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A time to keep positive
t’s been an interesting month in the mortgage space. Lenders have found themselves having to find ways to help borrowers access mortgage products despite the ongoing coronavirus crisis. With many lenders having shut their doors when the lockdown began, we are now seeing a number reemerge with products aimed at filling the void. Lenders are adapting and innovating and the market, albeit at a lesser pace, is still moving. As we all adapt to this strange new normal so too are lenders. The moves we’ve seen by lenders also indicates that recovery should be quicker than had been feared when things return to normal. It’s been said many times before, but it remains worth remembering, that this is not a liquidity crisis. Lenders are ready to do business. A story emerged last week that some 373,000 property sales are on hold in the UK owing to the coronavirus lockdown. The other way of looking at that is there are 373,000 sales ready to complete when this ends. Some deals
will have expired, some buyers may be looking at other properties. These are opportunities for both lenders and brokers alike. At the moment we should all be focussing on the positives and preparing our respective businesses to be ready to capitalise on the opportunities that arise. Yes, it’s easy to say and I know many readers will be facing significant issues at this time. However, you can only aﬀect the things you can change. Lockdown isn’t one of those things (except by staying at home) but the readiness of your business is. Finally I’d like to say a huge thank you to all our contributors and sponsors who remain loyal to the magazine and the market. The same goes to you, our readers, who have rapidly shifted to having their issues sent to their homes so they can stay up to date with the latest industry news. By the next issue of Mortgage Introducer things will hopefully be clearer. Until then keep working together, keep supporting borrowers and stay safe. M I
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Contents 7 8 9 10 11 12 17 18 21 28 32 34 35 38
AMI Review IMLA Review Lending Review Self Build Review Broking Review First-time buyers Review High Net Worth Review Buy-to-let Review Protection Review General Insurance Review Technology Review Conveyancing Review Equity Release Review Spotlight Stuart Wilson answers your equity release questions 40 Surveying Review 42 The Outlaw The COVID-19 report card 46 Cover: Northern Light Mortgage Introducer catches up with John Truswell who, in September 2019, returned to the city of Newcastle to head up Newcastle Building Society’s intermediary lending team
COVER: NORTHERN LIGHT
50 Loan Introducer The latest from the second charge market 57 Specialist Finance Introducer Development finance, bridging and FIBA 62 From the frontline Supporting the NHS
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Business as usual at the FCA Robert Sinclair chief executive oﬃcer, AMI
n its proposed fees budget for 2020/21, the Financial Conduct Authority (FCA) has considered the eﬀect of any fee increases on small firms and therefore moved to freeze minimum fees and defer the payment deadline for small and medium-sized firms. However, it has not amended its total budget requirements in view of the pandemic, and is expecting large firms to pick up the excess and pay promptly within the usual timescales. Mortgage and protection firms, and those reliant on estate agency, are in a diﬀerent situation to many of the firms that the FCA regulates. Whilst investment advisers will see their incomes fall for the next three to six months, they will still continue. In contrast, the lockdown has seen most property completions put on hold, while valuers are not able to go out to undertake valuations, removal companies are furloughed and house viewings have virtually ceased. The pipeline for mortgage intermediaries has significantly reduced. NORMAL LEVELS
This will take some time to rebuild once lockdown eases. The impact on firms’ incomes has been felt almost immediately, and will continue to be for many months, with an expectation that firms will not be able to get back to normal levels until Q1 2021. Where networks are regarded as large firms by the FCA, rather than a grouping of small firms, the decision only to freeze the minimum fees will mean that appointed representative (AR) firms sitting within networks will not benefit. Their costs will increase in line with changes for large firms. Whilst intermediary firms have been stripping back costs and furloughing www.mortgageintroducer.com
staﬀ, there is no indication that the FCA is looking to reduce its costs. Firms are wondering whether they will be able to pay staﬀ and fees and survive, meanwhile the FCA has launched its advertising for next year’s apprenticeship programme. The FCA transformation plan has been dropped into the proposals with little detail and no cost-benefit analysis. At a £30m cost to fee-payers over the next three years, we might have expected a clearer forecast of savings and eﬃciencies. In broad terms, fees for smaller firms will be the same as last year for the FCA, Financial Ombudsman Service (FOS) and Money Advice Service (MAS), with a slight fall for the Financial Services Compensation
Scheme (FSCS). For larger firms, FCA costs will rise by about 5% due to increased turnover, FOS costs might rise by around 30%, while MAS and FSCS will be stable. Overall, this is a best-estimate increase of around 8% in their total invoice. THINNED DOWN FCA
Whilst the FCA is exceptionally busy on COVID-19 related changes being implemented across the whole sector, and helping deliver the initiatives created by Treasury, this cannot be all of its staﬀ. It should be de-prioritising whole rafts of work and standing down staﬀ. Until we see what is left of UK financial services, a thinned down, cheaper FCA is imperative. M I
Putting remortgage to the sword
s part of the Mortgages Market Study, the FCA said that more needed to be done to help ‘less active’ consumers who remain on their mortgage reversion rate at the end of any initial term. This was also highlighted in the Citizens Advice super-complaint to the Competition and Markets Authority (CMA). In its response, the FCA made a commitment to prioritise ensuring that markets work well and provide fair outcomes for longstanding and vulnerable consumers. The FCA has since undertaken consumer research to understand why people stay on their lender’s reversion rate when it would be financially beneficial to switch. This research found that the factors that contribute to inertia include a lack of time, a fear of the application process and relative contentment with their current lender or deal. Research has suggested that consumers could become better engaged if given the right information at the right time, and by setting out the case for switching. However, mortgage switching is common, and any policy changes aimed at encouraging it would need to be evaluated to ensure a net-positive impact.
The FCA’s research also suggested that an intervention providing non-switchers with an estimate from their current lender of the amount they could save if they switched internally would be the most eﬀective solution. A combination of emails, letters and phone calls was found to be most likely to be eﬀective. The research also suggested it might help if lenders were to provide an estimate of the amount of time it would take consumers to switch. The FCA is considering a number of diﬀerent remedies, upon which it intends to consult in the fourth quarter of 2020. The policy statement and any subsequent rule change is envisaged to be published in early 2021. We at AMI are exceptionally concerned with the concept of regulation which encourages product transfer comparisons as the preferred switching solution. Advice and remortgage has to be an option for all, not lenders simply keeping their own. This is a fight all intermediaries will have to engage in. The CMA cannot see this solution as fair in what should be a competitive market driving better consumer solutions.
Finding optimism in times of crisis Kate Davies executive director, Intermediary Mortgage Lenders Association (IMLA)
he mortgage market has seen a monumental shake-up to normal activity in recent weeks as the impact of the coronavirus crisis has unfolded. No one in the sector has had to contend with anything close to the scale of disruption caused by the virus in their lifetime. Every person and every business in this and all other industries has had to adapt to a new state of ‘normal’, but it has actually been quite amazing to see how fast and positive the response to the crisis has been. Take the working from home phenomenon as an example. Pre-crisis, how many businesses in the market could truly say that they were set up and ready for remote working? Not that many. But now the tide seems to be changing.
The majority of lenders have not been forced to shut up shop for new business during the crisis; remortgage and product transfer activity has continued, for example. However, we have certainly been seeing a shift in their priorities. Looking after the needs of existing customers has, quite rightly, taken precedence over everything else during the crisis. It should be noted that lenders’ customer service teams are people too, facing the same demands and challenges as everyone else, while experiencing huge increases in demand for their services. Many customers have requested so-called mortgage payment holidays. UK Finance recently reported that an
There has even been talk of a ‘distributed work revolution’ caused by the current upheaval, with remote working set to become the status quo for many of those companies that are embracing it during the crisis. Many lenders and intermediaries have gone to great lengths to ensure they can continue business as usual while working from home. Digital solutions have been widely adopted at speed. For example, many lenders have rapidly increased their use of automated valuation models (AVMs) and desktop valuations, as physical options have become more difficult to carry out. The benefits of this change will far outlast the crisis.
MORTGAGE INTRODUCER MAY 2020
Looking at the glass half full
average of 61,000 were being granted by lenders per day. Lenders are managing these enquiries around mortgage payment holidays with care. They are not always the best option, and it is important to ensure the benefits of applying for one are not outweighed by increased costs in the future. This is particularly relevant for customers near the end of their term. The customer service challenges faced by lenders have been made harder by the fact that many staff are falling ill themselves, have needed to self-isolate because someone close to them has contracted the virus, or are concerned about protecting a family member who is especially vulnerable. One lender suggested that up to 30% of its key staff have been unable to work at any one time during the coronavirus outbreak. LOOKING AHEAD
Mortgage rates are at record lows, and there are some good products on offer across the market for those borrowers approaching the end of their terms, although the range of products has contracted as lenders simplify and streamline what they can offer. The role mortgage brokers play is arguably more important than ever. Brokers can identify the most appropriate options for their customers, many of whom will also be looking for reassurance and support in terms of what they can afford going forward. The roles brokers and lenders play in supporting customers now will help lead the market back to stability and growth as things return to normal. The overall outlook for the market is highly uncertain, but there are signs that suggest the initial stages of the crisis may have passed. There is room, therefore, to retain a sense of optimism for the market and how it could look come autumn, when we would normally expect a rise in activity levels. Reaching that point will require a great deal of collaborative hard work, understanding, and an element of compassion across the industry. The industry has shown before that when the chips are down, it can rise to the challenge. M I www.mortgageintroducer.com
Keeping up to date is a difficult task David Lownds head of marketing and business development, Hanley Economic Building Society
he lending community continues to strike a balance between reactivity and proactivity as we battle our way through extraordinary times. One of the main challenges is getting to grips with how different types of potential and existing borrowers are being affected, and how we can better support them, both now and an uncertain short to medium-term future. The market is changing at such speed that even data collated today might be outdated in a few months, or even a matter of days. However, the data does help us to build a better picture of how different sectors, and the borrowers within them, are reacting and how markets are evolving or adapting. Let’s not kid ourselves, ‘once in a lifetime’ events are sadly becoming more frequent, and the better prepared we are for a variety of future scenarios, the greater chance we all have of emerging as unscathed as possible. With that in mind, here’s a brief round-up of data and reports over the past month which may help lending and intermediary communities better understand pre-crisis and present market conditions. HOUSEHOLD FINANCES
Household finances are at the weakest point since November 2011, according to IHS Markit’s UK Household Finance Index. The index, which measures households’ overall perceptions of financial wellbeing, dropped to 34.9, its largest monthly decline since it started in 2009. Job security perceptions also www.mortgageintroducer.com
hit a record low, whilst incomes from employment fell sharply. This data was compiled during the first week of April, offering an early indication of the severe impact of the public health emergency. REMORTGAGE
Although some mortgage applications remain on hold during the COVID-19 lockdown, a recent report from Experian suggested that existing mortgage holders could access savings of more than £5,000 by switching to a different fixed rate offer. It added that up to 44% of the UK’s 10.8 million mortgages are likely to be on the provider’s standard variable rate (SVR), with only 24% of current or previous mortgage holders remortgaging at the end of their last introductory offer. Of those that have lapsed into the provider’s SVR, 23% thought remortgaging was too complicated, while 16% had not realised that the SVR would be more expensive. Mortgage holders in Northern Ireland (52%) and the North East (51%) were said to be the most likely to be sitting on an SVR, while the East, South East and South West regions had the lowest proportion at 43%. The remortgage market will continue to be a primary source of opportunity for the intermediary market moving forward. Getting closer to clients, in terms of better understanding what might be new or adjusted financial positions, will put intermediaries in a stronger position to review their clients’ remortgage requirements, as well as driving more ancillary business in areas such as protection. THE APPETITE TO MOVE
According to research from reallymoving, 75% of those who were planning a move before the crisis still want to move as soon as possible.
A further 18% said they were still hoping to move later this year, and only 7% were now unwilling or unable. Among those who agreed a deal and were already in the process of buying and selling a property when the lockdown came into effect, 62% intend to use this time to get as far as possible with the process. Three in 10 (29%) have temporarily paused their transactions, 6% are no longer willing or able to proceed and 3% have seen their chain collapse entirely. The primary concern for buyers and sellers no longer proceeding with their move was said to be that house prices could fall (26%). Other worries included someone in the chain pulling out (17%), concerns over job security (16%) and lost confidence in the economy (16%). Only 4% of survey respondents were concerned about access to professional services. Before the onset of the crisis, the housing market was experiencing one of the strongest late winter/early Spring markets for some time; whilst it’s difficult to predict the exact impact on house prices and wider economic conditions, this pent up demand bodes well for the future housing market. PRODUCTS
On 14 April, Mortgage Brain reported that the previous week had shown a 49.1% drop in product numbers compared to the nine-week average to 16 March 2020. However, in the following week there were said to be 7,425 products available, a further drop of just 52 (0.1%). It’s inevitable that product numbers fell as all lenders reacted to restrictions around physical valuations, whilst also tackling pricing uncertainty and service commitments. The logistical challenges facing lenders are all too evident, but the slowing of this dramatic fall in product numbers is encouraging. With lenders now demonstrating some higher loan-to-value ratio (LTV) capacity, we may have reached an important juncture in terms of the structuring of product ranges and how these are being serviced. Exactly where we go from here remains to be seen, but there is cause for cautious optimism. M I MAY 2020 MORTGAGE INTRODUCER
The barrier to future growth Graeme Aitken business development manager, Harpenden Building Society
n January, The Royal Institution of Chartered Surveyors (RICS) released its Residential Market Survey. The overwhelming sentiment was one of positivity; buyer enquiries, agreed sales and new instructions were all increasing. House prices were also rising nationally, and respondents were upbeat on the outlook for sales in the coming year. However, with the impact of coronavirus unfolding throughout the spring, and the dawning likelihood that it will last into the summer and beyond, it is difficult to predict where the mortgage industry will land. THE SELF-BUILD BOOM
Nevertheless, there are encouraging signs; one of the obvious successes over the last decade has been the rise in selfbuilds. At Harpenden Building Society we have seen a continued increase in the number of self-build applications. What might not be as obvious, however, is the increasing complexity of build specifications and financing requirements. For brokers and lenders alike, these applications are not as straightforward as they once were. The danger is that future players in this market fail to evolve at the same pace as customers’ requirements. ARCHITECTURAL COMPLEXITY
We’ve been underwriting self-build mortgages for 25 years, and the biggest change has been the rapid development in construction types, and increasing complexity of construction methods. These include windows spanning the full width of a house, irregular shaped properties with equally unusual supporting structures, and swimming pools built into the basements of sevenbed homes.
