing.

The Bank of England’s latest release confirmed what all intermediaries and lenders already knew: March was a bumper month for lending.

Borrowers drew an additional £11.8bn against their homes, the strongest net borrowing on record since the series began in April 1993.

The previous peak was in October 2006, when net lending hit £10.4bn.

The strength in net lending reflected gross lending also reaching a new series high in March of £35.6bn. This was driven by the expectation of the ending of the temporary stamp duty tax relief at the end of March, which has now been extended to the end of June.

These incredible figures have prompted many to question whether this level of performance can continue to the end of the year, especially as the government’s furlough scheme and business loan schemes are due to end in the autumn.

Unlike the peak in 2006, when lending volumes were fuelled by selfcertified, interest-only and sub-prime lending, supporting borrowers from varied socioeconomic backgrounds into homeownership, this peak is very different for a number of reasons.

Firstly, all of this lending is underwritten within a very different regulatory framework, where affordability rules protect borrowers from over-extending themselves, even when it comes time to remortgage.

Secondly, the volume of people moving house in 2021 reflects a market www.mortgageintroducer.com

responding to a situation where very few people moved home for a large proportion of last year, coupled with changing lifestyle needs which have been very much influenced by the COVID-19 pandemic.

New working patterns, requirements for home offices and the demand for garden space has seen a dramatic shift in buyer behaviour.

Thirdly, the Bank of England money and credit figures also reveal how much liquidity there is available in the economy which remains unspent.

People have been paying off their credit cards and banking money saved as a result of being unable to go out for much of the past year.

Individuals continued to make net repayments of consumer credit totalling £0.5bn in March, while households are still saving significant amounts, with an additional £16.2bn deposited in the same month.

All at a time when deposit interest rates are at historically low levels.

Much of that money is being saved specifically to fund a home purchase, which will potentially offset any immediate drop in demand following the end of the stamp duty holiday in September.

To add to this, there is much talk of a range of private initiatives aimed at further supporting both first and next time buyers, following the changes to Help to Buy. This is good news for the growth of the new-build sector, which is already experiencing increased activity and a 10% surge in registrations during Q1, according to National House Building Council (NHBC).

We should applaud that, and we look forward to generating further growth as we lend our own support to market initiatives. There will be more on that in the weeks to come.

Fourthly, interest rates are near zero, and whilst the spectre of negative

interest has not yet materialised, the Bank of England will be keen to avoid derailing recovery by allowing base rate to rise too soon.

Any market instability would be extremely damaging, and the bank’s priority will be to maintain a steady course and maintain a low cost borrowing environment for the short to medium-term.

Inflation is the elephant in the room.

Anyone who has been able to indulge in a beer garden pint will attest that

“Unlike the peak in 2006, when lending volumes were fuelled by self-certified, interest only and sub-prime lending, supporting borrowers this peak is very different ” the cost of some items have increased markedly over the past year.

The Bank of England will need to keep an eye on rising prices, particularly as the economy reopens, delivering an expected spending rush as consumers tap into the savings accumulated through lockdown.

There are the obvious benefits – boosting growth and reducing the value of public and private debt, but it will require careful management to avoid inflation getting out of control and leaving us in a more challenging place from the one we currently inhabit.

Finally, the stamp duty holiday has undoubtedly ignited house prices, which in April were up more than 8% on the previous year according to the most recent Halifax index.

Some are questioning whether the bubble will burst. Whilst that seems unlikely given that supply is failing to satisfy demand by some considerable margin, the removal of the stamp duty benefit will likely see some normalisation of house price growth from October onwards.

All in all, I think we’re in for a busy second half of the year. In a rapidly evolving market, good advice is essential, with intermediaries in an ideal place to capitalise on continued demand for home ownership. M I JUNE 2021 MORTGAGE INTRODUCER

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TECHNOLOGY

Test and prosper Anthony Walton Xxxxxxxxxx CEO, xxxxxxxxxxxxxxxx, xxxxxxxxxxxxxxxx Iliad Solutions

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uilding societies and the wider banking community have played a crucial role in UK life for centuries.

For some, this longevity may be down to the provision of valued products and services; to others it may be the commitment to serving the local community, or the convenience of inbranch and online financial capabilities, to name just a few.

All points are valid, but for any financial institution to have not only survived, but thrived, for so long, a feeling of trust between the customer and the institution has unquestionably played a key role.

In fact, a recent Building Societies Association (BSA) report stated that 91% of customers agreed that their building society was trustworthy – an impressive statistic, even if it can be improved upon.

With such a valuable and hard earned reputation to uphold, how can this trust be maintained?

There are numerous ways, but today I’d like to touch on one point in particular: the ability to carry out safe and secure payments is a basic necessity, and absolutely vital in maintaining customer trust.

PAYMENTS TESTING

Every institution providing banking services needs to rigorously test its digital payments infrastructure.

Executives and their technical teams are intensely focused on avoiding a payments system failure, and getting it wrong has the potential for hugely damaging consequences, but are they going about it in the right way?

The right type of payments testing is essential to avoid unwanted glitches and their knock-on effects.

As many will recall, in July 2018,

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TSB’s half-year results revealed that the technology meltdown suffered earlier that year cost £176.4m and 26,000 customer accounts.

The subsequent IBM report into the bank’s failed attempt to migrate to a new IT system found that TSB had not carried out rigorous enough testing, and that there was not “evidence of the application of a rigorous set of go-live criteria to prove production readiness.”

More recently, the Confirmation of Payee initiative, which aimed to reduce fraud, has been so difficult to test and implement that many banks are reluctant to participate in phase two.

Payment system failures have no place in the future of banking on numerous levels – from the view of the regulator, the end customer, staff and the wider stakeholder spectrum. The right testing will help avoid a wide range of damaging situations.

WHAT’S WRONG WITH CURRENT TESTING?

The payments businesses of all banks and building societies have seen unprecedented levels of change, and while institutions are busy developing the latest tech and working with new suppliers, testing capability is largely lagging behind. The current approach can be characterised as follows:  The absence of either a permanent test hub or integrated test environment  Armies of staff often hired from specialist test resource suppliers  A focus on component-level testing with full end-to-end testing only when absolutely necessary  A per-project budget approach for both systems development and testing  Lack of automation  Dependence on manual testing facilitated by a complex maze of simulators (‘stubs’), in-house developed tools and ad-hoc code  Squeezing of the final testing stage due to time and budget constraints  A ‘mixed’ approach to DevOPS and Agile, changing the cadence of testing which can be complex to orchestrate with existing test tools.

It’s questionable whether a change in approach is happening fast enough.

Remember, the quicker and more safely you can test, the quicker the revenue flows from new initiatives.

EFFECTIVE PAYMENT TESTING

Is automation the answer? Ultimately yes, but payments testing can be complicated, and standalone, often desktop-based simulators are almost impossible to automate effectively.

Frameworks are then needed to control test data and collate results, leading to a pragmatic ‘silo’ approach, but with many shortcomings.

An overarching solution is required.

It is essential that payments testing reflects the real world, end-to-end process, with all its supporting interfaces and system foibles. This might involve testing legacy systems in parallel with new technologies.

Financial institutions first need to hold a fundamental review and change their approach to testing, ahead of automation. This involves simplifying, investing to improve their current practices, and then embracing automation with the latest testing tools and techniques. This investment must rationalise, simplify and automate testing, and provide a constantly available and full regression capability.

COVID-19 has also highlighted that test capability needs to be accessible anywhere in the world, by all involved in the design, development, testing and implementation of payment initiatives.

Institutions wanting to succeed also need to take their testing beyond automation to assure the quality of their next software release.

Only the proposed ground-up review of the current approach, coupled with a strategic investment in appropriate technology, will enable a move from the current basic payments testing to strategic business assurance.

Partnering with a progressive, specialist provider like Iliad Solutions will provide peace of mind in a rapidly changing, technologically driven, financial services environment. M I www.mortgageintroducer.com

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TECHNOLOGY

Efficiency is a way of doing business Steve Carruthers Xxxxxxxxxx principal mortgage consultant, xxxxxxxxxxxxxxxx, xxxxxxxxxxxxxxxx Iress

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he pandemic has become a long-term backdrop to our collective economic fortunes.

House prices and market activity are being supported by the successful vaccination roll-out, and as I write, lockdown measures are being relaxed, all of which will underpin confidence over the coming months.

The market is not without its potential bumps in the road, of course.

In the near future, the end of furlough and aftermath of some borrowers’ use of mortgage payment deferrals will challenge underwriters, but these are being countered by more state intervention in the form of the new home-buying support scheme.

All of this will inform the operational thinking, planning and resourcing that enables lenders to service pipelines that, for many, continue to be full to bursting. Lenders are already telling us that their lending levels in Q1 of this year are, to use a mot du jour, ‘unprecedented’.

COVID-19 has baked volatility into our market, but in the conversations I am having, lenders are beginning to contemplate business origination post-lockdown. Minds are turning once again to the competitive need to deliver growth.

This necessitates solving a conundrum that involves understanding how you deliver growth when working from home, with processes built for the old world.

It’s not universally agreed which new ways of working will persist into the future, nor is there any naive expectation that we will be returning to how things used to be. www.mortgageintroducer.com

There is, however, an acceptance that while operational capacity may have met the challenges of lockdown, and some of these are now retreating, other challenges are emerging to fill their place.

Operational efficiency will be essential if lenders are to cope with the new ones as well as some of the old.

What do I mean by new challenges?

The list is arguably long, and of course, cannot include the unknowns that we have learned to expect in the last year or so. But even in the past month or so, some major man-made changes have come to the fore.

One is the new treatment of IR35 contractors – many of whom work on improving the operations of banks.

The changes are profound for these individuals, in terms of personal finances and liabilities, and their contracting parties.

There is also the change to mortgages priced on LIBOR. By the end of the year, all lenders with borrowers on LIBOR deals must have moved them onto a new rate and have successfully communicated this – ideally with no borrower detriment along the way.

While all this is going on, lenders also need to assess what is really meant in terms of managing climate risk on back books, how this is implemented, and what it means for regulatory reporting and borrowers.

Competitive edge is the key to survival

These are examples, and they are clearly not exhaustive, but they make a point with regard to another wave of operational challenges that are coming down the tracks.

This illustrates that, while operational capacity has been crucial over the past months, the correct deployment of skills, expertise and talent over the coming months and years will be likely even more important if organisations are not to be stretched or lose ground to the competition.

Technology will help, because it can automate those processes that really shouldn’t absorb hours of human time in this day and age.

To ease the operational pain caused by events like a pandemic or seismic government regulatory intervention, understanding the easy wins and shortcuts when deploying people to the right pressure points is absolutely vital.

Whether it is to manage growth or deliver operational efficiency, technology will mean we all have to decide whether our old processes are right for the new times, and how much we are willing to change our mindsets to gain a quantum leap in one area that allows us to manage the challenges thrown up in others.

In this sense, technology is becoming – if it isn’t already – a permanent work in progress for most businesses. Finance is no longer just about banking, it is also about coding.

With the right technological support, the right people can spend their time dealing with the things that really add value, rather than fire-fighting the latest crisis or state intervention.

It may be that this is a generational event, and that the aftermath of COVID-19 will see more people with experience of programming in the boardrooms of our financial services companies. A little knowledge can be a dangerous thing, but no knowledge can be worse.

Every technology strategy path is as individual as the company undertaking it, but the steps to success are the same. If competitive edge is the key to survival over the coming years, then having the right technology to support growth will release the talent of the people to deliver it. M I JUNE 2021 MORTGAGE INTRODUCER

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CUSTOMER SERVICES

How consumers judge their advisers Michael Hanney director, ReviewSolicitors

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ven before COVID-19, the drive to online purchasing created a seismic shift in consumers seeking advice from review sites before making all kinds of purchases, including mortgages.

While professional review sites have always existed, with well-known titles such as Which, the move to online shopping has increased the willingness of consumers to be guided by their peers. More recently, this use of reviews has extended into professional services, and is gradually moving into financial decisions, such as choosing the right broker or lender.

If proof were needed of the growing importance of review sites in our lives, we need look no further than Trustpilot’s £473m floatation.

REVIEW SITES INCREASED SOPHISTICATION

However, while the effect of consumer reviews – and influencer role models – on online decisions is becoming widely recognised in almost every sector, its impact on the UK’s financial services sectors has yet to be fully felt.

In part, this is due to the fact that the original providers of business reviews, such as Google, lack the sophistication to look at businesses in a granular way. These generic review providers tend to have limited functionality and cumbersome processes. This is why you will often see more negative reviews than positive on these generic review sites, as your satisfied client lacks the incentive to engage, unlike the client who wants a rant.

This situation is changing rapidly as sector-specific review sites are

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developed. All readers will be fully aware of the likes of Trusted Trader which allows you to select from 30 or so trades.

In the UK’s professional services sector, consumers initially embraced the concept of reviews before engagement for legal services.

However, we would expect a similar pattern across other professional services, especially accountancy and of course financial advice.

Our own experience with ReviewSolicitors has shown an average of 135% increase in solicitors’ participation and a 142% increase in consumers accessing reviews in the last 12 months alone.

It’s also important to note that these reviews are much more granular, with consumers able to select from multiple categories of law. When consumers are shopping for advice on divorce, for example, they can select from seven sub-categories.

It’s easy to see how this level of detail could transfer to mortgage advice, from first-time buyers to buyto-let, with important ramifications for all professional services providers, including brokers.

REGULATORY INPUT

It’s worth noting that the Solicitors Regulatory Authority (SRA) is working with us to see if consumer reviews should be mandatory, and create greater transparency within the market. While I’m not aware of any similar conversations with the Financial Conduct Authority (FCA), it’s easy to imagine, especially when you consider some of the recent challenges with consumer experience and mortgages, for example.

IMPACT OF SECTOR-SPECIFIC CONSUMER REVIEWS

Unlike generic review sites such as Google, the impact of sector-specific

review sites can be dramatic on individual businesses, as the overall reviews are more balanced.

Yes, you still get negative reviews, but these are typically outweighed by a factor of 25 to 30 with positive reviews, meaning the overall impact is universally positive.

Feedback from lawyers says that reviews give clients greater surety and they are more likely to engage a firm as a result. So, why wouldn’t it be the same for brokers?