MORTGAGE INTRODUCER MAY 2020
Over the last decade alone, selfbuilds have expanded from standard family homes to include structures that might be considered for the world’s leading architectural awards. As a result, lenders must be more flexible in their decision-making; this is only possible when you have deep experience to draw upon. We are willing and able to accept either non-standard or modern methods of construction, provided there is an acceptable new build warranty. Not everyone is able to match this flexible approach. FINANCING
Alongside the growth in modern construction methods is an increasing diversity in regards to financing requirements and income, including a trend towards later life lending. As this trend continues, we are seeing repayments come from multiple sources. Income from assets and pensions is commonplace, and more contractors and self-employed people are looking to build their ideal home. We are able to consider income, savings and investments from various sources (UK-based and in sterling). There is also a desire for more flexibility regarding how and when funds are released. Our policy is now to release funds on a timescale agreed with the broker and client. We know from experience that a prescriptive process simply doesn’t work, and flexibility is now not only desired but a requirement. Without it, the build comes under increasing pressure. If the solution is fluid and there is strong dialogue, then all parties can move efficiently to completion. LAND AVAILABILITY
In January, Build It magazine outlined what it believes the future holds for the self-builder. Historically, finding a viable plot of land was a major challenge. This problem remains, but as the housing crisis forces innovation, there is ever more provision of ‘serviced plots’, enabling developments with
roads, key utilities and blanket planning permission in place. The obvious example of this is Graven Hill near Bicester in Oxfordshire. Other authorities such as Plymouth, Glasgow and Teignbridge have also been providing increased opportunities for self-build projects as a way of meeting the need for housing. TECHNOLOGY
We can also expect to see more innovation, such as housing with new forms of technology built in. There is a trend for new properties to be energy efficient, making use of ground source heating, solar panel roof tiles and triple glazed windows. The government has announced plans to ban the installation of gas boilers in new homes by 2025. With energy efficiency and the environment a critical issue for governments around the world, property construction techniques will continue to develop at a rapid pace. If climate targets are to be met, energy consumption must reduce. Build It also expects the UK to start catching up with Europe in reducing toxins in materials, despite Brexit and the potential for divergence in our regulatory frameworks.This is likely to be achieved through greater adoption of offsite construction methods. Technology will also be used to minimise noise transfer between rooms and storeys as people look for more peaceful and harmonious environments. CO-OPERATION IS CRUCIAL
Taking all these variables into consideration, it’s no wonder that self-builds often fail to run according to plan. More so now, as we adapt to a world no one could predict in 2019. The skill and expertise of the valuer is vital within this process. A great architect and craftsman can create the building, but without flexible financing and co-operation there can be no funds even for the foundations. If the industry works together to remove potential barriers then there is an opportunity here for everyone. M I www.mortgageintroducer.com
Zoombombing and the art of the pivot Xxxxxxxxxx Abi Greenhalgh, director, xxxxxxxxxxxxxxxx, xxxxxxxxxxxxxxxx Nest Financial Services
hese last few weeks on lockdown, to me, feel like they have lasted an eternity – but I have to be honest, I am not really complaining. There are huge benefits to be gained from not waking at silly o’clock to get the kids up for school, as well as having the privilege as a family to sit and eat an evening meal together. There is already part of me that knows I will miss the simplicity of lockdown life. What I didn’t know I would learn as part of a global pandemic is a brand new language. Who would have thought at the beginning of March we would have even known what a ‘Covidiot’ was (someone who deliberately breaks lockdown rules) or that to ‘preremember’ is to refer to life before lockdown, or for me, that I would even consider myself the queen of the pivot! Of course, I knew the word pivot. I even know that it’s a well-used term referring to those businesses that deliberately and specifically choose to change direction as a direct result of an external factor influencing their market – well, my goodness, if COVID-19 isn’t the largest external influencer on our market right now, I’m not sure what is. My choice to pivot is not a bad thing, it’s a deliberate change of direction within my business which will ensure it continues to grow well beyond the end of this pandemic. That change is, quite simply, a firmer commitment to protection. Now, to be fair, protection is already well-embedded into my business and process – but as with any good business www.mortgageintroducer.com
owner, I also recognise there are always areas to improve. This is why, if you haven’t already, you need to learn the art of the ‘pivot’: 1) Consider how you think about yourself. Are you a mortgage and protection adviser, or a protection and mortgage adviser? It’s amazing how this subtle change in language, when you repeat it to yourself hundreds of times a day, affects the opportunities you see which may otherwise have passed you by. 2) Time; we all want more, and now the world has delivered it, so use it wisely. Take that much desired opportunity to work on your business rather than in it – turn your business upside down and think about things
differently, set yourself short and longterm goals, create a vision board and dream big. 3) Work out your need-to-earn (NTE) and want-to-earn (WTE) figures, then apply this across your protection opportunities. This becomes your new target – one a day or one a week extra, whatever is achievable to you. Either way it will be more than you are doing now. 4) Don’t assume anything. You have a client bank of un-tapped potential, you just need to make contact and ask if you can help. 5) Plan your exit – don’t be that broker who wakes up and realises the world has already gone back to normal. You need to be thinking about that post-lockdown re-entry to business fabulousness now. And when you’ve done all that? You can feel free to dust off your best ‘upperwear’ and treat yourself to a ‘quarantini’or two whilst laughing about how the kids ‘zoombombed’ your client meeting. M I
Think about your post-lockdown re-entry to business
MAY 2020 MORTGAGE INTRODUCER
Embracing the people-first approach Anita Arch head of mortgage sales, Saffron Building Society
ith two-thirds of private renters struggling to save enough money for a deposit, there are question marks over whether the mortgage industry is doing enough to support potential property buyers. Ongoing uncertainties surrounding the COVID-19 pandemic’s long-term impact on people’s health and finances, as well as on business, are combining to make the current climate particularly daunting, with many plans to purchase property currently in limbo. However, it’s important to remember that this situation won’t last forever, difficult though it may be to envisage at this point. When things begin to get back to ‘business as usual’, it is vital that our industry is ready to step in and support as many people as possible to pick up their property purchasing plans.
on an individual, case-by-case basis, which gives us more flexibility to serve those people who might not get a mortgage elsewhere. We also accept gifted deposits on all of our mortgage products, where applicants’ loved ones can assist them by giving them some or all of the money they need. Aspiring homeowners now need to raise an average of £32,000 for their deposits, which is an impossible amount for many. Gifted deposits are particularly helpful for those who are perfectly able to afford the monthly repayments, which may in fact constitute a saving on what they are paying in private rent, but simply cannot save enough for the initial deposit. We have always believed in treating our customers as individuals – not simply numbers – and have worked hard over the past 12 months to introduce support for areas of vulnerability, improve accessibility and
enhance the level of service we offer our customers. For example, all of our staff have been given mental health wellbeing training, allowing them to identify vulnerable customers. Many have also been trained as dementia friends, able to support customers, and their families, affected by dementia. We also use a range of third-party deals as a means of strengthening and retaining lasting relationships with our members, something that is especially crucial in these uncertain times. These include support with estate planning, bereavement, retirement, and annual events that give members the opportunity to meet and get to know their Saffron team. Working continuously to improve customer experience allows us to ensure we put our people first, which has always been one of Saffron Building Society’s fundamental values. Crucially, this people-centric approach in turn helps us to support the intermediaries we work with. If we’re serious about keeping our industry healthy and robust during these uncertain times – and beyond – then inclusivity and support should not just be buzzwords. Instead, they should be principles that we hold at our very core. M I
So, what can the industry do to attract a heathy amount of new business, once the current situation levels out? At Saffron Building Society, we believe that opening up the property market to more potential first-time buyers is key, both for lenders and for the intermediaries who work with them. One of the ways we are working to do this at Saffron is by making our products accessible for as many people as possible, especially those who may not otherwise meet mortgage affordability criteria. Our underwriting process helps here. Because it is manual, rather than automated, it allows us to make decisions on mortgage applications
MORTGAGE INTRODUCER MAY 2020
Opening up the property market to more potential first-time buyers is key
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At our best when we work together Stuart Miller customer director, Newcastle Building Society
imes are undoubtedly tough at the moment in so many ways. The current crisis has created new uncertainties about the health of our loved ones, the health of the economy and the health of our businesses. In that context, how lenders and intermediaries work together in the coming months will be important for everyone’s future. Meanwhile, the government has stepped up to provide for huge swathes of individuals and businesses across the UK at this time of need. We are definitely all in this together. CUSHIONING THE BLOW
In the UK, we are in the fortunate position of having our own central bank and a Treasury which is unfettered in its ability to do what is necessary to cushion the blow already weighing on our economy due to COVID-19. How others, particularly in the private sector, continiue to react to the current crisis will be important. Collaboration, consideration and patience will be something we all need as we adjust to new ways of working and delivering the lending that people will so dearly need. In our own market, there has been an inevitable period of turbulence and adjustment, yet thankfully at the time of writing, there appear to be some early green shoots emerging. Everyone needs time to understand the implications of lockdown, and brokers particularly understand this; a housing market which is unable to deploy valuers to properties cannot work optimally.
MORTGAGE INTRODUCER MAY 2020
The availability of wholesale funding lines for some was inevitably shaken, but I sense they have settled. All lenders are busy stepping up to the plate and offering mortgage payment holidays where needed, but measures such as these present many challenges operationally, now and for the future. Everyone will be working hard to understand how we might underwrite and fund applications containing them in the future. HIGHER LTVS
I write this in the first few days of May, and already lenders are tentatively reintroducing higher loan-to-value ratios (LTVs). This is partly the result of detailed and sensitive conversations between distributors and providers to find a way through the changes the outbreak has caused across the mortgage sector. There are far fewer options available today to borrowers, who were already underserved at the start of the year, even when we were all hailing the Boris bounce in the housing market. Lenders and distributors will have to work hard together to fix this. We should remind ourselves that this state of affairs is not permanent, but that it may change the way we live and work totally and irretrievably, and influence who we are and what we value for generations. Nevertheless, it will not change the fundamental fact that people will want to own their own home; as an industry, we must do all we can to try and make this possible. CHALLENGING TIMES
The mortgage market is unbelievably good at handling disaster and adapting to new ways of being. It has in recent history taken on countless regulatory changes and navigated incredibly challenging times.
We have a precedent for managing crisis. In 2007, the global financial crash took the floor out of our market, but this time feels very different for many reasons. Then, for example, funding was unobtainable, but that is just not the case today. UNDERCAPITALISATION
During the financial crisis, there was a fundamental and structural undercapitalisation in the sector. The opposite is true today. What is challenging us all now is the unknown – when will lockdown start to be relaxed? When will valuers be allowed back into homes? Will people be prepared to move home when we’re all allowed to go where we like when we feel like it? Like you, I could only hazard a guess at the answers to these questions. In the coming weeks we will glean a greater sense of certainty about how our new arrangements in the workplace might look. What I do know is that our customers, the people who take mortgages with us and who save with us, are hardworking people, often with children and elderly parents. They’re young couples who have saved hard with a huge determination to buy their first home. REPAYMENT LEEWAY
They’re also people who have saved and borrowed with us for decades, saved with us as children, bought their first home with us and now need leeway on repayments because their income has fallen through no fault of their own. They’re local businesses forced to shut, but nevertheless completely committed to their communities. We all need to keep these people and businesses in mind, and work hard to find ways to continue delivering our fundamental purpose. It’s easy for me to say that our members matter, but they do. Now more than ever. Brokers matter to us too – you’re our lifeblood when it comes to helping the customers who become our members. Working together has never been more important. M I www.mortgageintroducer.com
HIGH NET WORTH
A day on our ‘virtual’ intermediaries’ desk Peter Izard business development manager, Investec Private Bank
ur day begins at 8am, after most of the team have started their morning with exercise and a hearty breakfast to get them in the right frame of mind for the day ahead. Although we’re working from home, we have an important role to play in providing lending options for current and prospective clients at this challenging time. Fortunately, we were already well-equipped with digital tools for flexible working, and
the team is able to work efficiently and communicate with brokers and clients via video conference calls. The current market is volatile, so we monitor government updates and discuss changes which may impact our clients, colleagues or the broker community, on a daily basis. We’re also taking the time to join webinars about the economy, housing market and wider outlook to make sure we’re as informed as possible and can share our knowledge. We stay in touch with our Investec colleagues on Microsoft Teams, and the friendly banter keeps morale high. We’re trying to stay positive and look ahead so we’ll be prepared in the months to come. Until then, business continues during these extraordinary times. M I
Quality advice will prove key Ying Tan founder and chief executive, Dynamo
espite enduring some tough weeks, it was good to see the government acknowledge some of the issues surrounding the private rented sector in a recently published guide aimed at helping landlords and tenants better understand the implications of the Coronavirus Act 2020. The act will ensure that most landlords will not be able to start possession proceedings unless they have provided tenants with three months’ notice or more until 30 September 2020. The guidance “strongly advises” landlords not to commence new notices seeking possession during this time without “very good reason to do so.” It also details that the purpose of the act is to “support and encourage landlords to take a common-sense approach to tackling housing issues during the coronavirus outbreak.” The 21-page document answers key questions regarding subject matters such as rent arrears and mortgage repayments. It also outlines the protection for tenants under the new act, which came into force on 26 March, and provides advice on health and safety obligations during the crisis. This document is home to some important information and is something your buy-to-let (BTL) clients should be fully aware of. THE BTL PRODUCT ARENA
Any additional sources of information and guidance are helpful during these uncertain times, and this fact also highlights the importance of the advice process in some far from ‘normal’ market conditions. This is particularly illustrated in data from the Moneyfacts UK Mortgage Trends Treasury Report, which showed that since the beginning of www.mortgageintroducer.com
March to 14 April 2020 there has been an overall fall of 1,304 BTL products in the market. In addition, the product choice for borrowers at 80% loan-to-value (LTV) was suggested to have fallen by 122 on 2-year fixed deals and 134 on 5-year fixed deals. Along with the drop in product numbers, the research outlined a rise in interest rates on existing products since the beginning of March 2020. For example, the average interest rate on a 2-year fixed BTL deal at a 60% LTV has increased by 0.35%. A 5-year fixed deal at the same LTV has also increased by 0.31% in the past month. On a more positive note, while average BTL mortgage rates have understandably risen and volumes fallen over the last month, the report outlined that there are still some competitive deals available in the BTL charts. How readily available and accessible such products are inevitably depends upon the financial circumstances of individual borrowers, as well as the transaction type and shifts within the market. Again, this points to the expertise, experience and relationships incorporated within a good, professional advice process. The value attached to this advice process should not be underestimated at any time, but is increasingly heightened during a crisis such as this. All businesses are having to cope with these adverse conditions as best we can and overcome some drastic short-term issues. Looking forward where possible, establishing strategic partnerships and working closer with lenders can help this transition. Here at Dynamo, we recently became the first mortgage club to have exclusive access to online broker Habito’s range of buy-to-let mortgages. This strategic partnership was based around many synergies, including being innovators and aiming to provide a better customer journey. This is only one example of a variety of partnerships and alliances forming
throughout both the mainstream and specialist mortgage markets. I expect more discussions to take place and agreements reached which will help lenders, mortgage clubs, networks, service providers and intermediary firms to strengthen their offerings now, and in the future. Technology will also continue to be a major driving force behind the evolution of the wider mortgage market and the forming of such relationships. It is also allowing us to innovate, engage and be more informed in the present. TECH SUPPORT
Online portfolio management platform Lendlord is one of many tech-based service providers to have introduced coronavirus-related initiatives. Many of these include updates around payment holiday policies, changes to lending criteria and product withdrawals across many sectors, including buy-to-let. It’s vital for intermediaries, landlords and tenants to have access to the most accurate, relevant, and up-to-date information possible. This ensures that intermediaries can better support a range of client needs, landlords can have greater control over their portfolios and – as highlighted in the aforementioned government guide – both they and their tenants can fully grasp their new rights and entitlements. As has been a constant theme throughout this piece, the quality of information and advice on offer will prove key in meeting ever-shifting client demands. Lenders and policymakers will continue to have a huge role to play in ensuring that the importance of the private rented sector is recognised and supported where possible. If there was ever a time for a cohesive, well-structured approach then this is it. We are operating in the strangest of periods, but we all have a vital role to play in helping to battle through this adversity and ensuring that a variety of borrowing needs are met, and serviced, where possible. M I MAY 2020 MORTGAGE INTRODUCER
Don’t discount the statistics Bob Young chief executive officer, Fleet Mortgages
here is clearly a great appetite for statistics and data analysis within, and around, the UK housing and mortgage market, simply because of its importance to the UK economy and plc as a whole. That importance has, however, often led to such a glut of data, with so many different methodologies, that it has been difficult to sort the wheat from the chaff when it comes to the true picture of what is happening in the market. There is such a high number of research pieces released during any given month – in normal times, at least – which provide different and often contradictory results, that it is difficult to work out what is actually the truth. BIG DATA
Given the current situation around COVID-19 and what it means for the housing market, you might think that data is more important than ever. However, recent statistical analysis has tended come from a preCOVID-19 market, making it appear like some sort of anomaly given today’s vastly different environment. That’s not to say that we should discount this data. After all, if we’re talking about the strength of transaction levels or house price growth back in February, this can’t be viewed as ‘false data’, it just perhaps reveals how quickly things can change. But it also might point to where the future could lie once lockdown is relaxed and we can begin to move the market forward, particularly when it comes to the re-introduction of physical valuations, which should provide a significant boost. January and February 2020 might already seem like a long time ago, but I’m positive that the market can get
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back to a similar position in a relatively quick space of time; it just depends at what point in the future that journey can begin. Some commentators have called for indices and datasets to be suspended during the current crisis. I can see the merits in this, but the demand to know exactly how COVID-19 has impacted the housing and mortgage markets will be incredibly high. Who could be expected to miss out on that PR opportunity? LIMITATIONS
The argument for pausing indices and datasets during the crisis is that, for one, the low level of activity renders analysis statistically unviable. We can’t compare apples with apples, because there’s not enough apples available at the moment to make such a comparison. There are also those who say that the publication of such data may only result in an already spooked marketplace becoming even more worried, and that this ultimately leads to an ever-decreasing circle approach. In other words, that we would be somehow complicit in making an already bad situation worse.
Data analysis will help the market comeback
There are some, I’m sure, who feel very strongly about this. My own understanding, at least according to UK Finance’s calendar of upcoming data releases, is that its Mortgages Trends data and Household Finance Review have not been scheduled for release over the coming months. This may well be a decision based on the above factors, perhaps most obviously around how confident, or otherwise, the trade body can be in the data it’s getting. Indeed, the entire lending community spent a good deal of time during March and April focused on one thing alone: helping borrowers secure mortgage payment holidays. Can we really say this was a normal period of day-to-day lending? Would the figures for activity during that period lend themselves to any positivity about what might be happening now? I doubt it. I can therefore understand the arguments on both sides; this is such a unique situation – or so we hope – that it perhaps doesn’t bear comparison with the previous quarter, or this time last year, for example. And yet, the reality of the situation is that the data we’ll see covering this time will be ‘real’, because this is the market right now, even if it looks completely different to anything we’ve seen for over a decade. What we might have to do is look at this period in isolation, or in the context of a post-lockdown environment. I’m not one for making predictions, however I think we must all expect the drop to be severe but the bounce to be quick and significant. There is of course plenty that can happen between now and then, but it would be very surprising not to see a positive and sharp turn-around in fortunes when the green light is given. We’re certainly planning for this, and I’m sure advisers are doing similarly. The data will be what the data will be; the most important point is to survive this period and be ready to hit the ground running as soon as we are allowed to. M I www.mortgageintroducer.com
Working through the new abnormal Jeff Knight director of marketing, Foundation Home Loans
ere at Foundation Home Loans, we recently teamed up with Mortgage Introducer on a webinar focused on working through the new abnormal. The aim was to tackle questions around how lenders, brokers and borrowers are coping. Hundreds of brokers tuned in, which demonstrated their thirst for information and how important it is for lenders to engage and be honest and transparent in these challenging times. For the purpose of this article, I thought I would highlight some of the questions posed by our audience, and major talking points which emerged during the discussion. Why have some lenders had to withdraw from new lending? Reasons will differ between lenders, but from our perspective the decision was driven by three key factors: 1) Lack of internal surveys during lockdown. Our current criteria and funding requirements mean we require internal surveys, so had to quickly review our short-term lending position. 2) The introduction of mortgage payment holidays. There was limited consultation ahead of this, especially with non-bank lenders. We got around six hours’ notice. That quickly raised serious concerns when it came to operational pressure in terms of dealing with cashflow and the volume of enquiries. That’s not to say the initiative shouldn’t be applauded, but from a lending perspective it was a tough initial logistical challenge. 3) Pricing uncertainty. We are a wholesale funded lender, meaning our www.mortgageintroducer.com
pricing reflects what we can achieve in the securitisation market; current conditions have created an uncertain pricing environment. This is setting down a little and we, like all lenders, are carefully and constantly reviewing market conditions, internal processes and funding requirements, and will react accordingly. What is the main challenge facing wholesale funded lenders and how does it apply to intermediary firms? The primary focus for any lender, and any business, is around cash and cash preservation. We all need to be careful around cashflow and maintain a real understanding of how much cash we have as a business, how much is due to come in and go out, and how outgoings can be moderated. We don’t know how long this crisis will last, so the better your understanding of the financial impact on your business, the more it will be sustainable in the short, medium and long-term. Will more clients fall into the specialist sector due to the crisis? We fully expect more borrowers to fall into a grey area where many mainstream lenders will be unable to meet their needs as they fall beyond the remit of their existing policy, criteria, and underwriting capacity. The importance of manual underwriting will come to the fore here, especially considering how many personal and income scenarios will have changed. Opportunities will certainly emerge for specialist lending advisers moving forward. How will this impact on the buy-to-let market? Critically, the answer depends on how many specialist lenders make it through this crisis. In the old ‘normal’ we consistently saw a quarter-on-quarter
increase in the number of available products in the owner occupier and buy-to-let (BTL) markets. We also saw a consistent, if gradual, reduction in margins. More choice and keener pricing was mainly driven by specialist lenders; if a significant number of these cannot trade or resume lending then competition will be hit, especially across the more specialist areas of BTL. In terms of individual lending to BTL landlords, there will be an increased emphasis on cash flow resilience. Voids, and looking at how to cover them, has always been a significant topic; what this event is teaching not only lenders, but also landlords and advisers, is the importance of planning ahead for more severe scenarios. Focusing on more macro-economic factors, many people will experience constraints around their post-crisis earning capabilities, and will not be able to immediately bounce back to their previous income level, especially those not on PAYE-style employment. This may hamper some from accessing the mortgage market and result in an even greater reliance on the private rented sector. Once we get through this – which we will – we may see some conservative growth in the BTL market. What can brokers be doing to better safeguard the needs of their clients in the future? Protection will become more important. Many advisers are already having, or trying to have, these conversations with their clients, but this type of advice will rise even further as the population now fully understands just how vulnerable their incomes are to events beyond their control. The reality is that incomes are never as certain as we believe them to be, especially for the growing selfemployed community. Responsible lenders have a duty of care to take this into account, while advisers need to ensure their clients have access to the right types of products; this combination will result in a greater emphasis on protection moving forward to protect a range of financial liabilities. M I MAY 2020 MORTGAGE INTRODUCER
Riding out the turbulence Jane Simpson managing director, TBMC
he buy-to-let (BTL) mortgage market has, unsurprisingly, experienced significant turbulence since the beginning of the coronavirus lockdown, meaning the profile of lenders and products available to landlords has changed. To begin with, some lenders have withdrawn from the market. A number of these, typically non-banks, should be temporary as they wait for funding lines to become available, but there may also be long-term casualties, unable to return to BTL lending post-crisis. REDUCED PRODUCTS
The overall number of buy-to-let mortgage products has dropped markedly. Moneyfacts reported that 1,304 products had been taken off during March, with changes continuing throughout April. It was reported that 5-year fixed rates took the biggest hit, followed by 2-year fixed rates. Some lenders have also responded by reducing their maximum loan-to-values (LTVs), resulting in a significant dent in the 80% LTV market, and the removal of 85% options. This may cause challenges for buy-to-let clients with more highly leveraged properties when they are looking to remortgage, and in turn deter those without high deposits from making purchases. We have also seen lenders modifying their lending criteria, especially in the complex buy-to-let sector, which may allow the remaining specialist lenders offering, for example, finance for houses of multiple occupancy (HMOs), limited companies and multi-unit blocks, to take a large slice of the pie. Interest rates have increased on several ranges, which will be
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disappointing to landlords, especially as the mortgage interest tax relief scheme for buy-to-let properties was finally phased out in April, creating additional costs for many rental property businesses. However, there are still competitive rates to be found.
personal name and limited company mortgages), will be appreciated. Many landlords could save themselves money by remortgaging, so it is also worth offering to review your landlord client’s whole portfolio during this period.
“Being able to answer questions about the availability of finance or other relevant issues, such as buy-to-let mortgage holidays (available for both personal name and limited company mortgages), will be appreciated”
The countrywide lockdown means visual property inspections are no longer possible. For this reason, some lenders have suspended offering new purchase finance. However, there are a growing number of providers which have switched to using desktop valuations or automated valuation models (AVMs) during this unprecedented time, to allow business to continue. The government has advised against house moves during the crisis, which has inevitably slowed the housing market and impacted on buy-to-let purchase transactions. However, it does mean that there is likely to be a pent-up demand for buyto-let finance once lockdown measures are lifted and movement in the market is resumed. This is obviously a challenging time for intermediaries in the buy-to-let sector, but also a time when landlord clients can benefit from our support. Being able to answer questions about the availability of finance or other relevant issues, such as buy-to-let mortgage holidays (available for both
There may be options available to them to release some equity, which could help to ease the pressure on their buy-to-let businesses in the current circumstances. REMORTGAGE BUSINESS
At TBMC, we are paying particular attention to remortgage business, as many of our clients have mortgages coming to the end of their initial rates during the next couple of months. There are still plenty of options to choose from and solutions to be found for most scenarios, which is where having buy-to-let expertise comes to the fore. M I
Landlord clients can benefit from our support during these turbulent times
Remembering Dean Mason Kevin Carr chief executive, Protection Review, and MD, Carr Consulting & Communications
ean Mason, mortgage and protection adviser, and more importantly one of my closest friends, recently passed away just a few days before his 52nd birthday from COVID-19. I first met Dean in 1993, when we worked at Nationwide Building Society. A decade later we also both worked at LifeSearch, before he went on to set up his own broker business. He was a very successful mortgage adviser, a go-to broker and commentator for the industry. As so many people have said since he passed, he was also one of the good guys. Always making time for people, always funny, always joking and singing – or trying to. He loved a bit of karaoke, and on his 50th birthday weekend (an ‘80s reunion at Butlins, of course) he told us
his favourite song was probably A-ha’s ‘Take on me’. As well as A-ha, Dean was a big fan of most music from the ‘70s to ‘90s including Madness, Otis Redding, Take That – even a bit of Britpop. We both loved a band called Gene, which we saw live many times, and had recently both met one of its members. Importantly, he was also an Arsenal fan. We spent many hours watching football, whether in pubs or stadiums, and celebrated some of Arsenal’s greatest triumphs together on Upper Street in Islington. I’m lucky to have so many good memories of Dean. Dozens of holidays and gigs, hundreds of nights out, parties and industry events. Usually laughing at his dress sense, dancing or attempts to park his car. We were even in a band together once or twice. Wherever we were, we would try to sneak off for a quick JD at the bar around midnight. Taken too soon, Dean was a devoted father of two boys and loving husband to his wife Sue. He will be sadly missed. M I
NEWS IN BRIEF Insurers including British Friendly, Guardian and AIG Life are trialling remote medical screening services during COVID-19, including online nurse meetings with height, weight and blood pressure checks, and blood tests via home finger-prick kits. Some insurers have suspended day-one and week-one waiting periods on new income protection policies during the crisis, while insurers including Vitality and Holloway Friendly are offering premium reductions and premium holidays for existing policyholders. HCB Group has launched a tele-triage service to identify claims related to selfisolation or COVID-19, to support the expected increase in claims on policies with short or no deferment periods. Legal & General is offering early intervention support and rehabilitation services for individual IP, to start helping people back to better health as soon as they can’t work, rather than waiting until the deferred period is over. Aegon has updated its income protection offering, including a lump sum death payment of £5,000. It has also increased its guaranteed insurability option (GIO) up to £200,000 for lump sum benefits.
Help for clients who want to cancel
he Protection Distributors Group (PDG), Association of Mortgage Intermediaries (AMI) and Income Protection Task Force (IPTF) have launched a guide to saving protection policy cancellations, as financial concerns increase in the wake of COVID-19. The guide gives advisers concrete tips to consider when speaking with clients wishing to cancel their cover, such as reminding them of the features and benefits, and the fact they may need it now more than ever. For example, policies come with a host of valuable additional built-in
services, such as mental health support, access to virtual GP appointments and medical second opinions. All of these are increasingly relevant during the current pandemic. The guide also discusses the options available to clients who can no longer afford to pay the premiums. These include amending the level of cover to reduce costs, checking if their insurer offers a payment holiday or career break option, or asking for reduced interest rates on decreasing policies linked to their mortgage. Roy McLoughlin, associate director at Cavendish Ware, co-chair of
the IPTF and PDG member, said: “The crisis has understandably seen many having to rapidly re-examine spending habits, but it is imperative that cover is not extinguished without careful consideration. “Advisers have a vital role to help clients see the incredibly valuable and relevant cover protection provides. “This guide will help advisers with this process, while reminding us that engagement with clients is exactly what our role is in these turbulent times.” The full guide is available for download from the PDG, AMI and IPTF websites. M I MAY 2020 MORTGAGE INTRODUCER
The importance of compliance now Mike Allison head of protection, Paradigm Mortgage Services
very day we receive news briefings from the government providing the latest information on coronavirus. We are informed with plenty of data that appears, at the minute, to be encouraging. Sadly, we are also reminded of the tragic loss of life that has occurred. At the time of writing (after six or so weeks) many thoughts are now turning to ‘next steps’, a roadmap out of the lockdown, and the implications for not only the physical health of the nation but also the health of the economy. One thing that is highly evident, and commendable, is the pace at which many large organisations, especially those in the mortgage and protection industries, have adapted to lockdown. They have instigated their disaster recovery plans with relative success given the sheer scale of the issues that needed to be addressed. Which leads us to a highly legitimate question: what does that mean for the future working practices of not only the firms we associate with, but the world as a whole? Now that Zoom and Teams have leapt into our everyday phraseology, how is this likely to shape how we work and interact with our customers? Of course, working remotely or from home is by no means a new phenomenon. In a recent survey published by the Office for National Statistics (ONS) in March, based on 2019, we were told that of the 32.6 million in employment, around 1.7 million reported working mainly from home, with around four million having worked from home in
MORTGAGE INTRODUCER MAY 2020
the week prior to being interviewed. Around 8.7 million reported having ever worked from home; however, this is less than 30% of the workforce. It would be safe to assume that those numbers have been surpassed in the past few weeks. There are clearly some occupations that lend themselves to working from home with ease; however, many employees do not have this luxury. PERCEPTION
This could well be down to tradition, or the perception that it is better to work together under one roof. However, now that working from home has been somewhat forced upon us, and with necessity as they say being the mother of invention, new practices have undoubtedly been formed, and are likely to stick in many cases. So, taking more of a micro view of things, might we expect the face of financial services as we know it to change? The recent changes and restrictions will drive much-needed efficiencies within businesses. If that is the case, how will it affect all of us? There is little doubt that a key feature of the past few weeks has
Remember compliance when working remotely
been the use of technology to drive what we do. This is not just in terms of our meeting habits, but in how we communicate ‘en masse’ to our customers, in the form of webinars and online briefings. We are all well aware of the mantra, as prevalent in our industry as any, that ‘people buy from people’. The reality is, I believe, that this will not change for some time. What is under discussion at the moment, though, is how people will communicate with people and gain their trust. Furthermore, what technologies will be used to make the bond between the customer and the broker more interactive; to make them feel a far greater part of the process and help advance that trust? The necessary technologies exist now, but for whatever reasons have not yet been fully integrated into the standard processes. They are coming, though, and will be here to stay, forming a major part of that client bonding utopia we all seek. It is not only sales methods that will be under the microscope and subject to these advancements. In highly regulated industries such as ours, firms will need to know that any changes made to move processes away from face-to-face contact will not expose them to higher compliance risks. How will telephone or online sales affect demands and needs and suitability documentation? I am aware in our own organisation of requests in the past few weeks to clarify a number of positions regarding remote sales and how it affects output of documentation. It is clear, for those not used to operating in such environments, that specialist compliance services such those offered at Paradigm are now high on the list of priorities to ensure adherence to the rules. In these challenging times, having the necessary compliance support and backing to ensure your changed working practices do not see you breaking the rules will be vital. Not only will they give peace of mind to you, but to your customers too. Make sure you have the required compliance support to get to that point. M I www.mortgageintroducer.com
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Clients should stay protected Andy Philo director of strategic partnerships, Vitality
he COVID-19 pandemic has put health, wellness and the value of protection under the spotlight like never before. While March saw a surge in enquiries, especially for income protection, this has now reduced to normal levels. The industry’s attention has shifted instead to encouraging customers to retain policies in the face of financial uncertainty. The Protection Distributors’ Group (PDG) recently highlighted the increased risk that policyholders impacted by the virus might cancel their cover, at a time when they need it most, and called on the insurance
sector to work to keep as many policies live as it can. In response, providers have announced various options, such as premium holidays and career breaks, to give customers greater flexibility. At VitalityLife, members experiencing financial difficulties can reduce their premiums each month by 25%, 50% or 75%, with a proportional reduction in cover. Although finances are an important consideration, physical and mental wellbeing are also key. This is where the added-value benefits of many protection policies come into their own. Services such as 24/7 video GPs, mental health support, specialist nurses, nutritional advice and online fitness programmes are just some that have seen a spike in use during lockdown. These services show that insurance goes beyond just protecting against worst-case scenarios. By encouraging a healthier approach, it can play an
important role in lowering the chances of illnesses occurring in the first place. These benefits also reduce strain on the NHS, allowing it to concentrate on urgent national health issues. The PDG and the Association of Mortgage Intermediaries (AMI) have put together a guide for advisers whose clients are considering cancelling their policies. This outlines reasons they should keep their cover in place, and provides options for those clients who cannot afford to do so. As well as the extra flexibility providers are offering in terms of premium payments, it’s important to remind clients of the valuable added benefits available with many policies if they consider cancelling. These days, protection is far more than just ‘insurance’, and many policyholders have access to a host of services that can be a real asset during challenging times. M I
Financial resilience and DIY haircuts Alisa Wallington senior product manager, iPipeline
ecision-making has never really been my strong point, but thanks to COVID-19, my life has become one guilt-ridden decision after the other. Have I managed to get everyone up, dressed, fed, and occupied? My partner can just about manage the latter himself, but my three-year-old requires assistance. Have I showered yet? No. Ensured video calling is turned off? Oops! And so, the day’s decisionmaking begins. LIFE BALANCE
If, like me, you have young children, the struggle to maintain a healthy balance between being a good parent and continuing to achieve a respectable level of working hours is hard. Yet this has become the norm for so many of us. As I type, I glance over to catch my kid attempting to cut the dog’s hair. Of course, he thinks this is hilarious and makes a run for it. Cue more time away from ‘my desk’ to inspect the damage. Under lockdown, the days are non-stop chaos; however, when the laptop closes and the kids go to bed, the mood eases and we are left with an abundance of…time. Time to start sorting out some of the things we’ve been putting off. Catching up with old friends, tidying the garden, throwing out old clothes (it’s time to accept that no amount of wishful thinking is ever going to get me back in that dress…). For many, this newfound extra time is also a good opportunity to start paying more attention to the state of their finances. www.mortgageintroducer.com
COVID-19 has severely impacted the mortgage market. New property sales have stopped, with half a million homes set to be ‘lost’ in 2020 due to the fallout of the virus. The number of mortgage products has halved, and several lenders have stopped lending altogether. Conversely, there are positive signs in the remortgage market. Online searches for the word ‘remortgage’ were up 60% in March compared to the monthly average, according to analysis by mortgage broker Private Finance.