Our data shows that, on average, firms with positive reviews have 850% more enquiries on ReviewSolicitors.

The other notable fact in a COVID-19, home working world, is that reviews have removed many of the geographic boundaries that clients may have had.

EMBRACING REVIEWS

Currently there are no dedicated review site providers for mortgage advice, but we would still recommend advisers encourage clients to leave reviews on the likes of Google.

Where possible, have a firm-wide policy, especially where you know a client has had a positive experience.

MANAGING REVIEWS

Management of reviews is an article in its own right, so here are my top line ‘must dos’. Monitor everywhere reviews are posted. Register on major review sites, including the full company name and the website address so reviews are correctly associated with your business. Encourage positive reviews and never post fake reviews.

Negative reviews are no reason to panic, as they may well highlight a systemic problem that you were unaware of and can address. Have a policy for dealing with negative reviews – acknowledge the issue, apologise for the person feeling the way they do, and address it offline.

WHEN, NOT IF

Dedicated review sites for all financial services providers will happen.

Use this time to formulate policies and procedures, look at how other professions are handling the impact and build this into your business strategy. M I www.mortgageintroducer.com

REVIEW

BUY-TO-LET

The future of specialist BTL lending Ross Turrell commercial director, CHL Mortgages

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f I had £1 for every time I heard or read something which hinted at the demise of the buy-to-let (BTL) market over the years then I’d be an extremely rich man. Where would I invest this great wealth, I hear you cry?

In property, of course.

The past 20 to 25 years have seen a rapid rise in the profile and importance attached to the private rented sector.

A large proportion of this can be attributed to the launch of the buy-tolet mortgage, which was developed on

the back of growing confidence in the housing market, plus a shift in attitudes towards pensions and how to derive future income.

During this time, tenant demand has grown rapidly, and greater complexity has emerged around landlord requirements, funding capacities and investment opportunities.

CHANGING SECTOR

Specialist BTL lenders and their breadth of product offerings have changed the face of the sector.

Intermediary distribution channels have flourished, and the value attached to the advice process has soared for a variety of landlord types.

As demonstrated by its ability to absorb – and prosper through – the

many challenges faced over the past couple of decades, the buy-to-let sector is a resiliant beast.

Residential property has proven to be a remarkably reliable source of income for a range of buy-to-let investors – especially when compared to many other asset classes – and despite negative tax and regulatory changes in recent years, landlords and investors have always found ways to adapt.

Focusing on present and future developments, rental demand continues to rise across the UK. Proactive investors have taken, and are taking, advantage of some economic uncertainty and a variety of propertyrelated opportunities which have emerged in recent times.

These opportunities will continue to present themselves for proactive investors as dynamics continue to change and the mainstream lending community is tested in its capacity to meet a wider range of complex income scenarios and the changing employment landscape.

AFFORDABLE HOUSING

Specialist lending propositions will continue to evolve

www.mortgageintroducer.com

Another major factor which is likely to impact the BTL sector over the longer term is the availability of affordable housing. Despite some improvements made in homebuilding over the past few years, the pandemic has obviously had a major effect on these numbers, and with the target of 300,000 homes per year being built by the mid 2020s unlikely to happen, the supply gap will only continue to grow.

Specialist BTL lending propositions have come a long way in recent years in order to support and service a range of requirements, especially those of portfolio landlords and lending to limited companies.

These will continue to evolve to incorporate more common-sense underwriting, backed by sensible yet responsible criteria requirements and outstanding levels of service.

Technology will also be a future differentiator when it comes to making brokers’ lives easier, and those lenders that get this balance right will prove themselves to be the main driving forces in elevating this sector to the next level in 2021 and beyond. M I JUNE 2021 MORTGAGE INTRODUCER

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REVIEW

BUY-TO-LET

The innocence of youth Bob Young Xxxxxxxxxx chief executive officer, xxxxxxxxxxxxxxxx, xxxxxxxxxxxxxxxx Fleet Mortgages

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outh is the most beautiful thing in this world – and what a pity that it has to be wasted

on children.”

If you’re a curmudgeon, or as former England rugby captain Will Carling once described the 57 members of the RFU Board, “an old fart”, then you might well prescribe to the view above, which is attributed to that great wit, George Bernard Shaw.

However, if you’re in any way active within the property market, then I hope you’re slightly more in tune with the wants and needs of the market, and recognise just how important ‘youth’ and ‘new blood’ is to the entire market.

Purely from an advice perspective – although this is far more relevant to independent financial advisers (IFAs) and the like, but also to some degree mortgage advice – there is a constant debate about how the industry brings in new recruits.

FUTURE ADVISERS

The average age of advisers tends to be closer to traditional retirement age than those who have just left school or newly-graduated, but I’m pleased to say that we appear to be far better now, with academies, graduate training programmes and the like, which will hopefully ensure there is no shortage of advisers in the future.

This, of course, is not a problem unique to the advisory profession. As lenders, we are constantly looking to recruit, and we recognise that while experience is great, there is perhaps a greater value in taking a new employee through a training programme on the job in order to develop their skills and to produce the type of staff we want.

For the private rental sector (PRS), the question of youth and new blood is

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just as important – whether this is from a tenant or landlord perspective.

While renting is not the sole preserve of the under-40s, there are a greater number of younger tenants in the market for all manner of reasons, including house price levels curtailing the ability to buy, as well as a simple need to live near work, the flexibility of renting, or the chance to live in areas which are out of their price range from a purchase perspective.

I’ve read a lot recently about the ‘death of the city centre’ fuelled by a mass exodus of younger people out of the city during the pandemic, as this type of living loses its appeal with amenities shut down, and many of the benefits of city living were simply not available during lockdown.

CITY LIVING

There is an assumption that these individuals won’t want to return, but I’m not so certain.

From personal experience, I can point to at least eight 20-somethings – children of friends – who have indeed decamped from London back to their parents’ homes because of COVID-19, but are actually champing at the bit to get back, especially now that we are seeing the opening of those bars, restaurants, coffee shops, cinemas, theatres, and more, which make city living so appealing to this demographic.

Some city centre spaces have suffered, rent-wise, from a surfeit of properties coming onto the market due to the pandemic. I’m thinking specifically of AirBnB, which was pretty much wiped out by COVID-19, with many of these properties entering the assured shorthold tenancy (AST) market, increasing supply and impacting rents. However, these are now moving back the other way.

There is also conjecture about how city living might shift, but I only see good things here, especially if there is a change, for example, of some retail properties into residential property.

With chain stores moving out, there will be more opportunity for

independent businesses, and an opportunity to improve the quality of the living space, if – as I suspect – there continues to be a fall in the number of department stores.

“Youth is relevant in the landlord space as well. We need new landlords, just as much as we need new tenants” Imagine if we could translate the type of environment we see in places like Wandsworth, Battersea or Clapham in London to other cities around the country, creating a less homogenous space, with fewer chains and more character.

City living then becomes much more appealing to that young, professional crowd, and my hope is that acquirers and owners of those now-defunct big retail stores see the opportunity that exists here to create residential complexes that tie into this demand.

Youth is relevant in the landlord space as well. We need new landlords, just as much as we need new tenants.

It was therefore interesting to read some recent research from Knight Knox suggesting the average age of UK landlords has fallen, with almost half now under 40.

ATTRACTIVE INVESTMENT

This certainly chimes with the landlord borrower demographic we are increasingly seeing at Fleet.

We are much more likely to see applications from landlords in this lower age group, and it continues to show that property investment is an attractive, long-term option for younger professionals who are looking to diversify their portfolios.

This is a long way from ‘the innocence of youth’ and hopefully points to a positive future, full of possibilities and opportunities being grasped. So much for ‘the young don’t know any better’, eh? M I www.mortgageintroducer.com

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REVIEW

BUY-TO-LET

Landlords are looking to expand George Gee commercial director, Foundation Home Loans

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ike many lenders, we’re currently experiencing a surge in interest from landlords looking to both diversify and expand their portfolios. This is part of a wider picture where landlord demand remains strong and sustained, right across the buy-to-let (BTL) sector.

This trend was outlined in recent BVA BDRC Landlord Panel research for Q1 2021 which showed that – for the first time in four and a half years – a higher proportion of landlords are intending to expand their portfolio (19%) rather than reduce it (17%).

Within this, landlords with 11 to 19 properties were said to be the most likely to be looking to grow in the next year, following a nine percentage point increase compared with Q4 2020.

Landlords in the North East and Wales were highlighted as ‘most likely’ to be active in the BTL property market in the next year, with around half looking to either buy or sell.

It is telling that landlords with smaller portfolios are generally less optimistic than their larger peers, particularly with regard to the prospects for capital gains and their own lettings business. This is a factor which has been reflected in lending levels at the more professional end of the landlord spectrum.

This data represents positive news for the BTL sector, and offers valuable insight into what different types of landlords are looking for right now across their portfolios, large or small.

As a lender, we are always striving to know what landlords want, what a ‘typical’ portfolio might look like, and how various landlords are reacting to current market conditions.

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This is also incredibly useful information for intermediaries.

So, what does a ‘typical’ portfolio look like?

SIZE AND VALUE

 In Q1 2021, the typical portfolio was worth around £1.2m and generated an annual gross rental income of £54,000.  The average portfolio now includes 7.3 properties, down from 7.7 at the end of 2020.  Based on an average Q1 portfolio size of 7.3 properties, the typical property value was £168,000, generating an annual income of around £7,397 per property, or £616 per calendar month.

BTL BORROWING

 45% of properties in the average portfolio are owned outright, while 40% are funded via a BTL mortgage.  Around six in 10 landlords fund at least part of their portfolio through BTL borrowing, holding an average of 4.8 loans each.  For non-portfolio BTL landlords, the average loan-to-value (LTV) is 45.0%, whereas portfolio landlords – with four or more BTL mortgages – have a higher average LTV, of 55.8%.  The typical amount repaid annually by leveraged landlords continues to fall, down £4,720 from a year ago to £16,650. This indicates that in times of uncertainty, landlords have held onto cash they might otherwise have paid back in.  Overall, this equates to approximately £1,388 being repaid by the typical BTL landlord in a month, or £289 per leveraged property, compared with £330 in Q1 2020.

LIMITED COMPANY

 Whilst the majority of landlords rent their property as an individual (80%), 18% of landlords hold at least

“Landlords with 11 to 19 properties were said to be the most likely to be looking to grow in the next year” one of their properties within a limited company structure  For those with limited company ownership, the proportion of properties held in this way is rising as landlords look to maximise their tax efficiencies, up to 58% from 36% in one year.

DIVERSITY OF PROPERTY

 The profile of a typical portfolio remains largely unchanged, with terraced houses the most commonly owned type of rental property.  Portfolio diversity increases in line with size, with landlords holding 11plus properties in their portfolios having an average of 3.2 different property types, compared to the 1.8 different types held on average by those with 10 or fewer properties.  Relative to the rest of the country, landlords with property in London and the South East have a significantly higher incidence of flats in their portfolio and a lower incidence of houses.

HMOS

 House in multiple occupation (HMO) lettings continue to generate significantly higher average rental yields compared to other property types (7.5%).  Individual units within flat blocks and bungalows generate the lowest average rental yields at 5.8%.  Landlords letting to migrant workers and students achieve the highest rental yields, at an average of 6.9% and 6.7% respectively, with Universal Credit lets and lets to retirees also achieving above average yields (both 6.6%).

Diversity and the value attached to HMOs within a portfolio is an interesting point to finish on. HMO is a property type which will continue to appeal to many landlords, and is one which certainly features heavily in our product range and across the specialist BTL marketplace. M I www.mortgageintroducer.com

REVIEW

BUY-TO-LET

Time to re-enter the holiday lets market Richard Rowntree Xxxxxxxxxx managing director xxxxxxxxxxxxxxxx, of mortgages, xxxxxxxxxxxxxxxx Paragon

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he concept of travelling for pleasure dates back thousands of years, but the holiday as we now know it owes a lot to the industrial revolution.

In the 1800s, the growing popularity of the steam train for public transport enabled ordinary folk to leave smogshrouded cities and join the wealthy in what went on to become some of our most beloved seaside resorts.

Fast forward to today and things have almost come full circle, following the popularity of the package holidays that began during the post-war affluence of the 1950s. While package holidays remain popular, our travel infrastructure means that many people are again choosing to plan their own breaks.

Channelling the entrepreneurial spirit of Billy Butlin and Thomas Cook, people have spotted an opportunity to make money by letting out second homes that would have otherwise been vacant for much of the year.

The emergence of peer-to-peer accommodation services – AirBnB being the most recognisable – has provided a platform that links supply with demand, which has helped spawn what the government refers to as a ‘sharing economy’.

The 88,100 AirBnB listings in London in March 2020 was almost five times higher than the number in April 2015. That figure being from March 2020 is telling because, as we know, that was the time that COVID-19 put a brake on non-essential domestic and international travel, leading many lenders, Paragon included, to exit the holiday lets market. With holiday let owners facing voids for

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the foreseeable future, a significant proportion of properties were relisted as residential buy-to-let (BTL) homes, which resulted in oversupply in urban tourist hotspots, Central London and Edinburgh in particular.

Over a year on, and the holiday season is upon usm, while the easing of restrictions means UK breaks are no longer prohibited.

DOMESTIC TOURISM

The UK’s vaccination programme seems to have been successfully implemented, but the strategy to vaccinate in order of risk, while obviously correct, means that there are still significant numbers of people who won’t have received theirs yet.

Add to this the fact that progress has been slower in some of the countries that boast our foreign vacation favourites, and some may question whether it will be safe to travel any time soon.

I also expect that we will see a return of some of the factors that boosted demand for domestic tourism when lockdown restrictions were eased last summer. The list of travel corridors and quarantine requirements changed frequently, and despite many operators offering COVID-19 considerate refund policies, booking expensive overseas holidays carried more risk to health and pockets than many people were prepared to take.

Holidaying on home soil, however, offers an alternative, and holiday lets provide some unique benefits to travellers concerned about coronavirus.

Many listings are for entire properties, for example, so social distancing is easier compared to other types of accommodation where facilities and spaces are shared with other guests.

Lots of properties also allow pets, which I imagine will be a factor for the many people who have added an

extra member to the family during the pandemic and lockdown.

Research carried out by Sykes Holiday Cottages revealed that these factors are stimulating the domestic tourism market, with the last week in January 2021 seeing a 126% increase in bookings for UK staycations throughout July and August, compared to the same time in 2020.

Alongside the experienced professional landlords who carefully modify their portfolios in response to both short-term trends and broader societal shifts, reports suggest this demand could be piquing the attention of smaller landlords.

Along with the stamp duty holiday and the relative stability offered by property investment, a potential

“Furnished holiday lets can generate higher yields than long-term rentals, and landlords can also benefit from the way they are treated in regard to tax, so these remain a desirable addition to portfolios” staycation boom could be enough to tempt back to the market some of those that saw a bleak future for buy-to-let amidst speculation of rising arrears and voids around this time last year.

With the pandemic pushing up demand in some coastal and rural locations, bargains will be hard to come by, but I foresee no shortage for those looking to buy the right properties.

Furnished holiday lets can generate higher yields than long-term rentals, and landlords can also benefit from the way they are treated in regard to tax. So, even with elevated outlay costs and more intensive management implications, these remain a desirable addition to small and large portfolios.

For me, buy-to-let is an important part of the UK’s housing model, but holiday lets show that this market is not confined to residential business, and that a range of opportunities exist for investors. M I www.mortgageintroducer.com

REVIEW

BUY-TO-LET

One for the road Ying Tan Xxxxxxxxxx founder and chief executive, xxxxxxxxxxxxxxxx, Dynamo xxxxxxxxxxxxxxxx

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he purchase bandwagon continues to roll relentlessly across the mortgage market, with activity levels remaining high and confidence escalating across many sectors. So, is everything rosy in the garden, balcony, office or even garden office?

As reflected by the recent May downpours, not exactly. However, in keeping with my gardening analogy – as this is an area which will be getting more of my attention than ever in the coming weeks – this period of sustained rain has provided fresh life to many plants, setting them up for the summer months when they can blossom in full.

This is my way of saying that, whilst it’s not always been easy in recent times, and landlords are still facing their fair share of challenges, the positives across the buy-to-let (BTL) market still far outweigh the negatives.

LOCATION, LOCATION, LOCATION

Staying with the garden and outdoor space theme, research from the National Residential Landlords Association (NRLA) suggests that private sector tenants are leaving London in response to the COVID-19 pandemic. The data showed that landlords renting out properties in London were the only ones in the country to report that tenant demand had fallen more than it increased.

An estimated 56% of landlords with properties in Central London saw tenant demand fall in the first quarter of 2021 compared to the same period in 2020. In Outer London, 45% of landlords reported fallen demand, with 33% saying it had increased.

Tenant demand was said to be strongest in Wales, with 57% of landlords renting out property in that region reporting an increase over the www.mortgageintroducer.com

same period, compared to just 2% who registered a fall in demand. This was followed by landlords in the South West, where 53% highlighted increased demand, compared to 13% who saw a reduction. Overall, across England and Wales, 31% of landlords reported increased tenant demand for properties in the first quarter of 2021. This recovered from the 14% of landlords who experienced rising tenant demand in the second quarter of 2020 in the aftermath of the first lockdown.

Of course gardens do exist in London, but these figures demonstrate changes in attitudes towards rental properties and an increased appetite for additional space inside and outside a variety of tenants’ homes. This is especially true when it comes to incorporating home working, although this trend may change with the opening of offices and hospitality outlets in cities across the UK, as we take tentative steps on the roadmap out of lockdown.

The issue of city versus countryside living is nothing new, but changes in our working environment and lifestyles – or lack thereof – have led to many homeowners and renters assessing what they need from their home, now and in the future.

A RETURN TO URBAN LIVING?

The potential return to urban living was the focal point of a recent Zoopla study which outlined that rental demand is up by the greatest margin in central Edinburgh, rising 26% since Easter.

Central Leeds was next on the list, up 12%, followed by 7% in inner London and 5% in central Manchester. Despite the demand, stock is down by 0.7% in Leeds, 1.1% in central Manchester, 3.2% in central Edinburgh and 9.9% in inner London.

Rental declines in London were suggested to have bottomed out in February of this year, down 10% year-on-year, with overall London rents now running at 9.4% lower.

Average monthly rents in London are now at the same level as they were in December 2013, and the fall in the

capital over the past year has resulted in rents being at their most affordable for 10 years.

Outside of London, rents have risen at 3% year-on-year, the highest level of growth in four and half years.

Rents are said to be rising fastest year-on-year in the North East (5.5%) and South West (5.3%), the strongest rate of growth in a decade in these regions, amid increased demand and constrained supply.

“Additional tenant support and rebalancing portfolios will remain key to landlords’ ongoing success” The North East remains one of the most affordable regions in the country, with average rents absorbing 21% of the income of the average single earner pre-pandemic, compared to the UK average of 32%.

Current rental performance is being driven by a 59% uptick in demand for rental properties in the 28 days to the end of April, compared to the average demand recorded across the ‘normal’ markets of 2017-19. In the first quarter of the year, demand for rental property outside of London was 32% higher than the same period last year.

The supply of rental properties in most markets is failing to keep up with demand, and the supply coming to the market outside of London is 5% lower than in Q1 last year.

It’s always been important for landlords to keep abreast of trends when it comes to tenant demand and location, but this is more apparent than ever in the current ever-changing private rented sector.

Offering additional tenant support and rebalancing portfolios will remain key to landlords’ ongoing success, as will receiving the right levels of professional advice around better managing their borrowing requirements and watching their portfolios grow.

Now, where’s that trowel… M I JUNE 2021 MORTGAGE INTRODUCER

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REVIEW

BUY-TO-LET

Buy-to-let buoyancy Jane Simpson Xxxxxxxxxx managing director, xxxxxxxxxxxxxxxx, xxxxxxxxxxxxxxxx TBMC

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here has been plenty of positive movement in the buy-to-let (BTL) sector in recent months, which has been supported by numerous reports and surveys from different corners of the market.

Moneyfacts reported in late May that average buy-to-let mortgage rates have been on a downward trajectory and reached some of the lowest pricing since the beginning of the year.

It calculated that the average 2-year fixed rate across all loan-to-values (LTVs) was 2.95%, compared with 3.05% in March. So far this year, only January 2021 had a lower average, at 2.89%.

Clearly, an average calculation does not show all price movements, and some higher LTV products have increased, whereas the lowest 2-year fixed rate available via TBMC at the time of writing is 1.19%.

What it does show, though, is that there is healthy competition in the market, and that lenders are constantly tweaking their product ranges to meet customer demand.

landlords should investigate rent expectations and tenant demand for the particular area they are looking to purchase property. The highest rental yields recorded in the Paragon Bank survey were in the South West (6.7%) and the North East (6.6%).

Not only are there positive signs in the buy-to-let sector for landlords, but it appears that intermediaries are also starting the feel more confident in the market. According to Paragon’s recent quarterly Financial Adviser Confidence Tracker, half of intermediaries polled expect to write more buy-to-let mortgage business during the coming year than in the past year, which is the highest level of confidence found since 2014.

It seems that the appetite of lenders is also strong, not only with competitive pricing being evident, but also with the development of new product propositions and improving criteria.

The specialist BTL sector is certainly in a good state, with a wide selection

of providers available for complex cases, such as houses in multiple occupation (HMOs), multi-unit blocks (MUBs), semi-commercial and limited company applications.

More niche lending areas, such as holiday lets, are also improving, with Interbay recently joining other lenders in this arena.

DYNAMIC SECTOR

Other good signs for brokers and their landlord clients include the return of the Precise top slicing proposition, which allows applicants to use surplus portfolio rental income or earned disposable income to support their affordability assessment.

It is encouraging to see growing optimism across this dynamic sector, and it’s not unreasonable to expect some growth in lending in 2021, as key drivers such as tenant demand, strong rents and the availability of finance, continue to support the private rental sector in the UK. M I

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RENT GROWTH

There has also been news from Hamptons of a rise in rents, which may bode well for landlords. In its latest Lettings Index for April 2021, average rents rose by 5.9% in Great Britain, which was the fastest growth since January 2015.

Paragon Bank also reported that, during the first quarter of 2021, average rental yields across England and Wales were at 6%, up from 5.3% in Q1 2020.

This is encouraging news for potential property investors looking at the prospects for BTL, although the Lettings Index did show considerable regional variations, suggesting that

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There is growing optimism in the buy-to-let sector

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REVIEW

HELP TO BUY

Help to Buy still vital for first-time buyers Adrian Moloney group sales director, Precise Mortgages

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13,043 households. That’s roughly as many as there are in a city the size of Leeds. It’s a lot of people, a lot of families, a lot of hopes and dreams for the future.

It’s also the number of households which have been able to purchase a home thanks to the support of the Help to Buy Equity Loan Scheme since its launch in 2013.

The figure was recently announced

by Housing Secretary Robert Jenrick to celebrate the 300,000th purchase made with help from the scheme.

introduced, which work out at 1.5 times the average price paid by firsttime buyers in each region of England in August 2018. Or it could have been caused by the stamp duty holiday on the first £500,000 of property purchases introduced last summer, which will start to be phased out from the end of this month.

Whatever the reason for the surge, I firmly believe that Help to Buy will continue to be as popular with firsttime buyers as it has been for the past eight years, especially as house prices in the UK are now the highest they’ve ever been.

According to the latest UK House Price Index, the average price in March

stood at £256,000. This is £24,000 more than at the same time last year.

During that period, prices increased by 10.2%, marking the highest annual growth rate the UK has seen since August 2007.

FIRST STEP

That’s a lot of money to anyone, and especially for those looking to take their first step on the property ladder.

I believe that in times when it’s difficult for people to get on the property ladder, it is vital that they continue to receive all the support they need to ensure they can benefit from a scheme which has already played such an important part in helping tens of thousands of aspiring homeowners.

Precise Mortgages was one of the first specialist lenders to enter the Help to Buy market.

We recognise just how important the scheme has been, and we will continue to support it before it finally closes for business in 2023. M I

NEW PHASE

Jenrick said the scheme had been more popular than ever in the three months leading up to the end of 2020 – with more than 21,000 completions, the highest quarterly total on record and 40% higher than the same period in 2019 – as well as revealing that the vast majority of purchases (82%) had been made by first-time buyers.

As you’re probably aware, the scheme moved into a new phase a couple of months ago.

The new Help to Buy Equity Loan Scheme (2021-2023) is now only available to first-time buyers purchasing a new-build property, and there are regional price caps in place, with each area of the country having a maximum property value.

The phasing out of the old scheme may well have had something to do with the rush towards the end of 2020, with second-time movers wanting to get their applications in before it was closed to them.

Buyers may also have been spurred into action before the price caps were

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The new Help to Buy Equity Loan Scheme is only available to first-time buyers purchasing a new-build

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PROTECTION

Take time to explore protection options Andy Philo Xxxxxxxxxx director of strategic partnerships, xxxxxxxxxxxxxxxx, Vitality xxxxxxxxxxxxxxxx

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he UK housing market has reached an all-time high, with more than 180,000 properties selling in March alone.

Policies and incentives put in place to help prop up the property market during the coronavirus pandemic have no doubt been a driving force in this huge growth.

Unlike changes in recent years which have been aimed at helping first-time buyers get a foot on the property ladder, the removal of stamp duty on the first £500,000 of a home’s purchase price is an incentive that will have encouraged movement from all types of house buyers.

As the holiday comes to an end, it is likely we will see mortgage transactions returning to more normal levels.

MORTALITY AND MORBIDITY

The pandemic has no doubt raised customers’ awareness of their own mortality and morbidity.

Because of this, it is likely that there is increasing evidence consumers are more aware of the risks they face, and therefore have a greater appetite to discuss insurance.

Research in ReMark’s Global Consumer Study 2020-21 shows that four in 10 believe COVID-19 has changed their attitude to risk and the value of insurance.

Purchasing a home is a key life event, and this acts as an important touchpoint for a conversation about financial protection.

The mortgage advice process is often considered to be lengthy. As a result, it might be tempting to skip additional conversations about what are often

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considered to be ‘nice to haves’, such as protection insurance.

Unlike buildings insurance, protection insurance isn’t compulsory; however, it is an important safety net, and should be discussed with every mortgage client.

This doesn’t need to be at the point of the mortgage application, but should certainly be before completion.

Finding the right way to talk to clients about the likelihood of serious illness or worse isn’t always easy.

Tools such as the Vitality Risk Calculator can help you to quantify the risks in a way that’s more meaningful.

LIKELIHOOD OF DEATH

For example, the calculator allows you to produce a client-specific report showing the likelihood of death, serious illness or of being unable to work for one month or more due to illness over the term of the mortgage.

This approach helps to focus the client’s mind on the risks they face, even if they think they are relatively young and healthy.

For example, for a couple both aged 35, their combined risks over the next 30 years look like this: • Risk of death: 12% • Risk of serious illness: 27% • Risk of being unable to work for one month or more: 80% Taking the time to explore scenarios that could leave the client financially vulnerable is a valuable exercise.

While life insurance will be familiar, this shouldn’t be the start and end of the protection conversation.

Asking clients to think about the people they know who have been diagnosed with a serious illness, or who have been unable to work through illness for a period of time, is a good starter question. This can be followed up with questions around how these people coped financially.

“While life insurance will be familiar, this shouldn’t be the start and end of the protection conversation.

Asking clients to think about people they know who have been diagnosed with a serious illness or unable to work through illness for a period of time is a good starter question” What’s more, while being able to keep paying the bills is the most obvious benefit of protection against illness or incapacity, the peace of mind that comes from removing financial worries is equally important, especially when on the road to recovery, enabling the client to focus on recuperation.

It is also worth remembering that it isn’t just the illness, death or incapacity of the mortgage holders that can cause disruption to income, and therefore difficulty in maintaining their mortgage payments.

For example, there is the issue of serious illness affecting a child. Dealing with such a traumatic experience will most likely result in time off work, and a resulting reduction in income.

It can also mean increased expenditure such as trips to hospital, medical expenses and home schooling.

UNEXPECTED EVENTS

So, for those clients with children, it’s worth raising the subject of children’s serious illness cover, which would pay out in the case that their child became seriously ill.