“This surge in remortgages and product transfers provides the perfect opener for the protection conversation. There has never been a better time for brokers to demonstrate their value, so it is vital that advice covering the full suite of protection products is offered” The record drop in the Bank of England base rate to 0.1% triggered mass mailings from banks to customers currently on the standard variable rate (SVR). This will have inevitably prompted many to search for new deals in a bid to reduce monthly outgoings. Broker firms have also reported increased enquiries on remortgaging, product transfers and further advances, as people look at ways to improve their financial position. People are seeking to save money wherever they can, to provide emergency funds and protect the lifestyles and homes that they have worked hard to build and purchase. Mortgage brokers will have a critical role to play over the next few months in helping their clients make good
financial decisions and achieve better financial resilience. People are being forced to consider what is important to them and what they can to do to protect it. Behavioural science refers to this as ‘loss aversion’ and it is so much more powerful than the drive to gain. People want to talk about their concerns and future plans, and they want to talk about them now. This surge in remortgages and product transfers provides the perfect opener for the protection conversation. There has never been a better time for brokers to demonstrate their value, so it is vital that advice covering the full suite of products is offered. Life, critical illness and income protection should all be discussed, with an explanation of their relative importance, the chances of worst-case scenarios occurring, and the potential impact if they do. If the pandemic has taught us anything, it is that no one is invincible. Risk reports can be used where available to help support and personalise these conversations. It is also critical to identify any gaps in coverage, particularly if the client’s circumstances have changed. PRODUCT QUALITY
There is also an increased focus from the industry on the quality of protection products. Most providers now offer a range of ancillary services such as access to virtual GPs, counselling services and children’s cover alongside standard cover. These services are extremely relevant in the current climate and should be used to help strengthen recommendations. In the words of almost every politician out there, we are facing unprecedented times. As an industry, we are fortunate enough to be able to help people in their hour of need. Children and dogs are resilient. Their hair will grow back and all they will remember of lockdown is that they got to spend more time with mum and dad. Let’s use this opportunity to have as many protection conversations as we can, to help those mums and dads achieve the financial resilience they are so desperately seeking. M I MAY 2020 MORTGAGE INTRODUCER
For when business rises Steve Ellis head of risk and protection, Premier Choice Group.
e are in strange times, and serious ones. Not only are jobs and finances under threat – even for those who have been furloughed and hope to return to work – but so many plans are on hold. Many about to complete on a house sale, move house or take out a mortgage have been forced, or have chosen, to have holds put in place. That said, figures from HMRC show that the provisional seasonally adjusted estimate of UK property transactions in March 2020 was 99,440 residential and 9,470 non-residential. While down on February, that is slightly higher than the same time last year. The provisional seasonally adjusted estimate of residential property transactions in March 2020 is 0.3% higher than March 2019, and 0.2% lower than February 2020. While not wanting to be negative, one could assume that in the current climate, transactions will be impacted further as the pandemic continues. PROTECTION OPPORTUNITIES
There is little to advise clients, other than to be patient and maintain tight control on finances, not to run up debt or credit if they can afford it, and to keep finances on an even keel for when the market re-opens with gusto. It is certainly the time to explore what protection opportunities are available, to review life insurance, critical illness or income protection, to adjust or prepare to adjust in light of impending mortgage liabilities, or put protection in place if not already there. If the coronavirus pandemic is teaching us nothing else, it is that we can never be too prepared or protected. Some good news around the worrying is that lenders are responding
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positively to the Financial Conduct Authority’s (FCA) call for mortgage borrowers to have the option to take a three-month payment holiday if COVID-19 impacts on their finances. UK Finance figures show that 1.2 million mortgage payment holidays have already been agreed. This is swift, and for those facing financial difficulties it will have been a timely weight off their shoulders. Without doubt, however, the numbers are huge – one in nine mortgages is now subject to a payment holiday. The amounts will vary, but UK Finance says the average being held over is £260 per month, almost £1,000 over the three months. With potential options to extend, borrowers must keep their minds on catching up at some point, using that saving well and not adding debt if it can be avoided. Stephen Jones, chief executive officer at UK Finance makes the point that: “We understand that the current crisis is having a significant impact on household finances for people across the country. Lenders have a number of options available to help, and payment holidays aren’t always the right solution for everyone.” As their mortgage broker, you will be able to step in perhaps and help them through the best options, one of which is to consider whether they should take a break on the whole mortgage premium each month or just a proportion of it – to keep the ultimate down as much as possible. As healthcare intermediaries, we can also step in and help with budgeting. Let’s team up for our clients at this difficult time. It’s a straw to clutch at, but the rate of inflation has fallen, the 12-month rate was down to 1.5% in March from 1.7% in February, according to the Consumer Prices Index including owner occupiers’ housing costs. Expenditure will also be down in terms of travel and commuting costs. Unemployment rates were static and employment rates went up to
76.6% in the three months to February 2020, 0.4% higher than a year earlier according to the Office for National Statistics (ONS). Of course, those stats could all be upturned by the end of the next quarter, or we could see some balancing as individuals achieve employment in sectors suddenly looking for staff, such as supermarkets and agriculture. HOUSE PRICES
When it comes to house prices, the news may not be great for those selling a home. While UK average house prices increased by 1.1% over the year to February 2020, this was down from 1.5% in January 2020. The average house price increased by 0.8% over the year in England to £246,000, in Wales by 3.4% to £164,000, in Scotland 2.5% to £151,000, and in Northern Ireland to £140,000 (2.5%). Again, it is likely these figures will change when get the results of the impact of COVID-19 in Q3. Already there are mutterings from prospective buyers as to whether the lockdown will mean prices are lower on the other side. This is far from the spirit of the thing, but markets are markets. Of course, a freeing up of movement in the market might create competition and send prices higher. What is apparent to us as healthcare intermediaries is the importance of making sure insurances to protect health and income are maintained in circumstances that will be proving constrained. This is not the time to cancel life or protection insurances. The amounts are invariably reasonable enough as to not make the hugest dent in family budgets, and the value lost should outweigh the outgoings, with the possible exception of private medical insurance (PMI). Nevertheless, even PMI has an invaluable function in getting people back to work, or indeed back to the home looking after family, and most importantly of all, back to health. M I www.mortgageintroducer.com
The best and the worst of times Jeff Woods campaigns and propositions director, Sesame Bankhall Group
lthough the phrase ‘living in unprecedented times’ has been overused, it is unfortunately true. Another common phrase is that a crisis brings out the best and worst in people. Fortunately for me, I’m seeing mostly the best. I feel proud of our industry, just as I am of our NHS and front-line workers of all types. Elsewhere, we have Captain Tom Moore raising over £29m for the NHS. It isn’t just that he’s captured so many people’s imagination, it’s also the gratitude that’s being shown via Captain Tom to the NHS.
the variety of companies we’re talking about, what’s undeniable is the huge commitment that’s been made to make all this happen. We have also seen collaboration like never before from organisations across the industry, such as the Association of Mortgage Intermediaries (AMI), PDG, the Income Protection Task Force (IPTF), the Association of British Insurers (ABI) and product providers. This has all been focused on ensuring the customer gets the best possible outcome from a very difficult situation.
Out of this crisis we’re seeing innovation, especially when it comes to underwriting, around how we gain sufficient evidence to offer terms in order to give greater access to those that need it most. And, of course, the great British adviser is showing true resilience in the face of adversity and will, as in 2008, emerge stronger and better equipped. Every single one of us is living through an event that makes us realise how much we rely on our income or our partner’s. It reinforces why it’s so important for customers to have access to the best possible advice, so they understand how they can make themselves more financially resilient when things do not go to plan. They’re probably sitting at home right now, so why not phone them for a chat? M I
NAMING AND SHAMING
Closer to home, we’ve unfortunately also seen the worst, with some lead generation companies and even so-called adviser firms looking to profiteer from people’s vulnerability. It’s despicable, and we should all work hard to eradicate them by naming and shaming when we can. I applaud the Protection Distributors Group (PDG) for its efforts, and the commitment from providers such as AIG to hunt them down with the #keepprotectiontidy initiative. If you see anything that isn’t right, then let them know. In terms of the best of people in this industry, praise has to be given to the commitment so many companies have made – intermediaries, providers and suppliers – to first and foremost make sure their own people were safe by moving to remote working, whilst continuing to serve customers. Whilst there have been varying levels of success, which isn’t surprising given www.mortgageintroducer.com
This crisis reinforces why it is so important for customers to have access to the best possible advice
MAY 2020 MORTGAGE INTRODUCER
What legacy will coronavirus leave? Rob Evans CEO, Paymentshield
here isn’t an industry in the world that has been unaffected by the coronavirus pandemic. The impact on financial services in particular could be felt for years to come. This industry has adapted quickly to government advice and changed its working practices, with video calls and webinars now the norm. However, many are questioning what the lasting legacy of the pandemic will be: will we keep the new working habits, and will those organisations that adapted and pivoted quicker than their competitors stand to gain more in the long term? LOOKING BACK
There can be lessons learnt from the approach some advisers took during the 2008 recession. When the property market ground to halt, advisers switched to selling general insurance (GI) as a supplementary way of boosting income. With the uncertainty in the property market currently mirroring that of 2008, a number of advisers are now reigniting that same approach. Advisers are focusing on general insurance through three methods: working their back book; offering existing clients a financial review; and utilising remortgage applications to offer product transfers. Our own research has shown that advisers selling eight GI policies per month over a period of five years can net almost £100,000 in commission. To help advisers make the transition towards boosting commissions in GI, Paymentshield has launched a series
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of learning and development training resources. These resources could help contribute towards the 15-hour CPD requirement that forms part of the Insurance Distribution Directive. The series of webinars, e-books and whitepapers aims to break down the common barriers advisers face when selling general insurance, arming them with both the knowledge and the confidence to carve out opportunities to supplement their income. There was scepticism about how the industry would react to the new working practices, and in turn about the impact on productivity. At Paymentshield, it was a huge challenge to go from 20 home workers to nearly 240 within just a few weeks, as well as setting up our virtual call centre, but our productivity has never been better. Our pace of change delivery has increased, and customer and broker calls are getting answered quicker, with fewer drop-offs. With many advisers currently on furlough, we have seen a trend where more customers are contacting us directly to renew policies, having struggled to contact the adviser who
The industry has been quick to adapt
would normally arrange renewal. In these cases, we have attributed the commission to the adviser who originally sold the policy. The way in which advisers are communicating with clients has changed, and technology has been a great enabler. Phone and video calls are now replacing face-to-face meetings and advisers are utilising social media to retain and attract new clients. In our recent adviser survey (carried out before lockdown) 53% of the 215 respondents said that they use social media as a way of promoting their business, with Facebook coming out as by far the most popular platform with 93%, ahead of LinkedIn in second place at 64%. QUICK RESPONSE
The COVID-19 pandemic has accelerated the scale and pace at which technology is being adopted in financial services, and social media is playing a key role in this explosion. We are seeing more advisers take to social media and use it as a channel to reach new and existing clients. The established platforms, such as Facebook, LinkedIn and Twitter, will continue to be the main social channels used to reach clients, but platforms such as WhatsApp are also increasing in popularity. Social media has been a vital tool during the pandemic to help people maintain communication channels, and many advisers are taking a multichannel approach, increasing the ways in which clients can engage with them. The insurance and financial services industries often suffer from a reputation as slow-moving beasts; however, the response to COVID-19 and the results of observing government guidelines and restrictions would demonstrate quite the opposite. It has brought both industries closer as organisations pull together, share knowledge, collaborate and help each other get through this. It remains to be seen what lasting legacy the pandemic will leave, but a renewed focus on GI and greater use of technology to engage customers are two habits I think are here to stay. M I www.mortgageintroducer.com
Life after COVID-19 Geoff Hall chairman, Berkeley Alexander
ith everyone reeling from the impact of COVID-19, the ramifications for brokers’ businesses will be massive. Mortgage sales are likely to take the biggest hit, making renewals business and all other additional income vital in keeping the ship afloat in rough seas. And it’s not just about your business. Every Financial Conduct Authority (FCA) authorised company has the regulatory duty to help it meet its objectives: protecting consumers, ensuring the integrity of financial markets, and making sure competitive markets work well for consumers. It is an old refrain when markets take a turn for the worse, but general insurance (GI) sales have long been the saviour for brokers when mainstream income becomes restricted. I’ve worked for Berkeley Alexander for over 30 years and lived through a number of recessions; on every occasion, I have seen brokers weather the storm by increasing their GI sales. Of course, at this time, it may not be appropriate to approach all customers on new sales. Clearly there is a need
to approach clients sensitively, and whatever you offer has to be in their best interests, but they will value your help and support in finding the right cover at the right price. Retention is key, but investing some time in an audit of your back book and looking for other opportunities should prove fruitful. Make a record of mortgage customers that didn’t purchase home insurance through you. Also, what other types of cover would they benefit from? Do not restrict yourself to standard policies – often it is in niche or specialist policies that your client will derive more value. For instance, do they own or run their own business? They will have commercial insurance, but do they own a property investment portfolio? That needs insuring! Utilise the expertise of a provider with a broad range of product types and you will see sales and ongoing renewals from GI become a welcome source of income that all adds up, whilst also providing valuable support and assistance to clients. Fully understand your existing book and extend it by looking at clients’ M I profiles for sensitive, targeted cross-selling, if appropriate. We have to appreciate that the current circumstances are unusual, but there is still the opportunity to maximise GI income potential that should not be ignored.