Even if a limited budget means that clients can only afford life cover for themselves, it is possible to add children’s serious illness cover with Vitality from as little as £2 per month.

As the needs of clients differ, it’s important to take the time to help them explore what’s important to them, and what cover would be suitable.

That way, even more people can be protected against life’s unexpected events. M I www.mortgageintroducer.com

REVIEW

PROTECTION

Roll on the tech revolution Mike Allison head of protection, Paradigm Mortgage Services

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t one of our recent Paradigm online events, we gave the audience a presentation on iPipeline’s Solution Builder product, which is something we have offered free to Paradigm Protect members for some time.

We had a number of conversations with advisers during that session, and it got me thinking about how technology within the protection industry has moved on – not always at the pace we may have wanted, but certainly in great strides from the ‘good old days’.

It wasn’t too long ago, comparatively speaking, that tech was a necessary evil for providers and advisers alike.

Exchange and Assureweb were the main staples, with Webline also a growing player in the early ‘90s.

If I am correct, price changes had to be ‘loaded’ onto the mainframe systems some time before they went ‘live’, and this effectively dictated when price changes were made for the majority of the protection market.

Comparisons were just pure price, and there was little to differentiate product and underwriting terms – these were ‘learned’ by the advisers, and most had non-medical limit ‘sales aids’ pinned to their PCs. It seems a long way from how COVID-19 has driven relatively – that word again – quick change amongst technology providers in a number of key areas.

Given the rapid changes being made by underwriters on non-medical limits in the early days of the pandemic, and the frustrations of getting medical information from GP practices, providers thankfully – in the main – moved fairly swiftly to try and increase limits to get clients covered.

The availability on the Solution Builder platform of a comparison of www.mortgageintroducer.com

those limits took just four weeks to put in place – that used to be about the time lag expected to get one rate set changed in the ‘90s.

BETTER CLIENT OUTCOMES

We know from most of our conversations how important the added value services have been to so many people in the UK population, and this has been backed up by the usage stats published recently.

We may never know just how valuable some of those benefits have been in literally saving lives, especially the mental health supports.

The ability to link to client needs within Solution Builder and the Quality Analyser tech ­developed by FTRC has again highlighted how technology is making it easier for an adviser to carry out their job, and to therefore deliver better quality outcomes for their clients.

Added value benefits will continue to play a major part in the – hopefully positive – perception of our industry for many years to come.

Usage of these benefits, in my view, is a ‘claim’ on a policy without any of the negatives coming from that term, or indeed a hike in premiums as a result.

When it comes to our working practices, too, COVID-19 has driven us into a totally new era.

It will be interesting to see if we all properly go back to how things were before, in terms of face-to-face advice.

Zoom-type technology of course existed long before the pandemic started – we just didn’t find a way to use it efficiently.

The challenge for us now will be pushing back the boundaries even further and grasping technology to change the way we do things, without being forced into it as a result of something as major as the pandemic.

Giving more access to better management information would be a good start, though.

While not stretching the boundaries beyond the stratosphere, I have heard positive comments on the

Vitality initiative to get a view into underwriting systems and gain likely indicative decisions.

So, what else exists out there that will change the way we operate, beyond things like e-signatures and Zoom, which themselves are now so popular they have become additions to the English language?

In the conversations I have with providers on artificial intelligence (AI), I am still not convinced the protection industry is grasping all of the opportunities that exist.

Everyone has differing views on how AI might be used in the underwriting and distribution process. Never mind the promotion of protection to clients and linking the whole process – will AI be the very thing that helps us get the protection gap reduced, because products will be more available to an increasing number of people, as it was in the home service days?

“The challenge for us now will be pushing back the boundaries even further and grasping technology to change the way we do things, without being forced into it” Hopefully, it will play a part. We know that more of the traditional barriers for purchasing life assurance are being broken down.

Claims statistics look better, premiums for some products are still dropping – making cover eminently affordable to most – and underwriting is getting easier, so there must be a way that AI can support the effort to ensure that more people are covered for all of those things that they need to be covered for.

As I said at the outset, we are taking baby steps. Things are far better than they were in the ‘90s or even compared with the way things were 18 months ago – but roll on the revolution. M I JUNE 2021 MORTGAGE INTRODUCER

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GENERAL INSURANCE

Celebrating office culture post-COVID Geoff Hall chairman, Berkeley Alexander

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e’ve been gradually returning our people to the office over the past few weeks, and it has been a joy to see everyone safe and face-to-face again after so long apart.

The enforced virtual workplace has been functional and effective from an output perspective, and some elements of a hybrid working model will need to remain as we provide a safe socially distanced working environment, but

the office culture is a key element to our business. The smiling faces of those employees returning is testament to the enduring benefits of this culture. Most have found it refreshing and energising, boosting morale and productivity.

One team member, for example, said she felt a renewed sense of belonging, and described the feeling of ‘privilege’ to come into our new offices. There is no substitute for the team spirit you get from working face-to-face, sharing news or comments, or just a good joke, out loud.

The fact of the matter is that building and sustaining a good culture is much easier in a physical environment, where the more mundane activities and functional tasks are balanced by

A true specialist?

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he word ‘specialist’ often gets overused, and risks losing its meaning. For 40 years, I’ve personally been a specialist in general insurance (GI) for the mortgage market; in that sense, the knowledge and expertise I’ve gained over the years is, I believe, clearly demonstrated, but what is a ‘specialist GI provider’?

Does this mean they have years of knowledge and expertise under their belt? Does it mean they are a niche provider, only focused on certain GI products, or that they have broad access to a wide range of GI products?

I’d argue that it’s vital to demonstrate all three of these to be a true specialist.

Niche providers can be seen as a ‘one trick pony’ – specialist in one product, but perhaps lacking the knowledge or access to markets to offer anything else.

In the current market conditions, you’ll be looking to maximise revenue and increase customer loyalty and ‘stickiness’ wherever possible, deepening those client relationships www.mortgageintroducer.com

through effective cross-selling. GI can be very effective at achieving that.

Equally, beware the provider that promises to be all things to all men. In 40 years, I’ve yet to meet the broker that’s a true specialist in everything.

I know what I know, but more importantly I also know my limitations – and who to contact about things beyond my knowledge.

The truth is that a true GI specialist has an enviable combination of deep knowledge and expertise in some products, but knows when to hand over to an expert in other areas, meaning that all your clients’ GI needs are served, whatever challenges the market faces.

Whether it is residential or commercial, trade credit, latent defects, indemnity insurance, or health and private medical, for example, a specialist broker will seek GI solutions, tapping into buying power and expertise from across its group network.

That’s a true GI specialist. M I

the emotional benefits of bonding with workmates, celebrating together, learning from others, and chance encounters that can even change our careers.

Long-term remote working works up to a point, but my biggest fear is that it risks taking us from the coronavirus pandemic to a loneliness pandemic, with potentially terrible costs.

Also, if we’re honest, it hasn’t really been possible to replicate remotely the all-important office rituals that bind us together. Welcoming and onboarding new starters, office banter, or simply sharing a slice of birthday cake just doesn’t work virtually.

A virtual workplace devalues company culture in the long term.

In the post-pandemic world, workplaces will undoubtedly need to evolve – it would be folly to think things could simply go back to the way they were – but our offices provide a sense of purpose, wellbeing and motivation which should not be underestimated. M I

Gazebo crimes

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uring COVID-19 we have been spending far more time. Sales of gazebos, all-weather furniture and gas heaters have boomed! Investing in our gardens has been a natural response, but it also means many more people could now be underinsured.

Standard home contents policies will typically include some cover for loss or damage to items in the garden, such as plants and furniture, but it may be only a few hundred pounds, and some may provide no cover at all. Contents policies also usually include a single-item limit.

Many homeowners and renters don’t realise that insurance doesn’t always cover outside items as standard.

Buildings insurance often extends cover to include outbuildings – sheds, home-offices and greenhouses – but this needs to be included in the overall sum insured.

Equally, if clients have valuable garden equipment, they may be able to pay an additional sum to protect it.

It’s worth checking garden assets when arranging or reviewing clients’ cover.

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REVIEW

EQUITY RELEASE

Ignorance of benefits is natural Claire Barker managing partner, Equilaw

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igures from the Equity Release Council (ERC) have revealed that demand for equity release (ER) products remained consistent during the first quarter of the year, with £1.4bn of property wealth being unlocked to the end of March – a 7% rise on the same period last year.

The figures have also revealed a significant upturn in the number of new and returning customers recorded during a lockdown, with 16,527 clients being served as opposed to 13,617 during Q2 2020 – a telling indication of the upturn in consumer confidence over the past 10 months or so.

NEW CUSTOM

However, with stringent restrictions on social movement and other seasonal trends continuing to inhibit full-blooded economic activity, the ERC data also revealed a noticeable reduction in overall streams of new custom, with figures dipping from 11,079 in Q1 2020 to 10,030, while the total number of customers served represented the quietest start to a new year since Q2 2017 – a bittersweet, if entirely understandable, outcome.

Nevertheless, many have welcomed the figures as an encouraging sign of things to come, particularly given the backdrop of winter infection rates and hospitalisations during this period, and have pointed to the growth in ER product options, rates and regulatory reforms over the past few months as an obvious springboard for future growth.

Yet while confidence remains deservedly high, research by Sunlife has raised some serious questions as to how the industry engages

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with prospective clients, and how it disseminates vital product information.

The survey of 1,000 homeowners aged between 50 and 80 found that almost 80% of respondents remain unsure of how ER works, with 40% not knowing that cash lump sums are tax free and almost 50% unaware that equity amounts can be released from a mortgaged property, provided that sufficient funds can be released to repay the existing mortgage.

It also found that a quarter of respondents believe children could be burdened by debt, while more than a third believe that they would risk losing their home.

Sunlife ascribed these figures to the existence of a number of myths or misconceptions, and emphasised the need for industry members to explain the ins and outs of products in a better and more accessible manner.

Despite the upturn in clients using lender or broker sites to access product information, the ability to dispel or debunk these misconceptions earlier and at a wider level remains elusive.

That’s not to say that the sector hasn’t benefited enormously from the growth in media coverage over the past few years, or that the resulting publicity hasn’t generated greater awareness (and uptake) of ER products.

Nevertheless, it’s also fair to say that the benefits have been undercut, at times, by the impact of sensationalised news stories, which often play a significant role in spreading biases and misconceptions amongst consumers.

Indeed, as the old media adage goes, ‘if it bleeds, it leads’, and there is something to be said for the fact that biased news can often leave a longer lasting impression than stories which offer a more nuanced approach.

REACHING PEOPLE

Some within the industry have argued that a focus on social media platforms

or remote communication channels would enable the industry to reach larger numbers of people, while also delivering a more manageable and reliable means of client interaction.

There is little doubt that both options have their merits, within a limited confine, but while remote channels may be beneficial at a formative stage of enquiry, any focus which places a reliance on these tools at a broader level could lead to advisers missing vital information or overlooking the threat of external influences, opening the sector to an upturn in complaints, scandals and regulatory censure.

Likewise, a badly judged use of targeted advertising on social media platforms could open the sector to accusations of exploitation and ultimately hinder its popular appeal. In other words, context is everything.

While fancy advertising campaigns and hi-tech marketing strategies may be regarded as the most efficient means of stimulating customer growth and education, Nielsen research has confirmed that word of mouth remains the best – and cheapest – form of promotion, with 90% of consumers saying that they would trust an endorsement friends or family over any other type of advertising.

Indeed, analysts estimate that as many as 50% of purchasing decisions are dictated by this factor, with the growth in online product reviews merely compounding the trend.

So, the ability to offer a service which is professional, competitive and safe remains the foremost method for generating trust, while a business model which emphasises incremental, clientorientated growth offers an infinitely more stable commercial proposition than one which emphasises pizazz and media blitz.

While misconceptions and misunderstandings amongst homeowners may be frustrating, it’s worth remembering that it is entirely natural for consumers to be ignorant of the all of the ins and outs of a financial product until such time as they come to need it.

It is our ability to cater to these needs that will ultimately determine our future success. M I www.mortgageintroducer.com

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EQUITY RELEASE

Be careful around the notion of vulnerability Stuart Wilson Xxxxxxxxxx CEO, xxxxxxxxxxxxxxxx, xxxxxxxxxxxxxxxx Air Group

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his is undoubtedly a busy time for advisers of all varieties within the mortgage and home finance markets.

If the advisers and firms I speak to regularly are anything to go by, borrower demand right across the piece – whether residential, buy-to-let (BTL), later life lending or anything in between – is very strong right now and there is plenty of work to do.

Of course, the temptation within any particularly busy period, especially if you are a small to medium enterprise (SME), is to make hay while the sun shines – to put all energy and resources into writing the business, and to consider those things that might be deemed less important at a later date, when demand for advice is perhaps not so all-encompassing.

However, when it comes to many of the responsibilities that come with the advice profession, that simply isn’t possible or desirable.

Regulation, for instance, stops for no one and as someone much wiser than me once put it: regulators regulate, that’s what they do. The day they stop regulating is the day they lose their raison d’être, and we shouldn’t expect that outcome any time soon.

As we will all know, the regulatory responsibilities of those active in the later life lending space are many and varied. Particularly given the fact that these clients are older, there is always a greater level of concern from the Financial Conduct Authority (FCA) about the potential for poor consumer outcomes, which might be exacerbated by age or vulnerability, and the nature of, for example, equity release www.mortgageintroducer.com

or retirement interest-only (RIO) mortgage products.

It’s in this space where we have to be incredibly careful – specifically when it comes to the notion of vulnerability, and the regulator’s approach to vulnerable customers, when seen in light of the pandemic and the burden this has laid on people. This is clearly going to be a major priority, not just for now, but forevermore.

CONSUMER PROTECTION

Being busy, you might not have seen the very latest missive from the FCA, which certainly feeds into this. While it is not specifically a vulnerabilityfocused plan, it undoubtedly has plenty of read-across, and even in isolation, is something that advisers and firms are going to need to get their heads around in order to deliver the higher level of consumer protection the regulator wants to see.

This is the new Consumer Duty consultation outlined recently by the regulator, which is almost an addendum to the principle of treating customers fairly, and is an expansion of “existing rules and principles to ensure firms provide a higher level of consumer protection consistently which will enable consumers to get good outcomes.”

The Consumer Duty has three elements, and already the regulator is talking about firms facing investigations, action and enforcement if they do not adhere to them.

These cover:  The Consumer Principle covers the overall standards of behaviour expected, such as that a firm must act in the best interests – or act to deliver good outcomes – for retail clients.  So-called ‘cross-cutting rules’, requires three key firm behaviours, such as taking all reasonable steps to avoid foreseeable harm to customers, taking all reasonable steps to enable

customers to pursue their financial objectives, and acting in good faith.  Finally, there will be a “suite of rules and guidance that set more detailed expectations for firm conduct in relation to communications, products and services, customer service, and price and value.”

Now, the obvious reaction – but without doubt the wrong one – is to suggest that these principles are not new at all, that your firm follows them as a matter of course, and that, on the face of it, they seem like the sort of common sense later life advisers have been applying to their client relationships since time immemorial.

However, claiming common sense, or that you already do this, is not going to be enough to evidence everything the regulator will want you to do here.

You might believe that the notions of honesty and transparency are hardwired into your business, the way you interact with clients and the outcomes you deliver, but can this actually be evidenced?

At a recent ‘Breakfast with Stu’ meeting, we heard from Tim Farmer of TSF Consultants – one of the leading experts in the country on vulnerability, mental capacity and financial advice – on this FCA consultation paper, what it means for advisers, and what the regulator wants to achieve.

There is that focus on vulnerability, but also a much broader requirement for advisers to put themselves in their customers’ shoes, to ask the questions: would I be happy to be treated this way? Am I being as clear as possible?

Am I using too much jargon? And am I helping or hindering in customers?

Plus, in a digital age when the online journey and the technology we use is so crucial, how are you managing the consumer journey digitally?

There is a considerable amount to consider, and this is just the start.

The consultation is open until the end of July, after which the regulator will consult on its proposed rules before making any new ones by the end of July 2022. It’s worth responding, as this paper will undoubtedly shape the regulator’s thinking and the market rules that govern all advisory firms for many years to come. M I JUNE 2021 MORTGAGE INTRODUCER

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EQUITY RELEASE

Better conversations with clients Alice Watson head of marketing and communications, Canada Life

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ver the past 20 years, equity release has transformed to be more transparent, with clearer product features and a greater focus on customer outcomes.

However, it is still challenging for clients to look beyond past issues.In fact, Canada Life research shows that 77% of advisers have faced challenges selling equity release products because of negative preconceptions, while 59% found a lack of customer understanding hard to overturn.

We need a step change in the way we think about what our total wealth can

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do for us in retirement. Pensions and property have never been more closely aligned when it comes to retirement planning, as people are less likely to be able to afford their retirement goals on a pension alone.

After asking advisers, behavioural psychologists and people currently facing retirement, Canada Life has come up with some top tips on how to better communicate equity release.

First, don’t assume, just because your client is in their 30s or 40s, that it is too soon to start talking about property wealth. The sooner we start to turn the dial on how equity release products are constructed, the earlier we can prevent misconceptions from taking hold.

Next, relatively simple changes in wording can have a dramatic effect on how a client responds to equity release. For example, talking about a

‘property’ rather than a ‘home’ is less emotive, allowing the client to focus on the merits without their judgement clouded by emotional attachments.

The type of property a client has can have an impact, too, affecting their willingness to take on debt in retirement. However, we know that many people also want to ‘age in place’.

The adviser’s role is to understand these factors beforehand, allowing for the best possible conversations.

We have a collective responsibility to dispel the myths that often surround equity release. Property wealth is likely to play a part in most modern retirement journeys, with people working for longer and taking different paths to saving for later life.

This will change the financial adviser relationship, and we must adapt to support their changing needs. M I

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SURVEYING

Solutions from surveyors and lenders Xxxxxxxxxx Steve Goodall xxxxxxxxxxxxxxxx, managing director, xxxxxxxxxxxxxxxx e.surv

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hen tragedy occurs, it is not always clear how best to proceed, but a thorough understanding of the scale and scope of the problem is essential.

Tragedy is often caused by a litany of seemingly small, incremental decisions and failures that can deliver a seismic and heart-breaking impact.

As the enquiry into the Grenfell Tower fire reveals a complex and complicated truth, all the composite parts of the housing and lending industry need to reflect on what they can do to make things better.

The first step in that process is increasing our understanding of what can be done to help.

The issues that are facing residents extend beyond diagnosis and remedial action. Elements such as supply chain issues affect everyone trying to deal with this problem.

It was reported recently that the shortage of metal cladding and roofing has reached crisis point, with contractors being told fresh supplies won’t hit sites until next year. The shortage of these materials is now a major problem across the industry.

The public could be forgiven for thinking that nothing has really changed since June 2017.

Indeed, we have seen recently that we are a very long way from being able to say that such a tragedy could never happen again. There remains much soul-searching, and work, to be done.

But things are changing, albeit stealthily. Judith Hackitt’s 2018 report has set in motion a chain of proposed transformation, much of

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which the government has said that it is committed to implementing.

The Building Safety Bill is now going through Parliament, and the new regulator it establishes is currently recruiting hundreds of staff. It will require resources, but the oversight is right.

In a post-Grenfell world, the scale of the cladding crisis has seemed, wrongly perhaps, unfathomable and overwhelming.

Cladding: Everyone must focus on solutions

Thousands of homeowners have become mortgage prisoners in their high-rise flats, with the timescales and costs for testing and remediation works often unknown.

It is still unclear just how widespread the problem is, and homeowners and their mortgage providers are sometimes not even aware of a problem until they try to sell or remortgage the property.

This is creating well-documented misery for homeowners, and an impossible situation for lenders that want to help customers move forward.

As property risk experts, the surveying and valuation industry has its role to play in helping everyone focus on solutions.

To help identify and manage the level of exposure presented by highrise residential properties, e.surv has developed a unique and powerful database of apartment blocks in the

UK that may be the subject of secured residential lending.

It is an important step that leverages the knowledge and expertise of our nationwide team of more than 600 Royal Institution of Chartered Surveyors (RICS) registered surveyors, who are in the final stage of assessing every block to determine whether it would require an EWS1 form.

Where EWS1 forms have been returned, or remedial works carried out, these are logged against each block to provide a ‘red amber green’ (RAG) status. We also record the rating contained within the EWS form.

A dedicated, chartered surveyor-led team updates the status of each block as new information is received, including dates and signatories of forms.

This means we can provide real-time data on any apartment and it is possible to see at a glance if a development is still waiting to be assessed, has been certified as acceptable to proceed, requires works, or has been remediated.

Lenders can access data at origination to determine whether to progress a mortgage application for a property in a potentially affected block, or to assist with back-book analysis to determine the level of exposure.

Clearly, the lending community needs surveying expertise to understand the level of its commitment, but statutory bodies have also expressed interest in using our work to assist with data modelling in policy areas, and to inform decisions about the cost allocation of any remedial work.

We are building out our cladding experience and expertise so that clients can benefit from it. The data has the power to make a real difference to people’s lives and give confidence to lenders; our bespoke risk-management tool can benefit them and paint an accurate picture of the real situation as it evolves for other stakeholders.

Solutions like this are only one small part of trying to help solve some of the issues facing people who are often, ultimately, the customers of our clients, consumers of public services and the constituents of MPs. I really believe that if we can turn our minds to addressing problems, we will emerge all the better for it. M I JUNE 2021 MORTGAGE INTRODUCER

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CONVEYANCING

How advisers can keep pipeline cases moving Karen Rodrigues sales director, eConveyancer

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here is a big ticking clock above the property market at the moment. Even though the government saw sense and extended the stamp duty holiday deadline to the end of September, advisers will know only too well that plenty of their clients are starting to fret about the prospects of getting their proposed purchase over the line to ensure they avoid a tax charge.

Advisers play a big part here. We all know that their role is far more than simply finding the best product for their client – the best advisers are, effectively, partners for their clients.

That means not only highlighting additional financial areas that those clients should consider, such as protection, but also going the extra mile in helping cases to keep progressing so that they complete in a timely fashion.

We’ve been speaking to advisers across the country to highlight the important job they can do to ensure pipeline cases keep moving from a conveyancing perspective, to avoid the stress and financial impacts that unnecessary delays can bring.

SOMEONE YOU TRUST

The first step, really, is to think carefully about where you go with that case. Picking the right panel manager is crucial – you want to trust that they will provide you with a range of conveyancers that know what they are doing, and have the experience necessary to help get that case concluded at a decent speed.

Of course, picking the right panel manager will likely extend beyond cost and include the additional services and

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features which can also help keep the case moving.

At eConveyancer, for example, we’ve invested a lot of time and energy into our service team, ensuring that no matter when an issue with a case crops up, someone is on hand to help.

Making proper use of any service team available can make all the difference between getting a case over the line promptly, and a purchase turning into a nightmare due to lengthy – and avoidable – delays.

AN EYE FOR DETAIL

One of the biggest factors in any case is the accuracy of the details a conveyancer receives about the client.

If there are any issues that could raise red flags – like borrower names not exactly matching the identification documentation provided – then this will inevitably lead to delays.

That attention to detail needs to extend to the ordering of the clients, too – if there are joint borrowers, then the first client named will be regarded as the primary contact.

Discussing with the clients who they want to have as the primary contact, and then making that clear in the documentation, will be a big help in getting the case completed swiftly.

The best advisers boast a great eye for detail when it comes to the terms and conditions of a mortgage product. It’s easy to pick out the deal with the most attractive headline interest rate, but that doesn’t make it the most suitable.

Instead it’s about casting your eye over every important facet of that deal.

That same skill is invaluable when it comes to conveyancing documentation, spotting possible issues and queries that could come up and lead to delays.

Communication, too, is absolutely key, beyond just the way we speak with our clients. It’s important to talk to the conveyancers, too, so that everyone involved is clear about what’s required.

For example, there will be times when sales and purchase transactions that involve multiple participants require two separate instructions. Speaking to your conveyancing partner at the outset will help you establish whether this is the case, helping get everything lined up in time.

Ultimately, the more that we talk to each other, the less likely we are to find problems emerge.

CUTTING OUT DELAYS

All brokers will have their own horror stories, where it took forever to get a case over the line because of inevitable toing and froing of paperwork.After all, relying on the postal service for ferrying documents can be a fraught experience.

Technology can provide a big help here, as we have seen first hand with our own DigitalMove platform. This brings all of the stakeholders in a case together and keeps them updated on what’s happening with that purchase, as well as what tasks need to be carried out next. It means that everyone is kept up to speed, while the fact that documents can be signed digitally means we aren’t overly reliant on the postal service.

Of course, systems like DigitalMove can only make a difference if the stakeholders make the most of it. From a client’s perspective, that means engaging with the system and getting set up with a password within four days of case instruction. Advisers can help cut out those potential delays by ensuring that their clients are registered with DigitalMove as soon as possible.

Similarly, advisers can help the case move along by ensuring clients complete their starter pack as soon as they get it, since the conveyancing process simply cannot begin otherwise.

It is always a good idea to make sure that clients fully understand how important such documentation is.

The housing market is already in a somewhat pressured state, and that is only likely to increase as we head towards the stamp duty deadline.

By keeping up communication and ensuring details are correct at the outset, advisers can play a vital role in helping those cases complete long before the deadline is reached. M I www.mortgageintroducer.com

CONTACT A MEMBER OF THE TEAM TODAY TO FIND OUT MORE MATT BOND 07525 456 869 S P E A K TO A MEMBER matt@mortgageintroducer.com

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REVIEW

CONVEYANCING

Experience and quality at every stage Mark Snape chief executive officer, Broker Conveyancing

H

ere’s a quick ‘starter for 10’ for those reading who are already homeowners: how many of you bought the first home you offered on?

Let’s rephrase that to the first home where you had your offer accepted, and you started along the process of purchasing – where you were genuinely invested in buying that home, both emotionally and financially.

For some, moving from would-be to actual first-time buyers might be a relatively smooth process, but the likelihood is that – at the very least – there were obstacles along the way, big and small. I imagine that it ended up costing more money, time and resources than envisaged at the outset.

Looking just at the cost, we can see just how potentially dysfunctional our house purchase process can be. According to recent research from Aldermore, first-time buyers collectively lost more than £400m in the last year alone from purchases falling through. If you break it down, this adds up to £2,912 per first-timer.

That’s a staggering amount, and while 50% of those reported that their aborted transaction was down to the unique nature of the pandemic, that is still a significant number of people losing large amounts of money in any ‘normal year’.

Furthermore, Aldermore estimates that as a result of the pandemic, first-timers faced additional costs of £1.67bn, which works out on average at £5,870 each.

Doing the maths, that is £8,782 in total lost, with the added slap in the face that this money, for the most part, www.mortgageintroducer.com

can’t be recouped and will need to be found again in the future, when they go through the whole process again.

Just as a final wound, given the return of 95% loan-to-value (LTV) mortgages recently, the buyer has just lost the equivalent of around three-quarters of a 5% deposit on the average house price in the UK, which is £250,000.

That would pretty galling for anyone, but even more so for someone attempting to get into their own home for the very first time – someone who may well have spent a considerable amount of time saving that money, and who may now be placed back way behind the starting grid as a result.

“What is appreciated by firsttime buyers is the presence and guiding hand of the adviser to take them through a process which will be alien to them” It strikes me as quite remarkable that we could have a process which risks alienating people, and costing them serious money they can ill-afford to lose, the very first time they engage with it. Nevertheles, that’s exactly what we currently have, and it seems all the more bizarre that the house purchase fall-through is perceived as something of a rite of passage that all would-be homeowners have to go through before they ‘earn their stripes’ in order to be deemed ‘worthy’ of buying a first home.

Would we allow this in any other walk of life? The first time your child was allowed to go off to the sweet shop and buy some sweets for themselves, would it be deemed a test of character for the shop owner to take their money and not give them any sweets, suggesting this will make the sweets

that much more delicious the next time they were allowed to buy them? Of course not.

Yet here we are, with a house purchase process which pretty much tells its first-timers to expect the worst, and hope for the best, and that should they be lucky enough to buy that first home without it falling through, then they should be grateful.