The unoccupied property dilemma
hilst the arguments rage on over business interruption (BI), another area of contention that has come to light is how to handle unoccupied property. This is clearly a critical issue now, whilst everyone is being asked to work from home, leaving thousands of properties and office buildings empty. In my opinion, the industry has reacted quickly, with most insurers being flexible on the issue; saying that cover is still in force
and extending the period to 60 or even 90 days before any restrictions on cover are applied. In addition, most insurers are being reasonable over the conditions that apply, for example accepting that owners can’t carry out regular checks due to travel restrictions. However, there hasn’t been a completely consistent industry-wide approach, currently meaning policyholders will need to check terms with their individual GI provider.
COVID-19 business interruption claims
he insurance industry is taking criticism regarding its handling of COVID-19 business interruption (BI) claims, unfairly in my opinion. The government has been suggesting insurers can now pay out on claims because it has classed COVID-19 as a notifiable disease. However, most BI policies don’t have cover for this.
“BI is there to cover the lost income for a specific business against specified occurrences” Typically, physical ‘damage’ needs to occur before business interruption insurance cover is triggered; this is known as the ‘material damage proviso’. A voluntary or mandatory closure as prescribed by the UK government is typically not therefore covered by most policies due to the lack of physical ‘damage’. Some policies will have cover following enforced closure due to infectious diseases, but these are normally specified diseases; of course, COVID-19 won’t have been specified in these policy definitions. Anyway, BI is there to cover the lost income for a specific business against specified occurrences. It is not designed to cover lost income as a result of a national, or worldwide, downturn in the economy. COVID-19 is unprecedented, and the government may well decide in the future to take measures that compel insurance companies to grant policy coverage in some shape or form, with a levy charged on all insurances or a guarantee backed by the state, as has happened in the past with terrorism and flood cover. MAY 2020 MORTGAGE INTRODUCER
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Weddings, divorces and being cheerful David Bennett commercial director, eKeeper
t would be safe to say that Zoom, Teams, WebEx, etc. are no longer the preserve of the technosavvy nor the office linguist who craves more jargon to justify their employment. Now children, parents and grandparents are meeting virtually for pub quizzes, catch-ups and in some quarters to marry, albeit without the consummation. Broader online interaction has quite literally evolved in just two months, what would normally take two to three years, not out of choice but out of necessity. Take the bell curve of product adoption; rather than being the title of a prog-rock album, instead it has consistently tracked the innovation adoption lifecycle of “new technology” from the initial innovators to early adopters through to those pesky laggards. Think of a technical product in the past ten years like a tablet or mobile phone and then think about your friends, family and co-workers, to work out who is where on the curve. The initial innovator would be that friend who has to buy the latest piece of kit, typically a risk taker who simply has too much disposable income. The early adopters, are a bit more informed but tend to push their newfound piece of shiny onto us, regardless of whether we’re interested or not, the “look, I can Bluetooth into my water filter” type. Finally, the laggards, those who are resistant to change and revel in the traditional, often at the expense of being left behind; think of the hours a grandparent takes signing up for
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Facebook. Most of us fall into either the ‘early’ or ‘late majority’. But through COVID-19, we’re not talking about some luxury gizmo to fascinate the credulous, what we’ve seen is a mass acceleration of adoption of remote technologies, not only in the intermediary world but those of the general population – because we have to. This is likely to permanently alter the way we will work going forwards, even given the return to some resemblance of normal. It is likely to alter not only how accepting mortgage customers are to interact with remoting technology, but also change their expectations that remote technology should be available as a normal part of business. Now at this point, the seasoned technologist would refill their pipe and regale the listener about how such and such product will achieve this. Instead, let’s look towards the potential reality of the COVID-19 world, prior to any vaccine. REASONS TO BE CHEERFUL
It’s hard not to be positive about a post COVID-19 world. With research and statistics, announcing that there’s £82 billion of property “in the hopper” (Zoopla) and 75% of homeowners are still wanting to move (reallymoving) after lockdown, I look towards the more simple and realistic fact that financial services continues to be driven by an individual’s personal circumstances. Just as Zoom is facilitating weddings, other natural factors come into play
– for example, a potential boom of children in Q1 2021 – and my personal favourite from Wuhan, the epicentre of the outbreak, when their lockdown was lifted the administration office receiving divorce filings had to close due to the record numbers of submissions, something that has been consistent with cities lifting lockdown across China. With record-low interest rates and encouraging signals that the mortgage market will not only exist but is likely to aid in the returning to some normality, what will be the challenges? Is it that video conferencing will permanently replacing face-to-face meetings? Is it non-interactive due diligence such as AML and Credit Reports speeding up the process and qualifying the customer? How about direct-to-lender submissions via API connectivity? Or is it building or reinforcing your online presence and using more effective qualification and acquisition at the lead stage? It is actually likely to be all of these. In an industry not known for speedily embracing technology, intermediary software has previously been positioned, not as a fundamental part of the business, but on its merits as a convenience to: the client, the adviser, the administrator or the business principal. Now that has changed and technology is the necessity for the continuation of business, remote or otherwise. It starts from the backoffice, by structuring your sales, fulfilment and post-sales processes, but it also starts with the security of your biggest asset – your client bank. Once you’ve got that, the rest will fall into place. Convenience features such as client portals, electronic signatures, ID verification and the like will start to flow to deliver that digital / remote journey that your customers will expect in today’s new reality. But if you have built your business on poor foundations, when the market accelerates (or returns to something like before) the world will have irrevocably changed. If your approach to technology is the same as before or worse, embracing the laggard, you may well find that the world has moved on and left you behind. M I www.mortgageintroducer.com
Discard manual AML checks John Dobson chief executive, SmartSearch
he advent of social distancing has highlighted the shortcomings of many outdated business processes. With lockdown restrictions in place, it simply hasn’t been feasible to conduct business face-to-face, and the physical exchange of documents has also been all but impossible. The Financial Conduct Authority (FCA) has – unwisely in my view – let it be known that it will temporarily allow firms to use various workarounds for their know your customer (KYC) and anti-money laundering (AML) due diligence. It’s clear, however, that scanned PDF documents and ‘selfie’ photos and videos are not sustainable. It is hard to imagine that this approach will be allowed to continue, as it simply makes life too easy for money launderers.
back into lockdown. In the absence of an effective (and widely available) vaccine, we could face several ‘waves’ of these restrictions. Even if a vaccine is developed quickly, there is no guarantee that another pandemic – a mutation of COVID-19 or something totally different – will not materialise. From now on, business continuity plans will need to reflect the possibility of another major public health emergency, a risk that arguably overshadows even that of a terrorist attack. This will include making provisions for staff working remotely. But the most important reason it would be a mistake to cling to manual document checks is that they are simply unnecessary. Fully digital solutions are available that
can completely remove the need for physical documents to change hands, while allowing firms to remain 100% in compliance with regulations, regardless of where their staff work. WAKE-UP CALL
Electronic verification is not only more convenient, it is also more costeffective, especially when you consider that a full check can be performed in a matter of seconds. It is also much more secure, eliminating the possibility of fake or falsified documents being used. It shouldn’t take the threat of a global pandemic to force businesses to discard outdated practices, but if they are still clinging to manual ID checks, this should at least serve as a very loud wake-up call. M I
Firms that are currently relying on the hotchpotch of measures set out by the FCA need to think about a back-up plan for when these workarounds are no longer deemed acceptable. Otherwise, they could find themselves unable to take on new business. There is now some suggestion that restrictions may be eased, and it is tempting to think that firms might be able to go back to physical document checks. This would be a mistake for several reasons. First, it is clear that any easing of restrictions will be partial and phased. Even if some retail and catering facilities are permitted to reopen soon, it is unlikely that office workers will be part of this initial phase, so the problems associated with manual document checks will remain. We also have no way of knowing if and when we will all need to go www.mortgageintroducer.com
Electronic verification is not only more convenient but more cost-effective and secure
MAY 2020 MORTGAGE INTRODUCER
Working together to make it through this Mark Snape managing director, Broker Conveyancing
y the time you read this, it’s likely that the three-week extension of the lockdown will be over and – judging by the mood music currently being played in Westminster – we will be embarking upon a further extension taking us to the end of May. Even if lockdown has started to be lifted, the best-case scenario is that this will be phased, and that when it comes to a return to work, each sector will be treated on its own merits. Whether that extends to the property market is still up for debate, although I’m acutely aware that many are lobbying for the sector to be one of the first to open up. That is perfectly understandable, given the importance of the housing market to the overall UK economy, and indeed the confidence that it can provide to the wider general public. For better or worse, housing is often seen as a benchmark for the performance of the economy. Were we to ‘open the doors’ to future activity, it would likely give a significant boost, not just to market participants but right across society. Again, rightly or wrongly, house price levels are often taken as a barometer of where we are in any economic phase; to that end, there seems little doubt that we’ll see prices decrease in the short-term. Just what level of fall prices will take is up for debate; it will depend on how quickly we can get the sector up and running again once the lockdown is easied, and what sort of rebound or pent-up demand can be unleashed at that point. Even so, we must all prepare
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ourselves for some spectacular lows and highs during 2020, which is likely to look like no other year in living memory in that regard. Take, for instance, the potential impact the virus may have on transaction and activity levels. Recent research from Knight Frank suggests that during 2020 this could mean the loss of 526,000 home sales, and 350,000 fewer mortgages, compared to what might have been achievable in any ‘normal’ year. FURTHER IMPACT
Knight Frank has also predicated these results based on the lockdown being partially lifted from June, so you can imagine what the further impact might be if this is not in fact the case. Indeed, we must factor in the possibility of different phases of lockdown, not just the one we’re currently in. Should the virus levels begin to spike again, say in October or towards the end of the year, then the government has already signalled that it would be willing to repeat these measures. This, of course, leaves the housing market in a difficult situation. While we must all applaud those lenders that have been willing to accept desktop or automated valuations during the current conditions, there is still a huge raft of housing market business that cannot be progressed without a physical valuation. The great unanswered question is, what happens when lockdown ends? If those Knight Frank numbers are anywhere near correct then all housing market stakeholders will feel it severely. As you’ll be well aware, this is not simply a case of transactions and mortgages falling through and impacting on consumers. What about the estate agent, mortgage adviser, lender, conveyancer, surveyor, distributor, panel manager, and
packager? The list goes on. The livelihoods of so many businesses and individuals are tied up with a fully-functioning housing and mortgage market. This perhaps makes the case for an early reopening of this sector even more compelling. From the perspective of a government currently paying out huge sums of money, it would certainly be preferable to be able to recoup some of the many billions in taxation it gets from property sales. Don’t get me wrong, many industries and sectors across the UK economy have been hit much harder than us by this shutdown, but in terms of the ability to put a metaphorical smile on the face of our economic progress, getting back to some sort of property market normality would surely be a key ambition for any government. At least, you would like to hope so.
“The message is all about making the most of the opportunities that do exist” In the meantime, we are fortunate in that certain types of business can continue to go ahead, and that the industry has come together in terms of its use of technology in order to make this happen. Consumers seem to want to progress their cases, whether purchase or remortgage, and where possible, lenders are facilitating that, again utilising solutions where they can, and trying to get to completion wherever it is possible. It remains a very difficult time, particularly for advisers, but as usual the message is all about making the most of the opportunities that do exist. This means maximising ancillary sales and, where it’s not possible to progress cases, getting them into a position where they can move forward as and when the conditions finally allow. We are seeing the resilience of the advisory community in spades at the moment. Keep digging in and answering all your clients’ needs, and we will continue to work together to get to that light at the end of the tunnel. M I www.mortgageintroducer.com
This was never going to be easy Stuart Wilson CEO, Air Group
xpect the unexpected’ is a mantra you tend to hear a lot in business, along with the phrase, ‘fail to prepare, prepare to fail’. These clichés are trotted out regularly and while I suppose there’s an element of truth to them, they don’t really cut the mustard when you come across a truly unexpected event, or a situation which seems impossible to prepare for. Market downturns are a natural part of our existence in financial services, particularly in the housing and mortgage markets. Those of us who are long enough in the tooth are acutely aware of this, and it therefore pays to be ready for the next hit. That said, few would have kicked off 2020 anticipating anything like the situation we now find ourselves in. Even those who follow world events closely might not have been truly aware of what an outbreak of a particular virus in Wuhan, China would eventually mean first globally, and then specifically in terms of the health of our nation and our economy. For those who did anticipate what followed, I salute you for being far and away ahead of the curve on this one. Yet I suspect whatever you did to prepare, apart from perhaps ensuring that your business had as much cash in reserve as possible, would never have 100% protected you against the lockdown, what it has meant for our sector and our ability to provide advice, and the impact it would have on lenders and providers. In that sense, we’ve had to be reactive to what has happened, and www.mortgageintroducer.com
from an equity release sector point of view, I couldn’t be more proud of the efforts that have been made to keep business flowing, keep on advising clients and maintain the quality of advice standards that are required by our regulators and trade associations. It was never going to be easy, particularly given the reliance on faceto-face advice with clients, not just from a financial perspective but also for ensuring independent legal advice. To that end, the Equity Release Council (ERC) moved incredibly quickly to temporarily revise its rules about face-to-face meetings with solicitors, acknowledging that without a change there would be no hope of getting cases through. Our providers were also able to make some rapid changes to criteria requirements, perhaps most notably in the area of valuations, where the lockdown has – for the most part – put a temporary stop to physical valuations. Normally, in-person valuations are a highly important part of the lending process, but we have now shifted to a situation where (at the time of writing) almost all equity release providers are accepting either desktop or semiautomated valuations. That constitutes a major step change over the past few weeks, and is a rapidly introduced amendment from providers which will allow equity release business to continue to be
“Expect the unexpected”
written, rather than us looking down the barrel of a stalled marketplace throughout the entire, indefinite lockdown period. It’s this ability to react quickly that is hopefully allowing advisers to continue working with clients, providing advice, and placing cases. Communication across the piece has been absolutely key, whether it’s advisers continuing to converse regularly with their clients, organisations like ourselves offering information and support via our coronavirus hub and updating our sourcing system quickly, or providers similarly offering a range of resources, whether specifically work-related, or more general insights into how to work remotely during this period. There’s also been a recognition of what advisers are currently going through in terms of potential cashflow issues, coupled with the continued need to have access to the best commercial terms and the very latest information. We’ve been fortunate to work with two academy ambassador firms, Canada Life and more2life, which have agreed to cover the membership fees of all our advisory academy member firms during the lockdown period. While the cost of these fees is not going to make or break an advisory firm, it’s important we do all we can to help. This is another example of equity release stakeholders all working together in order to keep activity levels up, and to ensure that consumers continue to have access to high quality advice in this area. It’s impossible to predict what might happen next, but in our reactions to this crisis we can definitely ensure the best possible advice environment right now. We can also do whatever we can to get back to normality quicker, while providing advisers with everything they need to hit the ground running as soon as the lockdown is relaxed. I think we all appreciate that this is going to be a longer haul than some might have initially anticipated, but the later life lending sector is showing resilience in the face of adversity, and we will continue to work together to support all stakeholders. M I MAY 2020 MORTGAGE INTRODUCER
Maintaining standards in challenging times Claire Barker managing director, Equilaw
s the rising tide of coronavirus cases continues to impact on social and economic conditions around the world, a climate of uncertainty has taken root at the heart of public life. Most events of global significance can be measured in terms of a specific root cause or combination of factors, invariably political or economic. Yet COVID-19 defies conventional categorisation. It can only be defined in terms of its unpredictability, singularity and potential for future damage – a Black Swan event, as many commentators have described it. Previous pandemics have demonstrated an almost limitless capacity for economic and social upheaval, with recessions or downturns proving a near-certainty. However, careful analysis of these events can also help policymakers to identify measures needed to minimise longterm economic damage and to protect population health – a sort of warning from history. The last pandemic of truly global proportions, and the event closest to mirroring current circumstances, was the Spanish Flu pandemic of 1918-19. This accounted for at least 20 million fatalities over an 18-month period, as well as catastrophic declines in manufacturing, consumer spending and business activity. This led to significant financial reverses around the world, with a 6% decrease in UK GDP, and comparable difficulties in the US. However, recent research has established that US cities which implemented stringent social distancing
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measures at an early stage experienced far lower mortality rates and far stronger economic performances once the pandemic subsided. POSITIVE GROWTH
Analysis of post-1919 economic conditions has also suggested that any future downturn is likely to be short-lived (representing a sharp V as opposed to an extended U). Economists predict a brief, though undoubtedly severe, recession in the short-term and the possibility of positive growth emerging in the last quarter of the year, depending on containment and quarantine, financial stimulus from the government, and low or even negative interest rates to support spending measures. So, the outlook may not be as bleak as some would have us believe. Nevertheless, as the value of pensions, savings and other investments continue to fall prey to the vicissitudes of the stock market, and mainstream finance options begin to falter, the need for UK retirees to establish dependable sources of income or offer financial support for family members has become a matter of grave urgency. Many financial experts believe that the equity release (ER) sector is uniquely placed to help older customers meet their financial obligations, offering flexibility and choice that could prove crucial to those who are reliant on equity wealth. Moreover, with many mainstream mortgage lenders choosing to suspend applications or to impose caps on borrowing, experts predict that demand for ER products will continue to grow exponentially over the coming months. Some lenders (such as more2life) are already prioritising video conferences and laptop valuations to keep customers on top of transactions. Anecdotal evidence has already suggested a dramatic upsurge in the number of financial advisers taking
ER qualifications (primarily, it seems, to remain competitive), while research by the comparison website Over50schoices.co.uk has discovered that consumer interest in ER products has remained buoyant, albeit tempered by understandable hesitation. Consumer confidence, a fragile commodity at the best of times, appears to be undaunted by current events. However, for many in the sector, ER is about more than just financial gain. The industry has taken a great deal of pride in the standards and safeguards introduced over the years to protect customers. It is the ability to transform people’s lives for the better, while ensuring that applications are underpinned by a robust and impartial legal process, that remains at the heart of everything we do. To this end, the industry has worked hard to ensure that standards of service and protection are maintained throughout the crisis, and that existing safeguards are strengthened to counter the growing risk of wrongdoing. As the number of people losing their jobs continues to rise across the UK, the potential for fraud, duress or coercion of vulnerable customers is likely to intensify. The Equity Release Council (ERC) has sought to pre-empt this by consulting with members on possible changes to its standards. These changes allow for a temporary modification regarding the necessity for face-to-face legal advice, and to ensure that customers are offered the same level of protection and advice remotely. A potential stumbling block is the requirement for deeds to be physically witnessed by a legal professional; we are currently waiting to see if lenders will accept a scenario involving nonlegally qualified witnesses. If they choose not to, we could see a distinct lack of lending in the near future and the possibility of the sector grinding to a halt; something that nobody wants to happen. There can be little doubt that, given the chance, equity release could play a major role in mitigating the economic effects of the COVID-19 crisis, providing a lifeline for many thousands of vulnerable people. A genuine force for good. M I www.mortgageintroducer.com
Collaboration and communication Alice Watson head of marketing and communications, Canada Life
ver the last few weeks, coronavirus has significantly impacted our day-to-day lives, and this is no different when it comes to the workplace. With many offices now closed and all non-essential travel restricted, for those of us without a home office, kitchen tables are quickly becoming the norm. It’s really important we take collective responsibility for how well we work together so we can focus on building better futures for our colleagues, customers and advisers. Working in a virtual team can be productive, but it’s an adjustment, so establishing a routine is crucial.