I’m not sure you could do a much better job of putting people off from ever trying again, and in a way this might be responsible for some of the practices we do see, such as gazumping or gazundering, or the outright suspicion amongst those involved.

The root cause here is, of course, a lack of certainty across the piece. Add to this a fast-paced marketplace such as the one we have now, with huge demand, supply that is not able to keep up, a strong, competitive mortgage marketplace with good lender appetite, and so on, and then with the process we have, you ultimately concoct a recipe where fall-throughs become ever more likely.

There are clearly measures which could be introduced to cut out a lot of this uncertainty, stemming from better provision of upfront information, so that there are no surprises further down the line as we have now when surveys are completed. I’m also aware of a push towards reservation agreements, widely used in the new-build space, which tie in both parties and result in a financial loss for those who pull out, as they have to pay the costs of the other side.

What is also undoubtedly required, and appreciated, by first-time buyers is the presence and guiding hand of the adviser to take them through a process which will be alien to them, and which could – if fate conspires against them – result in severe financial lost.

In that regard, this is not just about taking the client through the complexities of the mortgage process, but the whole purchase process, ensuring that they are represented by quality, experienced professionals – whether the adviser or the conveyancer – who can give them the absolute best chance of exchange and completion, without the nasty fall-throughs that can afflict far too many transactions. M I JUNE 2021 MORTGAGE INTRODUCER

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THE OUTLAW

THE MONTH THAT WAS

THE

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

THE

produce the cash avalanche in completions that was expected.

The market has definitely cooled in places, and perhaps some prospective buyers have now concluded that the inexorable rise in prices has patently outstripped the savings gained from the stamp duty concession?

This might well have prompted several lenders to commence their autumnal remortgage feeding frenzy a season earlier than initially planned.

Some of the rates out there right now are, well, lush.

Ally this with an absolute glut of product transfer opportunities now prescient up ahead, and alert and industrious brokers won’t suddenly find themselves facing a famine any time soon.

THE

AND THE

W

hatever you might think of the vengeful Dominic Cummings, I couldn’t help listening to his testimony last month and feeling slightly vindicated. Readers will know that I’ve been calling out this sh*t Cabinet and its lazy and vain PM for some time now.

Certainly nothing that the crazed Cummings uttered has altered my views, and my only regret is that all of this incompetence and cronyism really does appear to be ‘priced in’ by the population. What a cliché that is...

I wonder if – when I next try to engage with a lady in All Bar One – she will have ‘priced it in’ that I am not the athlete I once was?

In a not altogether surprising parallel, it’s the same as our approach to the Financial Conduct Authority (FCA), isn’t it? We know them to be bungling bureaucrats, but we simply have to accept it. More on that later.

May was a quirky month. Talking to lenders, it seems that last month didn’t

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Jordan Pickford: England’s very own flapping Hancock

Southgate: Four right backs? Bottler

www.mortgageintroducer.com

Conversely, a strategy famine plus an increasing dearth of confidence does – and indeed should! – exist around Ing Er Lun’s footie right now.

Let’s face it, Southgate got exceedingly lucky in Russia three years ago, with a soft draw and low expectations.

Three years on and there has been scant improvement. Rashford and Sterling couldn’t trap wind.

Pickford is our vain and flapping version of Matt Hancock, and with the four right backs named in the squad, Southgate is clearly a bottler when it comes to making clutch decisions. The omens aren’t favourable.

Three final thoughts on the Euro’s: How can Italy be twice our price? Wales will struggle this time too, but plucky Scotland could well be playing an under-prepared England at the perfect time.

I will be avoiding wee Bob McSinclair at all costs if Bannockburn is re-enacted.

POOR TIMING

Talking of time, timing and even timekeeping, we come ultimately back to the FCA. A shocking five weeks to consult on key changes to our sector and livelihoods…

REALLY? The regulator’s still-at-home mandarins clearly have bigger agendas to address – such as mowing the lawn, doing their Peloton classes, or simply watching ‘Loose Women’ on TV. Incredibly, though, they do have time for ringing up certain valiant lenders, themselves trying to be progressive in getting more of their staff back to work, only to boll*ck them for doing so.

Dominic Cummings: Vindication

Cummings and the Cabinet: What a sh*t show

It wouldn’t do to have their own indolence and lily-liveredness shamed, now would it?

You couldn’t make it up. But then again why should such things ever surprise us?

Because for our £700m a year, of course.

As with Boris, our Football Association, our NHS’ leadership and our national soccer coach, incompetence and inefficiency really is already ‘priced in’ isn’t it?!

Thankfully, it’s been a record year for the market already, and the best for seven years. Which certainly wasn’t priced in when we all shut down in March 2020!

So, we’ll take it. I’ll be seein’ you. M I JUNE 2021 MORTGAGE INTRODUCER

49

INTERVIEW

E.SURV

The Goodall place S

teve Goodall left ULS Technology in September 2020 after over three years, during which time he held the roles of managing director and, latterly, chief executive.

He is now managing director of e.surv, a subsidiary of LSL Property Services, and the UK’s largest valuation provider, directly employing more than 600 residential surveyors across the UK. Ryan Fowler uncovers some of the experiences that have informed Goodall’s journey, and learns about his ambitions for e.surv.

We have had a couple of unprecedented years since you left the survey and valuation market – now you are back, what has changed?

I’ve been away from surveying for a few years, but my work in conveyancing meant I was never really that distant from the valuation and property risk sector. It certainly feels familiar.

Of course, like everyone else, we are still working our way through the issues raised by the pandemic, but much of what I am encountering now feels pretty much where I left it.

What do you mean by that?

Well, the trends in the surveying sector, and society more generally, have been with us for a long time: low interest rates, state support for mortgage affordability in one shape or another, too little housing stock for the demand, an aging population, the growing gig economy across all the age ranges, and increasing demand for more single dwellings.

These fundamentally underpin the use, need and value we apportion to housing.

On top of all that, you have the specific mortgage market dynamics, such as largely static transaction

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numbers, technology changing the way everyone works, and new regulatory requirements.

It all means we must be alive to the pressures and opportunities these things bring.

So what are the opportunities for e.surv?

I think the opportunities are formed of three distinct parts. The first is to ensure that we continue to do the day job and improve where there is room and need to do so.

We also need to ensure that people are clear about the expertise, experience, and talents we have here and the value those things can bring to them.

In terms of mortgage valuations, the first step is to double down on our efforts to ensure we are making the most, and delivering the very best, of what we already do.

Our clients need to know, through experience, that they are getting the very best products at the best possible price.

We have an opportunity to deliver real value at scale that works for lenders and surveyors – I wouldn’t fancy trying to do this without scale, to be honest.

What I mean by that is that we need to lead the market, protect the integrity of the advice we offer and consolidate, so the commercials can work for everyone involved.

Delivering at scale allows us to do that and protect the quality of what we do.

The second part is to look at things we can do that go beyond ‘business as usual’ and add value to clients’ understanding of the property market and the opportunities and risks they face.

Specialisms and digital products are things we already offer, but we can do more.

We must also focus on identifying new opportunities to lend and when to advise not to. Whatever we advise www.mortgageintroducer.com

INTERVIEW

E.SURV Ryan Fowler speaks with Steve Goodall, managing director of e.surv, as he takes us through his journey in the market and aspirations for the business

Steve Goodall

on policies, that ethos must permeate through to the service provided by our valuing surveyors.

The third aspect is to look at markets inwhich our skills can have a real impact, but in which we don’t currently operate.

This might be within residential lending, but may well extend beyond.

Your previous roles have all seen you deliver some significant change into the businesses you have run – where has that appetite for change come from?

Like everyone else, I suspect my childhood informed a lot of my views.

Growing up in Manchester, my dad owned and ran a shop, and I remember him counting and bagging up the week’s takings on the dining room table on a Sunday night, ready for banking .

It made me realise that running a tight ship was important, but it could never come at the cost of your customers. They come first.

He worked incredibly hard – six days a week as well as most evenings – and he ran his business from the coalface, so to speak, so he knew there would be nothing to count if he didn’t deliver what his customers wanted. If there is no need to fulfil, there is no business.

That principle doesn’t change, whatever the size of your business. We need to listen to clients, advise them, and add value to what they do.

All clients are important, and few want exactly the same thing.

We have clients who put a premium on volume delivery – I get that. My early background was in manufacturing, so I understand the value of establishing consistent performance and increasing productivity.

But as those who know me will understand, this is not a race to the bottom on price. Professional services has always struggled with that conundrum of being → www.mortgageintroducer.com

JUNE 2021 MORTGAGE INTRODUCER

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INTERVIEW

E.SURV treated like a commodity and yet trying to explain the value they add.

But there is huge value in what surveyors do. In fact, that understanding of property and the nuances around it is likely to become more important in a world of high prices and high loan-to-values (LTVs).

Delivering at scale is the only way to realise that value in a way that works for all concerned.

It’s about delivering what people want, and then over delivering on that.

My dad evolved his business from a confectionary convenience store to a convenience store and deli. At the time, it was an incredibly brave thing to do.

He closed it for 10 days to refurbish it and everyone said ‘don’t do it’, but he went ahead – and it worked a treat.

He reinvested in the business, changed his product line, but focused on quality. The result was that people ultimately came from miles around for home-cooked deli produce. He also remodelled the space in the shop so he could produce deli goods for delivery.

When he eventually sold the business, the buyer changed all the suppliers, cut the costs, cut the quality, and people stopped coming.

The upshot of this is that, in my view, your business must always be about quality and innovation.

The world around us is changing all the time, making new demands, and creating fresh opportunities. This is as true for the valuation and surveying sector as any other.

What might those innovations look like?

In the immediate future, we know there are vast resources of data that can really help inform better decision making and improve processes. These are disparate and not always readily easy to tie up into a discreet service.

Nevertheless, data and digital services will be key, as they enable us to put our expertise in front of anyone.

The rapid rise of technology and data as a force within service and advisory businesses has removed the geographical constraints that once meant locality was key to getting something done.

In our own world, we have already seen growth in the use of automated valuation models (AVMs) and desktop valuations. This is a change in delivery that shows no signs of abating over the longer-term.

There are exceptions, of course, in markets like equity release and buy-to-let, in which the condition of the property is integral to the underwritten risk.

Equally, when lending is being done at high LTVs, understanding the asset on which you are taking security is very important, and we are seeing a new demand for that now.

However, for more straightforward lending at lower LTVs, a physical inspection is less necessary for many than it used to be.

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Where we have new opportunities is in using the great pools of data out there to build new products that fulfil a need in property risk management.

For me, it’s about using digital and data to address a real need.

I’ve spoken before about our UK cladding portal, but it is a great example of the application of our knowledge and insight to enable a desktop appraisal of any block with potentially defective cladding.

Its success rate is over 95%. We are in the process of improving this product by identifying owners, too.

The point here is that this kind of proposition delivers information in a way that allows lenders to identify problems as they arise, as well as ones that are already on their back books.

The format may have changed, but the fundamental knowledge and expertise has not.

This is true of other propositions we have, such as our New Build Remote Valuation solution and our approach to climate change.

Understanding lenders’ property portfolio risk means understanding the climate impact.

Whether it’s about the property or the funding obligations, environmental considerations are important.

Moody’s is just one example of an agency that is introducing a rating system for issuers and transactions against environmental, social and governance (ESG) criteria, as well as credit impact scores.

For lenders, the green agenda is likely to drive most of their innovation moving forward.

We need to be part of that solution, because understanding property value within this context will be crucial.

What are your plans for the future?

Looking further forward, we are beginning to reimagine what is possible for a company like e.surv to deliver.

The combination of scale, added value services, and extensions into other markets is a hugely exciting prospect.

We have a vast amount of talent, expertise and experience in the company.

I suppose, looking back to look forward, you could say that there is a theme in my working life.

I have always enjoyed working with a group of people who are striving to achieve something different for a business.

The reinvention we undertook at LGSS in terms of delivering added value propositions to property risk, and then at ULS in terms of rewiring the conveyancing process and building the DigitalMove platform, are good examples of what can be achieved with a clear vision and good leadership.

We owe it to our customers to deliver the very best we are capable of, and we owe it to ourselves to do that and create new opportunities if we want to build a sustainable business. That’s what I plan to do. M I www.mortgageintroducer.com

Part of the Mortgage Introducer family. @MortgageChat | Mortgageintroducer.com

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I

Maa Bond Commercial Director Maa@mortgageintroducer.com 07525 456869

LOAN INTRODUCER

SECOND OPINION

On your hike…

Loan Introducer gets the expert take on the recent Financial Services Compensation Scheme fee hike

T

he Financial Services Compensation Scheme (FSCS) recently revised its levy forecast for 2021/22 down from £1.04bn to £833m.

Nevertheless, even with the £206m reduction, this is a substantial increase on its £700m 2020/21 levy.

With costs continually increasing for second charge brokers, Loan Introducer asks: “Will the recent hike in FSCS fees be too much for some second charge firms?”

Robert Sinclair chief executive, AMI, AFB BOB

The increase in costs for firms is significant. As well as the FSCS fees, the cost of professional indemnity (PI) cover continues to rise, as does the Financial Conduct Authority’s (FCA) consumer credit fee.

The issue of rising fees will result in either the costs being passed on to the consumer, or a reduction in profitability for firms.

Many of these firms may decide that the cost of doing business is not worth it any more, and that is a position some firms will be in.

If a firm is not doing more beyond just second charge business, such as unsecured and secured loans together or mainstream mortgages alongside seconds, it might struggle in a modern regulated world.

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Paul McGerrigan Paul chiefMcGerrigan, chief executive officer, executive Loan.co.ukofficer, Loan.co.uk

The second-charge market is really split in two. On one side, you have a small cohort of brokers who are genuinely doing all they can to do right by their customers and reduce the fees they charge.

On the other side are those who continually charge consumers as much as they can get away with. In most instances, the fee they charge is in excess of 10%. I have no idea how that can be justified in 2021.

Sadly, the effect of the recent hike in fees for the FSCS will be detrimental to lower fee charging brokers. It will ultimately make the market less competitive, because it will put pressure on the lower fee brokers not to continue reducing fees, while additional costs such as the FSCS fee will be easily swallowed up by high-fee brokers as their margins are much higher.

Bradley Moore managing director, Brightstar Financial

The increased levy by the FSCS is significant, but the second charge mortgage market is growing and there are continuing opportunities in this area for those firms that remain committed to the sector and to their

clients. It does, however, put greater emphasis on firms being able to offer a more holistic service and establish additional income streams from other product areas. Where firms don’t already have expertise in those areas, partnering with a specialist distributor can be an accessible and scalable way for firms to grow their businesses.

Barney Drake, chief executive officer, Specialist chief executive officer, Mortgage Group

Barney Drake

Specialist Mortgage Group

FSCS levies are just one of the several invisible costs that we are committed to and have no influence over. The fact is they must be paid.

The industry creates the ‘problem’, therefore the industry collectively must compensate to redress the problem.

This levy, plus increasing PI costs, FCA fees, staff wages, pension contributions, National Insurance (NI) contributions, and service charges on rent, are all just other examples of such costs that we have to incur, and for which we depend on broker fees and procuration fees.

Such income must not only pay for the more visible direct costs, but firms must also ensure adequate financial resource provisions are in place to pay for such essential costs as and when they unexpectedly arise.

So to answer the question, whether this cost will be too much for some firms is down to whether they have adequate financial resources, and only time will tell whether it’s too much. www.mortgageintroducer.com

SECOND OPINION

Steve Walker

Did you know secured loans can be used to fund staycations?

managing director,managing Steve Walker, Promise director,Solutions Promise Money

Second charge brokers will find it hard to swallow any rationale for why they should suffer financial penalties to bail out a failed scheme which has nothing to do with their sector and was set up in 2005 – 11 years before second charge brokers were forced to become regulated.

Brokers are consumers too. Many are sole traders, and yet they are suffering financial loss through no fault of their own, and they certainly were not made aware of these costs and liabilities when they agreed to be regulated. This scenario is so akin to mis-selling – it’s laughable.

The regulators rightly want to eradicate mis-selling from the intermediary sector, yet they seemingly pay little heed themselves to the principles they expect brokers to abide by.

Who regulates the regulator?

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Simon Mules commercial director, Optimum Credit

Fiona Hoyle head of consumer and mortgage finance, FLA

We echo the recent comments shared by the Association of Mortgage Intermediaries (AMI) on the FSCS levy increase aimed at mortgage brokers – the sevenfold increase on the previous amount is startling.

While we can’t speculate whether the fees will be too much to handle, this is only going to increase existing burdens on firms at an important stage of economic recovery.

“We echo the recent comments shared by AMI on the FSCS levy increase aimed at mortgage brokers – the sevenfold increase on the previous amount is startling” FIONA HOYLE www.mortgageintroducer.com

“Ve ea asp que om

We’re Expertise You Can Trust.

Get in touch today Marie Grundy 01709 321 665 sales director, www.nortonbrokerservices.co.uk West One Loans

THIS INFORMATION IS FOR INTERMEDIARIES ONLY AND SHOULD NOT BE DISTRIBUTED TO POTENTIAL BORROWERS.

JUNE 2021

MORTGAGE INTRODUCER

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LOAN INTRODUCER

SECOND CHARGE

A diverse range is key to fulfilling needs Barney Drake chief executive officer, Specialist Mortgage Group

B

y the time you read this we will be just a week or so away from the end of June stamp duty holiday deadline, albeit with the considerable caveat that the government could extend this again.

While that seems incredibly unlikely – we’ve not had anywhere near the clamour for extension this time as we saw in the early part of the year – we shouldn’t necessarily rule it out.

I do, however, suspect that there’s a large proportion of property market stakeholders who are looking forward to a move back towards normality and will be hoping the current situation does not change.

We are, therefore, working towards a more ‘normal’ market – whatever that means.

STEERING THE MARKET

The government’s decision to phase out the stamp duty holiday – with a lesser saving up until the end of September – will undoubtedly help many purchase transactions to get over the line with some money saved.

From our perspective it seems like the right thing to do in order to, hopefully, steer the market away from any sort of cliff-edge drop in activity.

Indeed, you might already sense the beginnings of a shift towards ‘normality’, at least when it comes to purchasing. The latest residential property data from HMRC recently revealed that the number of transactions in April was 35.7% lower than in March.

That was always going to be the case, because many people were still working towards an end of March deadline

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before they were even provided with the extension, but there is also a case to be made that as the two deadlines come and go, we’ll begin to see the impact in terms of a less frenetic purchase market.

“Applicants are becoming less focussed on consolidation, and more so on home improvements and raising money for family members” However, that certainly doesn’t mean that activity across the board is going to come to a screeching halt; if anything, what we might lose in purchasing we are likely to gain in terms of remortgaging, product transfers and borrowers looking to capital raise against their existing properties for all manner of reasons.

SECONDS DEMAND

Over the past six to eight months, this part of the market has continued to grow, specifically in terms of second charge mortgage demand, but also across other product solutions which focus on capital raising, and the usage of that money.

Knowledge Bank’s top five criteria searches in the second charge space recently contained three specific ‘capital raising’ items, those being ‘for purchasing a buy-to-let (BTL)’, ‘for home improvements’ and ‘for debt consolidation’.

Here you can see what is driving demand for many existing homeowners, who clearly don’t wish to remortgage or product transfer, but still want to use the equity they have in their properties in order to meet their current needs.

One further point to note, specifically around the searches for capital raising for debt consolidation, is that while this was in the top five, it was the fifth most

searched-for term behind buy-to-let in second place, and home improvements in fourth.

That certainly chimes with what we are seeing from a second charge perspective, as applicants are becoming less focused on consolidation, and more on home improvements and raising money for family members.

Again, the post-pandemic themes in the housing market are starting to be seen here, with a huge increase in the number of homeowners seeking finance to carry out home improvements.

With more people working from home, there is a growing need to add in home offices, converting garages and the like, while also ensuring the outside space available is utilised in the most appealing way.

If we’re going to be spending more of our work hours at home, then the need to have those properties looking their best and offering as much as they can to the home worker is clearly pushing people’s finance agendas.

The final point to make here around capital raising is that there are other products available to help with various different needs.

For instance, while seconds run through our veins, so to speak, we do offer the full suite of specialist finance products, such as bridging, commercial mortgages, and the like.

We’ve certainly noticed, more than perhaps ever before, a much more diverse range of capital-raising requirements, with a particular increase in the appetite to borrow for opportunistic development projects, whether short or long-term.

GO-GETTERS

In that sense, clients are not letting the grass grow under their feet in this environment – there is a gung-ho, go-getter attitude at work, with many people being inspired to act because of the enforced inactivity placed upon them by lockdown.

The good news for advisers is that a specialist like ourselves can take the client through the whole gamut of options available to ensure they get the right product for their needs.

It therefore remains an excellent time to do business together. M I www.mortgageintroducer.com

LOAN INTRODUCER

SECOND CHARGE

Non-occupiers turning to seconds Steve Brilus chief executive officer, Evolution Money

T

he second charge mortgage market is on an increasingly sure footing at the moment.

There is no avoiding the fact the pandemic had an impact on demand – homeowners understandably focused on more pressing issues, while some lenders pulled back from their usual activity as a result of uncertainty.

However, things have been improving for some time. This has been borne out by the latest figures from the Finance & Leasing Association (FLA), which showed that in March there were 2,048 new second charge agreements, worth a total of £88m.

That’s the highest new business volumes seen since March 2020 and a testament to the resurgence of the second charge market.

Little wonder that Fiona Hoyle, director at the industry body, said that the FLA expected to “see a strong rebound” in demand over the coming 12 months.

NON-OCCUPIERS

Advisers are very familiar by now with how second charge mortgages can help their owner-occupier clients with things like home improvement projects and debt consolidation.

However, one of the biggest growth areas we have seen for second charge mortgages at Evolution Money comes from owner non-occupiers – those who don’t currently live in the property they are looking to borrow against.

There are all sorts of drivers for this activity. In some cases, it’s a property owner who simply hasn’t moved in yet.

For example, they may have purchased the property but need to carry out some renovation work before they can call it home.

In other cases, it’s a client who has inherited a mortgaged property. www.mortgageintroducer.com

They may want to move into the property themselves or sell it on, but in its current state it isn’t quite fit for purpose and so needs some form of refurbishment work.

Owner non-occupiers can be landlords, too. We’ve seen significant interest from property professionals who want to improve the energy efficiency of their property, both in order to meet the stricter regulations covering the energy efficiency rating of tenanted properties, but also to help the property appeal to a wider group of potential renters.

Then there are the accidental landlords, who have bought a new place but have had to let out their own home as it hasn’t sold.

In these cases we’ve seen clients look for funding to help carry out works on the property to improve its appeal, so that it stands out and attracts the right quality of tenant.

PERFECT OPTION

Clearly, that’s a varied group of potential borrowers and reasons for wanting to borrow. What they have in common, though, is that for each of these types of owner non-occupiers, a second charge mortgage can be the perfect fundraising option.

Often, these clients will have an outstanding mortgage against the property already which they don’t want to change.

Their adviser has already landed them a great rate on that first mortgage, perhaps a 5-year fixed rate which still has a good few years left to run.

They could remortgage to raise the money they need, but doing so would see them sacrifice that low rate and likely leave them having to hand over substantial amounts in early repayment charges to boot.

The prospect of that financial double whammy is not an enticing one.

A second charge mortgage provides a much more budget-friendly alternative.

By borrowing against the equity already held in the property, that initial mortgage is left untouched, allowing

them to enjoy the benefits of that low rate for the full term.

Meanwhile, the funds raised through the second charge loan can be devoted to whatever refurbishment and property improvement work they want to focus on.

SWIFT FUNDING

Crucially, the turnaround times for second charge mortgages are incredibly quick too, often much speedier than a traditional first charge mortgage, meaning your clients get their hands on the funding they need swiftly, and so can get on with that project.

A second charge mortgage may not be the first option that springs to mind for clients in this position, yet it can be just what those owner non-occupier borrowers need.

Having dealt with borrowers in this position of late, we’ve worked hard to ensure that Evolution Money can best meet their needs, and so can offer owner non-occupier loans of up to £50,000, including to those borrowers who are self-employed or who may have adverse credit.

Affordability is always a crucial element that has to be taken into account, and so if there is no tenancy agreement already in place with potential tenants, the mortgage payments and property costs will be included within that assessment.

VERSATILE OPTION

The FLA is right to expect second charge mortgage use to jump in the months to come, as it is such a versatile option for those looking for help with debt consolidation.

The difficulties of the last year have meant that significant numbers of borrowers have run up debts in a variety of areas and want the certainty that comes from debt consolidation.

Nevertheless, it’s crucial for mortgage advisers to be aware of the other types of client, like those owner non-occupiers with property projects, for whom second charge loans could represent an excellent option. M I JUNE 2021 MORTGAGE INTRODUCER

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SPOTLIGHT

A developing picture Jessica Bird sits down with Jonathan Rubins, director of Alternative Bridging Corporation, to take a look back at the events of the pandemic, and ahead to the future of the market

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or Alternative Bridging Corporation (ABC), looking back over the events of 2020 is a matter of more positives than negatives.

It is a chance to reflect on the successful move to remote working, and smoothly adapting those processes which previously needed to be face-to-face. However, while many businesses are reportedly planning to maintain this as the ‘new normal’ going forward, for Jonathan Rubins, director of ABC, it is also a case of understanding the value of what went before.

He says: “We learnt that we could work from home really successfully, which a lot of people were quite nervous about.

“But we’re very collaborative in the way we work, so obviously it’s mentally tough. We achieved it and it was great, and we’ve learned some lessons from it.”

Rubins adds that while the firm did not slow down on completions, there were some difficult moments, mostly around getting out to see and value properties.

“Getting the asset team out was quite difficult for a while,” he says.

“The way we work on development finance is that we like our asset team to see it before we lend, to meet the borrower and see how they work.”

For the market as a whole, Rubins reflects that some major predictions, such as that automated valuation models (AVMs) would be a saving grace, never quite came to fruition.

He explains: “Some of the things that were going to be such a big deal turned out not to be. We do [AVMs], but equally I don’t think they’ve been the answer to everything that everyone thought they’d be.”

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Jonathan Rubins

In addition, while technology has of course been a key component in every business’ ability to face the trials of the pandemic, Rubins does not predict the kind of revolutionary change that many have been touting.

“Some of it has been really good, particularly centralised documentation and working in the cloud,” he says.

“Technology is great, but we work in a very personal business, which is massively driven by relationships. It’s all well and good saying ‘you can put your application in via our app, and then our bot will talk to you about the loan’, but I see very little traction for that at the moment in our market, it’s vastly overplayed.”

CURRENT TRENDS One of the key discussions as the market emerges from the pandemic has been the potential demise of high streets as we know them.

Rubins notes that this trend did not manifest just as a result of lockdown restrictions, and that all COVID-19 did was speed the process up, removing the crutch of customer loyalty and revealing to more people the benefits of shopping online.

Another conversation at the moment is the potential exodus away from centralised offices, with the rise of remote working and employees themselves wanting the freedom to move further away from city hubs to gain space after the restrictions of lockdown.

However, Rubins says: “The downfall [of the office] is much overplayed. It has been interesting to see how very big occupiers decided to downsize, and are www.mortgageintroducer.com

SPECIALIST FINANCE INTRODUCER

SPOTLIGHT now taking on 1,000 interns a year and can’t possibly do it all remotely. There’s also been so much [use of permitted development rights (PDR)] that really there’s basically a shortage of office space in most places where people want offices, because people have been building flats instead.”

In general, ABC is seeing a high amount of development activity at the moment, particularly when it comes to larger, executive, or family housing.

“I don’t think anyone was surprised,” he explains.

“Demand had frankly always been high, with an oversupply of town centre flats and an undersupply of family housing, executive housing, and just housing more generally.

“We’ve got quite an aggressive development product and that’s very busy at the moment.”

In terms of areas where the firm is less keen to lend, there are still a lot of question marks over student housing, and what demand for that might look like post-pandemic, while densely populated city centres are also less appealing, due to long sales periods that do not look set to decrease in the immediate future.

As for current trends within the development process itself, Rubins points to continued concerns over raw material inflation and supply.

He says: “It’s still slow coming through on supply and there’s still inflation within raw materials, but generally as a group developers and builders are pretty fleet of foot and good at thinking around things.”