Simple measures such as agreeing start and end times, getting dressed for work, reducing distractions and taking regular breaks will help you focus. Communication and visibility are also key. We all appreciate seeing a friendly face, and tools such as Zoom are making this possible, allowing not only co-workers to check in, but advisers to provide support and reassurance to their clients. While the majority of advisers are already embracing technology, they should also think about how well their current relationship management tools are supporting customers’ needs. As lenders, we’re working extremely hard to ensure we’re keeping advisers, and ultimately their clients, up to speed with changes to processes and existing products as a result of the rapidly changing environment. Not only does this include adviser communications, but dedicated information hubs where
they can find up-to-date information. We mustn’t forget, however, that there are plenty of opportunities to be found in times of crisis. For example, some lenders have introduced remote valuations to allow them to progress applications during this period. With more time to learn, many lenders, Canada Life included, are creating engaging webinar content for the adviser community, giving them the chance to learn about current market changes, as well as helping them improve their knowledge and understanding of the sector. The situation presents some challenges for the later life lending market, but it’s important to look to the future and focus on opportunities. At times like this, collaboration is vital, and it’s been great to see the equity release industry pulling together and embracing technology to deliver solutions for advisers and their clients. M I
Your equity release q Stuart Wilson, corporate marketing director at more2life, answers the most common questions advisers ask about equity release How do early repayment charges (ERCs) work
and when are customers not required to pay them? Lifetime mortgages are designed to last a lifetime and, as such, are typically subject to ERCs if a customer wishes to repay their loan early, either in full or in part. The size of ERCs can vary depending on a range of factors, but there are two main types. Fixed-rate ERCs are a fixed percentage of the total outstanding balance and usually reduce on a sliding scale over a set number of years, after which there is no charge at all. The other main type is gilt-based ERCs. These are linked to the movement of 15-year gilts against a ‘benchmark’ rate set at the start of the loan, and are typically seen as quite complex to track. There are many features that lenders build into their plans which allow for the exemption of ERCs. Standard exemptions include porting a loan from one suitable property to another, the repayment of the loan following a move into long-term care, or repayment following the death of the final borrower. There are other instances when customers may be exempt from ERCs, but these can vary from lender to lender. Some providers have introduced partial capital repayment policies on their products, offering increased flexibility for customers. Others have started to offer customers the option to repay their loan within three years of the death of their spouse or partner without being subject to ERCs. In addition, some plans now allow customers to downsize to a property that does not meet the lender’s specific criteria without having to pay ERCs – this product feature is commonly referred to as ‘downsizing protection’. What happens when a client dies? Does their family have an opportunity to purchase the property? When a client – or the second borrower in the case of a joint loan – dies, the property must be sold to repay the outstanding balance. This includes the borrowed capital and any rolled-up interest. The death of a family member can be a difficult time and as part of their commitment to treating customers fairly, lenders are keen to work as closely with the family
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as possible to help with the process. In the months following the customer’s death, providers expect to see positive action being taken to market and sell the property, within a reasonable timeframe and at a fair market value. However, there are no restrictions around who can purchase the property and most lenders are happy to agree a deal with any immediate family members, should they wish to buy the home before it is listed on the open market. If they do wish to purchase the property, the loan must be repaid in full and come directly from the acting solicitor representing the previous homeowner’s estate, or where a suitable grant of probate exists. This process can be made more complicated in cases where probate is not established, so it is important that advisers speak with clients and their family members about this when equity release policies are initially taken out. Can tenants in common be accepted for an equity release loan? Tenants in common means that two or more individuals own ‘shares’ of a property, which can be in varying proportions – unlike joint tenants where each party has an equal claim. For example, one tenant could own 25% of a property whilst the other could own 75%. Naturally, this can complicate an application for a lifetime mortgage as the tenants may have different aspirations for the property. For instance, one may wish to gift their share to a loved one upon death, whilst the other may not. As such, lenders would be more cautious of offering a plan where other owners have a share of the property. However, that’s not to say it’s impossible. Normally in these cases, a lender will ask that all interested parties are included in the loan, so it becomes a joint policy and the agreement is held between the customers. Can clients make interest repayments on an equity release loan? Policies featuring interest repayment options are now offered by a variety of providers and are often referred to
questions answered as ‘interest served’ plans. These products are designed for clients who have the means and desire to continue servicing their lifetime mortgage. These could include customers who have taken out an equity release plan to help existing debt as an interest-only mortgage. Although some providers offer ‘repayment holidays’, it’s common for lenders to transfer the plan over to a standard roll-up model, should the customer wish to stop making repayments. It’s also important to note that if customers wish to stop their interest repayments, it may not always be possible for them to restart these at a later stage. Historically, interest served plans were more common. However, the requirement to check the affordability of interest repayments, introduced as part of the Financial Conduct Authority’s (FCA) Mortgage Market Review, made access to these types of policies more difficult for customers. This requirement has since been rescinded, but still means that there are fewer of these plans on offer today than there once were. However, more recently, modern lending features like partial capital repayments have emerged, giving clients more flexibility in terms of managing their actual loan. Customers can set up a regular plan to repay the loan capital whilst avoiding any ERCs. This typically ranges from 1% to 10% of the initial loan amount each year. Clients can use these policies as an interest served type arrangement which applies to the capital as well, and with the added flexibility of starting and stopping their repayments at any point.
still on the title deeds. That said, this can be sorted out and we do find that some people use equity release to give their former partner their share of the equity without needing to sell the property. Advisers should speak to the lender to see how they can help. M I Stuart Wilson
For customers who are married, do both of them have to be over the age of 55 to qualify for an equity release loan? Yes – for joint loans, both applicants must be over the age of 55. Currently, there aren’t any equity release plans available in the market to individuals aged under 55. For customers who are already divorced or getting divorced, can they be accepted for an equity release loan if their estranged partner is still on the title deeds? With over 90,000 divorces in 2018, this is a fact of life for many people and we do find that the older age groups are not immune to this trend. Someone who is divorced and owns their own property will have no trouble getting equity release, but it will be more complex if they are getting divorced or their partner is www.mortgageintroducer.com
Our way of working is changing forever Kevin Webb managing director, Legal & General Surveying Services
hen we emerge from the current crisis, some of the challenges we faced before will persist. Climate change is not front-page news right now, but will re-emerge as a pivotal business issue. The lockdown may have illustrated the cost of shutting down parts of the economy and keeping employees at home for weeks, but it has also shone a light on the environmental impacts of our normal way of life. Every business has a duty to help reduce its own carbon footprint and help clients and customers achieve a similar goal wherever possible. ENVIRONMENTAL ISSUES
The Prudential Regulation Authority (PRA) has already asked financial institutions about their responses to climate challenges. Legal & General Capital recently announced a 36% stake in one of the UK’s largest players in ground source heat pump technology, as it scales up its investments in addressing decarbonisation. Heating and hot water for UK homes make up 25% of total energy use and 15% of our greenhouse gas emissions. By 2025, the current consultation on new building regulations will likely outlaw fossil fuel heating systems for new builds, presenting a significant opportunity for alternate low carbon heating solutions. Retrofit also represents a significant market opportunity, with around 23 million homes in Great Britain using mains gas (which is carbon intensive), two million homes electrically heated
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(which has high running costs) and the remaining two million using heating oil or other fossil fuel systems (both carbon intensive and with high running costs). In the world of property valuations we will need to understand the ramifications of these things upon value. Equally, current public health and climate concerns are coinciding with a need to reduce the role of physical inspections. Our way of doing things is changing forever. Digital valuations are already embedded in our business. We have been delivering remote digital valuations using data, modelling, analytics and technology for a couple of years now. The current working environment has accelerated the growth of remote digital valuation on a massive scale – in the last six months we have conducted over 50,000 – and has the potential to change the way our industry assesses, undertakes and manages property risk. In this market 20 years ago, valuers drove to properties to assess risk on behalf of lenders and homeowners. For
A light has been shone on environmental matters
the past 15 years, we have been refining automated valuation models (AVMs) for an increasing proportion of the UK’s housing stock. Now, a blend of automation and local knowledge is key. We expect our number of remote digital valuations to grow for two reasons: they address the need to use available data and save our lenders unnecessary operational costs, and they fulfil a growing demand to address carbon footprint issues. TECHNOLOGY SOLUTIONS
I also believe that the lack of precedent for our current market in AVM data will drive more new business over time to a ‘second check’ by a qualified person via a desktop. After all, we should not address one set of risks by creating another in the shape of a total dependency on data that may or may not be timely enough to reflect current market trends. AVMs are also professional indemnity (PI) backed and signed off by a Royal Institution of Chartered Surveyors (RICS) qualified valuer, whose experience and expertise can leverage the information available in the ‘data lake’ to correctly ascertain the value of a property. We are certainly not short of technology solutions to access and manipulate the data. The role of surveyors and valuers is not disappearing. Our panel firm model means we can employ expertise that can match the ebb and flow of lenders’ own businesses. But the way property valuations are made will continue to evolve to meet the demand for a new balance. Digital valuations were happening anyway – current circumstances will simply hasten their adoption where and when it is appropriate. Within Legal & General’s own fastgrowing housing platform, which now spans build-to-rent, build-to-sell, later living and affordable housing, as well as modular construction, plans are already underway to make all new housing stock operationally net carbon neutral between now and 2030. Our mission is to support that and achieve a similar ambition in valuing for our lenders and the housing industry. M I www.mortgageintroducer.com
The time value of money Steve Goodall CEO, ULS Technology
hat time is money is not a new concept. As I write this column in mid-April, however, it seems bleakly that time is now money lost. We are in the middle of lockdown. That this will end, though, is inevitable. Our national response to this pandemic has proven that mankind will do whatever it takes to survive and protect life, including at its own economic cost. In the housing market, this economic impact is keenly felt by the many cashdriven businesses in the value chain. From estate agents to brokers, and from conveyancers to valuers, many businesses are dependent on transactions, and the speed of those transactions, to thrive. Putting the economy on hold has been necessary to preserve lives, but it has massive consequences that will affect us all for years to come. But – and it’s a really big but – the total life change that has occurred as a result of lockdown offers as much opportunity as it does challenge. REMOTE WORKING
Millions of us have begun working from home, meetings are being held remotely, and broadband is now considered a more fundamental infrastructure than the rail network. Talking among colleagues and friends, it’s apparent that working from home is also helping many of us to be more efficient. Less time spent on the commute is more time either at our desks or spent on life-improving things like sleep, outdoor exercise and time with our families. The added benefit of cleaner air is another reason to be cheerful. While it has been a consequence of lockdown and coronavirus, something www.mortgageintroducer.com
none of us would have wished, this uptick in efficiency within firms of all sorts can and should be harnessed as the positive change that it is. Before the upheaval caused by coronavirus, economic productivity was fairly flat; economists speculated endlessly as to why our output per head was effectively falling in real terms. OUTPUT FALL
The productivity puzzle has not been solved by this dramatic shift in the way we work, and in fact many economists are predicting huge falls in output globally as the inevitable fallout from suspending so much of the economy. Nevertheless, this pandemic has at the very least shown us another way to improve efficiency and save money, at a time when all businesses are sorely in need of that. Working from home would not have been possible at the scale it is today even just 15 years ago. The progress made in digital communications, security and transactions in that time has been enormous – the effect of lockdown on an economy not able to power up remotely is virtually unthinkable. A corollary of lockdown and this transition to working from home has been the enormous and urgent impetus to develop technology and online solutions that support distance working, particularly for those as yet unused to it. The law is one sector that has, traditionally, been less willing to embrace the possibilities of what technology might offer. The need for wet signatures on contracts and other documents has remained stubbornly in place, for example, even as digital signatures became increasingly common and more secure. That reluctance to digitalise at scale has quickly disappeared, and it is largely down to the impetus created by our current public health challenge. This willingness to embrace technology and digital alternatives to
older methods provides a reason for optimism at a time when we are all feeling in need of it. DigitalMove is just one example of how a digital process can benefit all of those engaging with it. The system has now seen 10,000 housing transactions enacted through it.