MARKET PREDICTIONS From Rubins’ perspective, the specialist market has fared well during the events of the pandemic.

He says: “It’s not surprising, because the main banking market was in no hurry to be lending, and then COVID-19 gave it another great reason to say no.

So, from our point of view it was good.

“Those that were well funded and had reliable funding managed to take advantage of it and gained market share from those that didn’t.

“The bridging market has the advantage in that it is very quick to react. You’ve got short lines of communication all the way through the company, so the second you see either a big disadvantage or advantage, we can deal with it immediately.”

One arguably less positive result of the specialist market going from strength to strength has been an influx of new entrants.

“There’s been an enormous amount of new entrants and I struggle to see how that’s going to work,” Rubins says. “I foresee a lot of disappointed funders because they never got the money out the door.”

One particular issue he highlights is a focus on technology as a selling point in and of itself – offering eye-catching apps and chatbots – when in reality it is more likely to be due diligence or processes later down the line that slow things down, which these solutions largely do not solve. www.mortgageintroducer.com

However, one upside to this injection of competition is that it encourages well established businesses to innovate, while benefitting from the added strengths stemming from longevity and market experience.

In terms of changes to activity, Rubins predicts that in addition to demand for more space in residential properties, combined live-work spaces should become a greater reality, where so far this area has been slow to gain traction in the UK. He says: “It could be interesting, because there are certainly going to be numbers of people who are going to be going into the office less, or will work properly from home, and have realised that sitting at your dining room table isn’t ideal.”

In commercial finance, the main trend is that tenants are becoming increasingly complex, and the pandemic has forced lenders to see even large, established commercial names as potentially unstable.

Rubins says: “There’s almost no such thing as an undoubted tenant any more. As a lender or a credit team you have to look at things – while we always looked at them – perhaps in more detail than we did before.”

As for geographical trends, Rubins is unsure about the truth behind rumours of a mass departure from London now that people want more space and are less likely to work from an office.

“London is still London, and ever will be,” he explains.

“It will dip and flow, but it will always have things people want access to. There will also always be a foreign market that finds it attractive. Equally, as everything comes back and opens up, all the advantages of living in a London flat will again be a thing.”

Although ABC’s books are relatively evenly spread across the country, with a particular push into the Home Counties for executive housing, Rubins warns that the demise of the South East should not be overplayed.

FUTURE FOR ABC The near future for Alternative Bridging will largely be a case of carrying on and keeping steady.

Rubins explains: “Our view is, steady as it goes, no change here. We are happy with what we are doing.”

The firm expects to continue to push its development funding, as well as promoting its Alternative Overdraft product, which Rubins reports is proving highly popular.

In addition, ABC is seeing a considerable increase on its regulated side.

Rubins says that being able to keep an even-keeled approach comes down to getting the right people on board.

“Everybody, certainly in the middle and higher roles, has a background in property,” he explains.

“Our hires are property driven people, with property experience and background.”

Finally, he adds: “Our way of working is about the property and the borrower – the money is always there and we don’t have to worry about it. We focus on the borrower, which is key.” M I JUNE 2021 MORTGAGE INTRODUCER

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HOUSEBUILDING

Lending digitalisation: A giant leap Roxana MohammadianMolina chief strategy officer, Blend Network

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he UK needs more homes, and the government is running behind its 300,000 a year target.

FinTech platforms such as Blend Network, which are disrupting the lending market, represent a leapfrog moment for UK housebuilding.

According to a study by Savills and Shelter, more than 300,000 planned new homes may remain on the drawing board over the next five years – the equivalent to the government’s annual target. Lockdown-induced delays in construction and the subsequent recession will cut the number being built by 85,000 this year alone.

Worryingly, construction of the cheapest social housing will suffer most.

The research shows that social housing could fall to a tragic low of 4,300 units annually – the smallest number since the Second World War. But Prime Minister Boris Johnson and his promise to ‘level-up’ the UK’s economic growth might find an unlikely ally when it comes to tackling the housing crisis in the PropTech and FinTech industries.

The nature of the asset class, which comprises large heterogeneous assets traded in a largely private market, is perhaps a good reason for this.

Property may be too important a part of a private portfolio to take any risks with the process whereby it is traded, lent against, held or valued.

It may also be the case that there is an agency problem; the professional advisers that dominate the transaction process clearly have an interest in protecting their income sources, so chartered surveyors, brokers and lawyers, among others, might all be expected to resist tech-driven innovations designed to ‘disrupt’ their work.

However, this is not the case in the lending market, where the larger traditional lenders are no longer active in many specialist parts of the market, and are thus happy to work alongside specialist finance providers.

Consequently, we are witnessing a silent revolution consisting of the digitalisation of the lending market and a discernible new explosive wave of technology innovation in the real estate lending industry.

Platforms such as Blend Network enable a wide range of investors – private retail investors, high net worth

(HNW) individuals, family offices and institutional investors – to invest in property deals that are pre-vetted and pre-approved by expert property lending teams.

TWO BIRDS, ONE STONE

Tech-powered property lending platforms are solving two problems.

On the one hand, they are helping investors deploy funds and access yield through impact investing.

On the other hand, they are helping small to medium enterprise (SME) property developers and small construction companies access the funding they so urgently need to build more low-cost affordable homes.

For example, Blend Network has helped fund dozens of low-cost housing projects across the UK regions over the past four years.

These regulated, tech-powered nonbank lenders are also able to fund loans quickly, efficiently and economically.

In summary, the digitalisation of the property lending market is a leapfrog moment for UK housebuilding.

It allows investors to participate in and be part of the solution to the housing crisis, making a great return on their investment while also helping to build much-needed homes. M I

TECH-POWERED LENDING

At a time when large-scale public borrowing will see an unprecedented deterioration in public finances, there will be an increased pressure on the government to consider new and innovative sources of funding, especially tech-powered property lending, to tackle the housing shortage.

Regulated alternative lenders can and must be part of the solution to help deliver Johnson’s vision and build the homes the country needs by helping channel funds from private investors.

Let’s face it, real estate – and particularly real estate lending – are not known as industries which readily embrace change.

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The digitalization of the property lending market is a leapfrog moment for UK housebuilding

www.mortgageintroducer.com

SPECIALIST FINANCE INTRODUCER

FIBA

Back to meetings – how will this work out?

virtual conferences. We are all currently really busy, and my own activity at FIBA is being fuelled by a further increase in our membership, up another 15% in Q1 2021, on top of the 100% increase in 2020.

normal pattern of working, for at least the rest of the year.

My own experience highlights the disparity between dealing with an office full of people and an individual still at home. Many lenders tell me that maybe around 50% or more of brokers are still not seeing their business development managers (BDMs) either, whilst others have been in the office since the very start of the easing of lockdown restrictions.

Whist we do keep control of our lender partners, the increasing number and diversity of our members means we have seen a number of new lender and professional partners joining FIBA. These are becoming more regular. In fact, we are currently working with seven new lenders, all of which have a special place within our partnership programme, which our members will benefit from over the coming months.

Has it been difficult forming a virtual relationship with a new introduction?

I would certainly say that is has not been, and the statistics on our new membership nunbers support that.

However, the recent face-to-face meetings – conducted of course within the current guidelines – have been with familiar faces known for many years.

Does this say that we are comfortable getting out and about again with those that we know, and that the newer contacts will follow on once we have established ourselves back into our old ways? It is certainly something to consider as we transition through the rest of the year.

Adam Tyler executive chairman, FIBA

W

hilst we are still unsure of our movements for the summer this year, the industry continues to move at a pace that defies what normal logic would have dictated 12 months ago.

There is still of course the stamp duty cliff-edge, although this appears to be acting more like a gentle slope currently, which could push us off course, but the recent activity I have witnessed first-hand indicates something very different.

We are also entering into a very interesting transitional phase, a time when some are still fully home working, whilst others are full-time in an office, and a growing number are in between.

The latter could be because they are unsure what to do, both from a confidence perspective or purely due to concerns over their health.

There are a number of reasons why this could be a tricky period, following the herd and getting back out there when you are not ready is not recommended, but peer pressure and the modern expression of ‘FOMO’ (fear of missing out) could also be a factor.

This also presents another issue, simply because we have been able in recent times to respond in minutes to an email, but if you are now out – with a customer, in the car, or at a meeting – there is the return of the normal delay in getting back to someone.

If you are out, is someone else at their desk and engaging quicker? This could apply whether you are a lender or a broker. We will need to manage that difference in availability, and subsequently the move back to a more www.mortgageintroducer.com

“We are now entering a transitional phase, which means striking a balance between staying safe and being competitive, all within the boundaries of government guidelines” The other factor to consider is, of course, transportation – how are we travelling, using private or public transport. We can all see in our local towns that traffic is certainly back to normal, but what about our major centres? Reports state that this is back to around 80% from a driving perspective, but my own experience of business districts shows a different picture, while occupation levels and the number of people simply being around is far less than this figure.

All this is there to fuel the debate between the virtual and physical, and highlights that we are now entering a transitional phase. This will mean striking a balance between staying safe and being competitive, all of course within the boundaries of government guidelines. For me personally, I am getting back to meeting people face-toface in a gentle way, whilst combining the rigorous demands of Teams and Zoom meetings with webinars and

LENDER PARTNERS

MEMBER BENEFITS

On a final note, and as a precursor to next month, we have always sought to increase our benefits offered to our members, and there are four new member-specific benefits in our pipeline due to be released.

The first will provide the opportunity to introduce customers to a provider which can offer protection for a commercial loan. This is life and critical illness cover on a business basis, suitable for the loans that brokers provide for your customers.

In working with brokers over many years who are involved in commercial lending, I have always sought to provide access to all types of insurance products, and this is the first step to a wider range of opportunities within the commercial lending market. M I JUNE 2021 MORTGAGE INTRODUCER

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THE LAST WORD

MATTHEW CUMBER

Moving on up Mortgage Introducer speaks with Matthew Cumber, managing director of Countrywide Surveying Services How has COVID-19 impacted Countrywide

This is an area which will remain an important focal point for us.

Every business has faced its own set of unique challenges, and surveyors have also had to adapt accordingly. When they were able to start safely undertaking physical inspections again, we returned to a backlog of more than 17,000 instructions, and working through these represented a mammoth task.

Throughout this period, in addition to servicing pent-up demand as best we could, we also had to Matthew Cumber ensure we supported the health and wellbeing of our people. As such, our surveyors always had a choice over whether to proceed with an inspection or not, and we actively supported their wellbeing through our own ‘Be Well’ campaign.

We had to constantly evaluate procedures, monitor government guidelines and share intel across the wider Countrywide group, as well as with clients and lending partners, to ensure we got the safety and productivity balance right both out in the field and internally.

Thankfully, as a business, we successfully navigated these tricky times and have come out stronger as a result.

The industry has experienced higher than expected levels of early retirement, which is having a sustained impact on capacity. When you also throw outstanding holiday entitlements which have not been taken due to lockdown restrictions, lingering logistical problems around staggered returns to the office, and split teams with some working from home and some in the office into the mix, then it’s clear that the repercussions are not going away any time soon.

These factors will put surveying businesses under increased pressure in 2021, really highlighting how important it is to remain transparent about the challenges we will continue to face, and how forging closer, more transparent relationships will prove crucial in addressing postpandemic concerns moving forward.

What are you doing to support colleagues with regards to mental health and wellbeing?

Surveying Services?

How is the business seeking to bring new blood into the industry?

We are fortunate enough to have a robust, highly effective recruitment and training programme which has been honed over many years.

Our training academy has delivered 200-plus surveyors into the industry over the past six years, and 2020 was no different, with 20 qualifying over the course of the year and another 12 going through who will qualify as AssocRICS in 2021.

Our latest trainee intake is already going through their training, and looking forward we have a commitment from the group and board to invest further in the recruitment process.

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JUNE 2021

The national lockdown, then local lockdowns and people needing to self-isolate after holidays, resulted in many localised challenges. To help combat mental health issues and improve the wellbeing of our people, we introduced a Mental Health First Aid course for all our managers.

The aim of this is to enable them to better understand and support their teams when working from home and implement a successful phased back to work programme.

We’ve always tried to meet these challenges as a collective, through open and honest conversations. This is an ongoing process, and we are always evaluating ways to improve and better support our people, as wellbeing and mental health are extremely complex and emotive areas.

Do you see any light at the end of the tunnel in finding a solution to the cladding issue?

This is a multifaceted issue, and while I would love to give a resounding yes to this question, I believe it will remain an ongoing concern for quite some time yet. A recent webinar poll found that only 1% of industry professionals have the utmost faith in the government to resolve the cladding issue within the next two years.

Such a result speaks volumes, and a long-term solution requires central coordinated support from the governments on both sides of the border. The question over whether there is the potential for a coordinated procurement of labour and materials to remediate buildings lingers. Sadly there doesn’t appear to be any quick fixes in the offing at the moment, but that’s not to say I don’t remain hopeful. This is an area which needs action and clarity, as far too many people continue to remain affected.

How optimistic are you regarding Liverpool’s title challenge next season?

Definitely title contenders, especially with our centre backs returning from their long injury lay-offs. The final day achievement of Champions League qualification has given the club a significant boost – so I am cautiously optimistic! M I www.mortgageintroducer.com

WE’RE BACK! Leeds | The Armouries 8th July 2021

Mortgage Business Expo has grown to become the biggest and most essential meeting place for the financial intermediary market. MBE is a dedicated event for mortgage practitioners and professionals providing opportunities, forecasts and trends for the UK mortgage and specialist lending markets.

Why do visitors attend MBE: • • • • • • •

78% of visitors establish new business contacts at MBE 79% want to expand upon the services that they offer their clients 56% want to talk to their existing suppliers 87% of attendees surveyed are looking for new avenues for their business 67% are looking to network 45% seek new partners for hard to place cases 42% state that MBE is the only event of its type they visit

“

‘The key benefit to MBE is that you see more mortgage brokers here than you would do at any other exhibition in the UK’

‘…great opportunity to speak to lenders and make some new contacts’ Neil Bates, Mortgage Hunters Financial Services

Charlie Palmer, IFAC

hello@mortgagebusinessexpo.com | +44 (0)7785 755087 mortgagebusinessexpo.com

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