“The progress made in digital communications, security and transactions in that time has been enormous – the effect of lockdown on an economy not able to power up remotely, is virtually unthinkable” Having crunched the data, we can reveal that on average, each case took 20% less time to complete than transactions not carried out through the DigitalMove system. Not only does that improve customer experience, it takes out a tangible cost for all firms involved. If time is indeed money, then having a fifth of your time back offers a significant commercial opportunity. At a time when all businesses, no matter how well capitalised, understand more clearly than ever that cash is king, it is clear that a 20% time reduction also offers a saving through cash flow that is 20% faster. It is delivering real value to the entire chain of users. Yes, consumers get a better home moving experience, but DigitalMove is also delivering better business to those firms using it in a very real way, by delivering cash to them more quickly. I sincerely hope that by the time this column is published we all have more clarity on the future and know when we can visit friends and family. In the meantime, I think it is safe to say that one thing for the future is already clear: how we work is forever going to be changed. Changed, I think, for the better. M I MAY 2020 MORTGAGE INTRODUCER
THE MONTH THAT WAS THE
Every month The Outlaw draws some tongue-in-cheek parallels between society at large and a mortgage market in flux
and weeping songster Sam Smith, unnecessarily obese folk in the UK who are stressing the NHS and ergo us all, and the daily 5pm woodentops on our TV screens who have treated us all with condescension without any showings of innovative thinking or an exit strategy (the worst of whom have been the robotic Dominic Raab and the faceless Alok Sharma, the alleged minister for business). Each of the above buffoons across the spheres of politics, sport and celebrity does, however, thankfully have role models to aspire to.
eriodically, I get a varied mailbag from readers (‘no sh*t, sherlock!’ you might well remark). No human excrement received yet, but some impassioned views! And whilst that includes rebukes from an army of snowflakes and wokes, middle aged communist Guardianista’s, and (still!) some Brexit sore-losers, I do genuinely respect any other person’s opinion. Even if (in the words one of my heroes, Brian Clough) we chat things through, and they agree I was right anyway! One such reader has suggested that this month I should abbreviate the usual rant, and give over most of this article to assessing the pandemic, the government’s performance in response to it, and specifically how our own industry is behaving... and with an overdue and surgical emphasis on the surveying fraternity. So, the following will get a one-month reprieve from the Outlaw for now, with this month’s grotesque morons in the bagging area comprising: The vulgar and completely unrelatable Beckhams, the disingenuous (and now halo-well-slipped) Richard Branson, LBG Commercial (for its utterly appalling role within the Coronavirus Business Interruption Loan Scheme (CBILS)), our lazy PM Boris Johnson (adroitly and tackily referring to his obesity as “buoyancy”), the equally indolent and out-of-touch Mesut Ozil, an utterly crisis-rudderless FCA, Andrew Bailey at the Bank of England (equally inept these past six weeks), the World Health Organisation (shamefully China-manipulated), the self -obsessed
Step forward for well-deserved honours: Captain (now Colonel) Tom Moore obviously, Angela Merkel, the Swedish population at large, Ricky Gervais (for calling out all the vain and faux-traumatised snowflakes such as Sam Smith), NatWest (excellent in its CBILS approach as well as its mortgage proposition), Jurgen Klopp and Jordan Henderson (Liverpool ‘s PR-saving duo after its wealthy owners ‘did a Victoria Beckham’ and furloughed staff), Keir Starmer (not a man I’d vote for, but one who has made a dignified and measured start in challenging this complacent government), Nicola Sturgeon (ditto the above), and all key workers, including delivery drivers, posties, dustbin men and warehouse and supermarket personnel. And breathe. More next month. Especially on a government effort which, even rightly allowing for hindsight and the fact that yes, we’ve ‘seen nothing like this before’, has been complacent and fudge-churning at every turn. It will face the music on this come autumn. Backsliding and default-positioning is now Whitehall’s primary activity. So, to our own industry and it’s COVID-19 report card thus far (marks out of 10).
Some highs and lows, as you’d expect. Well done to Chris Pearson and HSBC, the top pupil. Closely followed by NatWest, Santander and Coventry, which have all by and large tried to maintain their preCOVID grades. Barclays is slowly getting back to normal, but whilst the re-locating of more than 70,000 staff couldn’t have been easy, the bank has clearly lagged its peer group in too many disciplines. www.mortgageintroducer.com
Incidentally, this crisis for lenders bears no relation to their 2009 challenges. Most are now very well capitalised, and recent stress-tests revealed that they could now absorb as much as a 30% reduction in UK property prices. These tests also showed that they had £77bn of headroom to absorb business defaults, equivalent to 15% of the entire business debt book.
However, if the death-knell hadn’t sounded already for fees-free conveyancing deals from lenders, then coronavirus will now surely see that practice permanently quarantined.
I can’t speak for 10,000 advisers, but of the peer groups I’m familiar with, most have pretty much soldiered on regardless. They can and will work from anywhere, most have erudite customer relationship management (CRM) systems now, and anniversary dates on maturing products are helping many to at least maintain a 50% revenue level. Those who are professional and conscientious enough to provide mortgage protection advice might only be seeing a 33% reduction on their productivity.
Mortgage aggregators and clubs 8/10
These have been largely supportive. Possibly none more so than Martin Reynolds’ SimplyBiz, which was the first to issue a membership payment holiday. Given that SimplyBiz has shut its Huddersfield epicentre, this business-as-usual approach has been particularly exemplary.
Estate agents 8/10
Most estate agents are still actively trying to keep chains alive and don’t need a physical high street presence to achieve that. Many are running webinars for clients. We are all in their hands to some extent, as their skill in defeating any onset of ‘gazundering’ will now be pivotal in our collective recovery.
Before I get to the validation of that score and to some bold advice of my own, I’ll lay down my sword and try to give some balance, especially as I have some good friends running such firms. Clearly, none of us want surveyors placing their health at risk. Especially as this is arguably A) the most vulnerable group demographically in the homemoving and mortgage food chains and B) now the most pivotal group in unlocking over 400,000 paralysed transactions. The profession has long been stereotyped as the Compo, Clegg and Foggy of our world – the www.mortgageintroducer.com
Last of the summer wine: Surveyors may have been unfairly stereotyped
Last of The Summer Wine Brigade. But this is unfair. Many surveyors of my own acqaintance are in fact under 40 and hardly technophobes. Not every valuer refers to the legendary and convenient ‘Red Book’ at the first signs of a challenge. That said, there are some pertinent questions which do need to be asked, both of the surveying firms and their methodologies, and equally of the perceived lack of a more pressing collaboration with lenders and professional indemnity (PI) providers: 1. Why were so many surveyors furloughed at a time when desktop valuation work required them to be active? Were some furloughed with a different agenda, perhaps? 2. On the actual matter of desktops, why are the thresholds so unhelpful? There have been reports that straightforward remortgage and product transfer work at modest loan-to-value (LTV) levels is being refused a speedy desktop approach, even at sub50% levels! 3. Why have some firms still not yet ordered gloves and masks for their surveyors? These will surely be needed soon, and the delivery time could be weeks. This article is being penned on 1 May. Hopefully, by the time you read it, the Royal Institution of Chartered Surveyors (RICS) will have addressed these issues in their lobbying of that buffoon Robert Jenrick (more on him below). But the point is pretty clear. If the rest of the country is being implored back to work to save the economy, why are surveyors seemingly lagging behind and not applying any urgency or innovation? Much of the noise is around the perceived dangers of house visitations, but even this just doesn’t wash any more (pardon the hygiene pun!). By international comparisons, the UK’s surveyors are trailing their counterparts in America, Canada and Australia, where they are back at work and doing the following: Using video to quickly measure out room footage so as to keep their house visits brief. Having owners clean and disinfect properties before and after a visit. Reducing the house-to-house transmission risk by doing just three inspections a day at, say, 10am, 1pm and 4pm. Instructing owners to either stay in their garden or wait in their cars out front. I would add three more prescriptions to this pretty achievable playbook of measures: 1. Surveyors should not be attempting to value a property with half an eye on wider market values → MAY 2020 MORTGAGE INTRODUCER
THE MONTH THAT WAS right now. In most cases, the buyer and seller have agreed a price. Stop second-guessing whether the property might be worth 10% less in three-months time. All the other key agencies, such as banks lending to vulnerable companies, are doing so based on pre-lockdown valuations and conditions, not post-COVID-19, Armageddon scenarios. 2. Less is more. Surveyors are understandably known for exactitude, but right now the survey itself doesn’t need to be over-engineered. Get in, value simplistically for mortgage purposes, and get out. 3. Desktops. Please could lenders and surveyors start talking collaboratively with PI firms about a three-month relaxation of certain restrictions and protocols. These are exasperating times, calling for temporary flexibility around what are in some cases very anachronistic thresholds and limitations. Some of this may read harshly on the surveying profession. This piece may even become a gateway for a mailbag explosion! By way of redressing the balance with some respect for the job they do, this is a profession which I’ve always maintained is the most intelligent and articulate within the food chain. But right now, we don’t need intelligence. This is about assessing a moral hazard, and quickly. We need a sense of urgency, and of innovation. If surveyors are not viewed as being part of the solution, they are, unfairly or otherwise, being perceived as part of the problem. This is not the time for hesitancy or back-covering. The residential property market yields £8.4bn in stamp duty receipts a year. Ironically, the Treasury has also accumulated £15bn in exposure to the property market by in effect taking a 20% stake in the Help to Buy market. Of that, £6.5bn has been acquired in the last 24 months. Furthermore, the market has huge multiplier characteristics, from lawyers and estate agents to white goods suppliers, bathroom and kitchen fitters and removals firms. In summary, the ever-sensationalist Daily Mail has a damned case to answer here, as does Jenrick, as the incompetent (and twice lockdown-flouting!) Communities Minister who originally went on BBC’s Question Time to advocate for the closing of the property market. It was an opinion, not a government edict. But too many folk ran for the hills straight away. And now the government’s own over-cooked scaremongering regarding the pandemic’s potency means that large swathes of the population (in some of the more secure jobs or professions) actually don’t fancy getting back to work. Something has to give, and soon. Over to you, RICS. M I
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And the winners are...
t seems an eternity ago now, but one of our esteemed publisher’s last public acts before the lockdown came was acting as MI’s on-site photographer at the illustrious Mortgageforce Annual Lender Awards function at the Ned private members club back in late February, in association with Laurent Perriere. Our Robyn may have stumbled upon a fresh occupation to supplement his earnings once the pandemic passes, and who knows, he could be coming to a wedding or bar mitzvah near you once the social distancing is finally eased. Below is some of his very capable handiwork, featuring Mortgageforce MD Kevin Duffy awarding gongs to HSBC’S Chris Pearson and Santander’s Julie Waterman. Also in attendance as winners were NatWest’s Luke Christodoulides, OSB’s Emily Machin and Charles Durose of Clydesdale Bank. Mortgageforce head honcho Duffy remarked at the time: “Lockdown appears to be coming our way. “But all of these lenders are amongst those who are best equipped to deal with the unprecedented conditions now upon us. “We ourselves have a resourceful and efficient business model, so we’re confident that we’ll meet the challenge of COVID-19 head-on, and see it off. “Quality brokers with rock-solid client banks and a decent CRM system such as The Key will always win through.”
Kevin Duffy and Chris Pearson of HSBC
Kevin Duffy and Julie Waterman of Santander
WEâ€™RE MOVING UP IN THE WORLD
FRIDAY 25 SEPTEMBER 2020 | SUSHISAMBA | LONDON W W W. S F I AWA R D S . C O . U K
I N A S S O C I AT I O N W I T H
NORTHERN LIGHT John Truswell
n a career that spans nearly 40 years, the city of Newcastle has played a central role in John Truswell’s life, his career and his successes. Having graduated from Northumbria University in 1984 with a degree in Geography, Truswell began his career working for the Nationwide Building Society in Newcastle, and then in other branches in the North East on a graduate scheme. After that, he joined Bradford & Bingley in the Midlands in 1989, before going on to help set up a mortgage brokerage. In 1996, Truswell returned to Newcastle and joined Northern Rock as part of its intermediary sales management team. Following the 2008 crash, he became the head of national accounts at Virgin Money, before moving on to Capital Home Loans in 2016, and then to Together one year later, as its head of national accounts. Last year, he joined Newcastle Building Society as head of intermediary mortgages.
MORTGAGE INTRODUCER MAY 2020
As someone who has seen it all, is the industry in better shape now than when you first joined it? It’s fair to say I have seen the mortgage market change beyond recognition, but most of those changes have been necessary and welcome. The booms and busts of the housing market in the 1990s and 2008, and the reductions now in 2020, underline why developing a responsible and resilient lending industry has been so important. No single model is right, but all have to withstand and embrace hugely varied stresses and pressures, whether from global markets, policymakers, technology or society. Our role and responsibility is to help people satisfy a very human need: to have somewhere safe to live. Brokers play a significant part in delivering that experience to borrowers. They are an extension of our business and have evolved immeasurably as an industry too. www.mortgageintroducer.com
Mortgage Introducer catches up with John Truswell who, in September 2019, returned to the city of Newcastle to head up Newcastle Building Society’s intermediary lending team I am always impressed with how well brokers and the market generally adapt to the challenges they face. What attracted you to Newcastle Building Society, other than a return to a city that has been so important to you? What really impressed me from the outset, and what continues to do so, is that the society’s approach is totally customer-centric. I’ve always thought you should judge companies by what they do as much as what they say. We rightly have a reputation in the broker market for excellent service; that includes offering manual underwriting on all our cases and allowing brokers to talk directly to our underwriters. We have always tried to offer products that help real people. But the society’s desire to put customers first goes beyond what you might call the hygiene factors of value and service. Newcastle Building Society has an incredibly strong sense of community, and it genuinely ‘walks the talk’ of being a regional force for good. We are opening branches in our heartland in towns and areas where many others are pulling out – whether they be innovative uses of existing spaces, such as town libraries, or our own new premises. Authenticity is incredibly important in everything we do, and it’s really uplifting to work for an organisation that understands its responsibilities to both its locality and the broader community. The recent partnering with a local business to donate hand sanitizer to local communities tells you a lot about how important it is for the society to not only do the right thing, but actively commit to making a difference. Our Community Fund is a great example; it’s an initiative that makes grants available to charities and groups local to our branches that can make a real difference to the areas in which we’re based. Alongside this regional commitment is an incredibly powerful understanding that Newcastle Building Society www.mortgageintroducer.com
is part of a national financial services landscape. The society is totally committed to the bigger national picture through its mortgage lending. Investments in the team, products and service all underline this commitment, and the growth in mortgage lending over the last couple of years, and speak volumes about that commitment to getting it right. Of course nothing is perfect, but intermediary lending is at the heart of that growth and how we plan to move the society forward. By understanding our customers, we are able to try at all times to have a flexible, imaginative and pragmatic approach to borrowers’ circumstances. We have products for many markets over and above what you might call standard residential, including Help to Buy for purchase and remortgage, high loanto-value (LTV) lending, large loans, joint mortgage sole proprietor (JMSP), custom and self-build. (This last product is close to Truswell’s heart. He has lived by the coast in South West Wales with his wife since 1999, when they bought and renovated the old cottage they now live in.) It underlines my point that borrowers are never really the same, and brokers need broad product suites to help all their clients. The brokers that know us understand this; our challenge is making sure many more know what we can do to help them and their clients. What can the intermediary market expect in the future from Newcastle Building Society? I believe our current proposition is compelling, albeit not as widely known as I would like. Our broker offer is nuanced, so isn’t always easy to get across, and that is a challenge for us – not only for now, but also whilst we improve and evolve it. We really are a well-kept secret – a hidden gem that many more brokers and their clients should appreciate! But we know that markets do not stand still, and that what we have will only take us so far. We have plans to grow our current mortgage portfolio by developing new products for other markets. All our new products have to come with unique selling points, because we don’t have the scale to compete for any real length of time in vanilla markets with high street providers. Brokers should expect us to keep growing the current product areas we have, as well as adding others in the coming months. We will also maintain our reputation for helpfulness and transparency through service improvements that make a real difference to brokers and their clients. We will continue to grow our business development manager (BDM) team, which has already gone from two to six this last year, and have employed a national accounts manager to make sure everyone in the → MAY 2020 MORTGAGE INTRODUCER
COVER intermediary market, no matter what size of firm, understands the important nuances of our proposition. As our society evolves post the COVID-19 outbreak, brokers and their clients will need products and services that address the real world – not the old one where there were no such things as mortgage payment holidays, or periods of furlough and lower earnings. But these products will not often sell themselves on rate-driven sourcing systems and aggregators. This is why we need ‘boots on the ground’, both metaphorically and literally, to ensure that someone is talking to brokers about the value we can add. Everything we do needs to underline the point that we are serious about intermediary lending. Newcastle Building Society has always sought to help real people with real finances. That might mean they run their own business, or that they want to get on the housing ladder later in life. It could mean that they need a helping hand from the government’s Help to Buy scheme, or that they’re buying in a new development where homes are still being built. It could mean they’re newly self-employed and have just set up on their own. How do you expect to see the consequences of the lockdown become apparent in the intermediary mortgage market? The challenges we face as we emerge from this period will mean adopting a more innovative and flexible approach to product development and lending decisions. This will be essential to helping people stay in and acquire their own homes.
But even during this period it is vitally important that lenders provide support to brokers and their clients. Although the current crisis has largely closed the sale and repurchase market for now, interest in remortgaging continues to be largely unaffected, as borrowers search for competitive, cheaper deals on their existing mortgage and are taking advantage of historic low rates. Looking ahead, it is not unreasonable to assume that a flexible and nuanced approach to underwriting is going to be very important, as traditional approaches will not accommodate mortgage payment holidays, brief periods of unemployment, periods of reduced earnings, intermittent self-employment or changes in people’s employment status. The lack of liquidity available to some centralised lenders, many of which have already ceased lending, means that retail-funded businesses like ours should sensibly play a part in supporting the property market and the brokers, borrowers and aspiring homeowners within it. We’ve already seen our share of the buy-to-let (BTL) mortgage market grow as a result of many wholesale funded lenders withdrawing from the current market, but I think it’s incredibly important to support homeowners. We should not, as an industry, create another generation of mortgage prisoners who cannot be refinanced because we steadfastly refused to adapt to the ramifications of the outbreak. Mortgage payment holidays, periods of furlough, and lower earnings, to name a few, will all demand more nuanced approaches to product design, criteria and underwriting going forward.
Getting a new-build off the ground W
hen Daniel’s client approached him, a 57 year-old recently divorced woman who had just returned to the UK after a long period living abroad, he recognised that her case would need flexibility and understanding beyond that offered by the usual Help to Buy new-build lenders: She needed to purchase an ‘off-plan’, new-build, semi-detached home in a brand new development in Bradford; She had a lack of credit history; She had only one year’s worth of accounts for her current business; She required a term of 17 years, taking her age to 74 by the time the mortgage would be redeemed. Many lenders offer new-build solutions, but Daniel’s client had a suite of issues that had resulted in her being declined by traditional large players.
MORTGAGE INTRODUCER MAY 2020
Newcastle Building Society prides its intermediary proposition on its manual underwriting and common sense approach to difficult situations. A lead underwriter for the society delivered the original decision in principle. Upon receiving the application, it was clear that the client, a UK citizen, had been continually successful over the last decade in her field of work abroad, and that there was nothing to suggest she would be anything else here in the UK given her accounts, client base and line of work. Within 10 years of the start date, the society was comfortable that the repayment mortgage balance would be reduced enough to be easily covered by her current state and public sector pension provision. Her company net profits showed she had enough reliable business opportunities as
a sole trader to continue supporting any obligations she had to the society. The earnings and her income, taken alongside various savings, meant that with a clean property valuation the society was pleased to offer one of its self-employed Help to Buy products. Newcastle Building Society was, therefore, able to offer a product specifically developed for self-employed individuals. The final offer meant Daniel’s client could afford her three-bedroom home in a new Bradford development by taking a mortgage for £68,000, making full use of the Help to Buy scheme on the purchase price of £170,000. The application was submitted in late July and an offer arrived 13 working days later. Daniel’s client expects to move into her new home in October.
Walking the talk of 95% LTV lending I
n January of this year, a 39 year-old recently divorced man was introduced to Newcastle Building Society broker Clare by a local estate agent: He was renting in North London but, as a first time buyer, had no equity; He hoped to move out of London to a three-bedroom house in Buckinghamshire; He had an income of approximately £50,000 per year; His rent of more than £1,000 per month meant he had had to spend the last five years saving for a deposit. While a large number of lenders claim to offer 95% loan-to-value (LTV) lending, many in reality do not have a large appetite for it. Income multiples can therefore vary greatly as LTVs increase. However, Newcastle Building Society assesses all borrowers’ affordability the same way, and as a result is able to do
more to help in this market. The society contacted the broker as soon as possible to go through the case. We conducted the initial assessment on 10 January and were able to get the offer out on 14 January. Our standard criteria meant that, even though the client was only four months into the probationary period at a new job, Newcastle Building Society was able to take his previous experience in that industry into account, which was more than 12 months. The society was happy to lend at 95% LTV, and to do so over a period of 30 years. The client’s state pension and current pension contributions showed that over this long term he had the funds to continue to pay the minimal balance at the end of the mortgage. Because of our affordability assessment model, Newcastle Building Society was able
It’s likely the high street will not cater for these markets, but these are the cases where brokers will really add value by understanding which lenders can and will support them. You’ve spoken about the role of lenders postlockdown, but what should intermediaries be thinking about for a future mortgage market? At the moment, all brokers should be selling protection and insurances to clients, and looking to maintain that activity going forward, as events like these may not be one-offs. Equally, many current customers will need remortgage or product transfer advice. Product transfers might not always represent the best solution for a client. As we emerge, brokers will need more innovative product solutions and thinking from lenders to accommodate borrowers who need to remortgage but find that current products do not cater for the disruption to their finances caused by the crisis. They should not be shy of talking to lenders to get the support or find it from societies like us. Brokers will also face their own challenges as they deal with clients in a world where face-to-face meetings may well become more rare. Current clients will be incredibly important in the nearterm, as those relationships that have been established face-to-face will be critical in getting through this period of uncertainty. Looking forward, though, methods of winning new clients will need to change, as I don’t think a wholesale return to the old ways is likely. www.mortgageintroducer.com
to offer an additional £13,000 to the client than the next closest lender. This was, in real terms, the difference between getting the new home or continuing to live in North London paying a higher rent. The valuation was returned, and the offer issued within seven working days. The client exchanged in late January with a target completion date of mid-February. Newcastle Building Society was able to offer a 2-year fixed rate product, with no reservation or arrangement fee. These are important features for cashstrapped buyers. In addition, the client received £500 cashback to help with legal fees. The result is that, instead of paying over £1,000 per month for rented accommodation, the client will shortly be a new homeowner with a repayment mortgage of £912 per month.
More likely, this lockdown will encourage more borrowers to go online and do the initial research themselves. So, getting those face-to-face visits and explaining the value of the proposition will be more important than ever. Given the increasingly fragmented nature of people’s personal finances and circumstances, while technology may change the way we access advice, it will not be able to fully replace it. Only human expertise and experience can underpin the judgements we make and elicit the sort of insight that can only be gained from hearing someone’s tone of voice and asking the right comprehensive questions. It’s thanks to our brokers that we can understand what customers want and need from us. It’s not the cheapest rate available, the size of any cashback or free legal fees; it’s that healthy dose of practicality when it comes to finding a loan that suits them and their financial cirumstances. Understanding our proposition, where it fits and how it evolves, is crucial if we are to remain relevant to our brokers and take advantage of lending opportunities as they come. I have worked in banks, centralised lenders, regulated and unregulated businesses, but I cannot remember a more challenging time, nor one which presents so many possibilities. It’s important we do not get trapped in old ways of thinking and behaving, and I hope that we can shine a light on what is possible in the UK mortgage market. A little imagination and willingness to listen will show how we can help brokers and their clients, both now and in the future. M I MAY 2020 MORTGAGE INTRODUCER
Tackling the issues Loan Introducer catches up with Robert Sinclair, chief executive of the Association of Mortgage Intermediaries and Association of Finance Brokers, to get his take on the COVID–19 crisis and what it will mean for the second charge mortgage market How has the second charge mortgage market
coped with the COVID-19 crisis so far?
Clearly the issue with valuations has had an impact on the market, particularly for higher loan-to-value ratio (LTV) borrowing. As the market finds new ways to deliver valuations, we hope this will improve. Product availability is always difficult when financial markets are stressed, but there has never been a time when advice is more important. Helping consumers be well advised on the options open to them, by way of support as well as product availability, is at the heart of maintaining market credibility. What will the long-term impact of the crisis be? With any major economic and market dislocation, there is always the risk that firms may not survive the transition to the new normal. All previous downturns have seen a loss of firms and advice capacity. It is too early to tell how significant that loss might be on this occasion; however, government is intervening in a way never seen before to help both individuals and firms survive the near-term impacts of COVID-19. The need for a vibrant and effective mortgage and housing market is at the heart of any effective forward-looking UK economy. Will the crisis be more harmful than the 2008 credit crunch? This is a very different circumstance. There, we had significant capital and, more importantly, liquidity issues that were long lasting. We had a very long restructuring phase that took years. I do not think
MORTGAGE INTRODUCER MAY 2020
AMI update How has COVID-19 impacted AMI? AMI moved to home working before lockdown in order to ensure that all the team were kept as safe as possible. We already had technology that enabled us to work flexibly, but we have been using Teams to talk daily and Zoom to connect regularly with our board and other working groups. So, it has been business as usual, without the face-to-face activity with regulators that we usually have. We have been issuing help and guidance to firms at an unprecedented level. What are your membersâ€™ main concerns? Members main concerns are about keeping the property market going and ensuring that it is a priority for government. We want to ensure that lenders evolve out of crisis management towards working in partnership with the intermediary market to deliver the best solutions. Are you worried about your membership numbers? We have seen very few firms suspend membership so far. Those that have furloughed members of staff have cancelled with a commitment to return in better times, recognising that we are still fighting their corner. We are working to lobby on issues that matter most to firms so their voice is heard.
that governments can let this re-alignment take anywhere near as long. However, the natural fears of people perhaps not wanting to return to work remains a major issue that we need to factor into thinking. Are the challenges the second charge market faces diďŹ€erent to the ďŹ rst charge market? The regulator is hardening its view that this is a unified regulated mortgage market, and there are negligible differences between how customers should be treated. Margins in the first charge market continue to be exceptionally narrow, therefore the second charge market with better margins could be attractive to investors. The main issue will be around what happens to property values, and a much more difficult area to asses will be unemployment. What is your advice for second charge mortgage brokers? Know your lenders, products and be adaptable. Listen to customers and be aware of all the solutions that might be out there, not just seconds. If you cannot help, refer to someone who can and take a share of any income. Operating on what is happening now rather than waiting for a different future is essential. M I www.mortgageintroducer.com
Adapt and s Natalie Thomas asks how second charge businesses have adapted to the
rom rate changes to lenders pulling products altogether, the last month or so has been a whirlwind for the finance industry, and the second charge mortgage market is no exception. Brokers and lenders have all had to think on their feet at times, often making difficult and significant business decisions under highly stressful circumstances. So, Loan Introducer asks: “How has your business adapted to the coronavirus crisis?”
Rob Barnard director of intermediaries, Masthaven Masthaven has made a smooth transition to remote working in response to the COVID-19 crisis. All Masthaven colleagues have been set up with the devices they need to work from home, and we are making good use of digital platforms to stay connected. We are using automated valuation models (AVMs) and drive-by valuations to replace physical valuations for as many of our products as we can. On the customer service side, we have created an online application for mortgage payment holidays and increased the number of team members taking customer calls. Masthaven remains open for business in the second charge market. We are continuing to work with our intermediary partners to ensure our second charge customers can access the finance they need. We are constantly assessing how the market is changing. At the time of writing, Masthaven has made just one set of product changes and our second charge rates have remained the same. This is a very challenging period in which to be operating, and we know that there is some way to go yet. Nevertheless, we remain committed to our customers and our intermediaries, and will do everything we can to continue to support them.
Jeﬀrey List director, Specialist Money Like most, if not all brokers, we quickly moved to close the office and allow for social distancing, with the team working remotely from their homes. When setting up our systems and deciding on which technology partners we would adopt, we had factored the need for the team to be able to work remotely and securely. The move to working from home hasn’t had a huge impact on the way we work, other than the fact that the team are not immediately available to bounce ideas off one another, although the use of Zoom and other apps has definitely helped. Seeing lenders remove products and change criteria has of course had an impact on both new and pipeline business; however, as a business we completely understand why these measures must be taken. The good news is that we are slowly seeing the number of restrictions being relaxed; the key for the team has been to manage client expectation and to keep all involved parties up to date as situations change.
a section of our staff, whilst being mindful of maintaining service levels in the various teams across the business. Since our initial furlough, we have subsequently brought back some members of the team, as we have experienced more enquiries and cases than anticipated. At this point, we are working hard to support both brokers and their clients in what is a particularly tricky specialist lending landscape. This necessitates more calls with lenders on their criteria and appetite to lend, and more understanding of changes across the legal and valuation environment. Most importantly, we need to ensure good communication with all. We are helping brokers, and we are closing loans. Over the next few weeks, the lending landscape will no doubt change again. We have tentatively begun planning for a new way of working, which will no doubt include social distancing for the foreseeable future. It’s incredibly important for us to remain flexible in the face of change. As they say, everything changes but everything stays the same. We will continue to adapt while making sure we provide brokers with the best specialist loan outcomes available for their clients.
Buster Tolfree Anna Bennett marketing director, Positive Lending Like the rest of the finance market, Positive had to react and adapt quickly in response to COVID-19. The first steps we took were to protect our staff, and this meant enabling them to work effectively from their homes. Luckily, many of our systems were cloudbased and tested through our Disaster Recovery Plan. At the onset, with business levels predicted to decrease, we took the decision to furlough
commercial director – mortgages, United Trust Bank United Trust Bank (UTB) has had to adapt like most businesses as a result of COVID-19. Around 90% of the bank’s staff are working remotely on any given working day, and we are continuing to lend across all divisions. From my own perspective on the changes within the mortgages and bridging division, there are a few which have been extremely significant. For example, we have www.mortgageintroducer.com
ongoing coronavirus crisis expanded the use of the UTB Nivo App to include security checks alongside the Biometric ID that we launched at the back end of 2019. Being able to use our secure chat app to exchange information with brokers and customers has been very valuable, and the mortgage journey is now entirely paperless. Increased use of automated valuation models (AVMs) has enabled us to progress and complete cases when physical inspections are unavailable or don’t suit the customer’s timescale. One recent bridging case progressed from Decision In Principle to completion in six working days, and that wouldn’t have been possible without the introduction of the Fintech the bank is now using all the time. Social distancing has of course driven us to adapt the level and style of interaction we’re having with our introducers. I am very mindful of the huge change in the lender and product landscape, and we have worked very hard on keeping our communication transparent and regular. Our sales and underwriting team are using Zoom like it’s going out of fashion, but the feedback we’re getting from our broker partners has been extremely positive, so we must be doing something right.
Alistair Ewing owner, The Lending Channel
I think we have adapted well to the home working environment – but that’s not the same as enjoying it. We have taken advantage of as much government help as is available, including furloughing two-thirds of my team. With one person manning the office and everyone else working from home, we do have all the technology we need, but while we can function very well, it’s just not the same as www.mortgageintroducer.com
having the whole team in one office. Business levels have dropped considerably, and with the various restrictions in place just now, it has become much more difficult to place many clients. This is due to a variety of factors: mortgage payment holidays, furloughed clients, lack of physical valuations causing issues at higher loan-to-value ratios (LTVs), and lenders exiting the market. But we are still getting lending offers out and deals are still being funded, so we must thank the banks that have adapted and remained in play.
Paul McGerrigan chief executive officer, Loan.co.uk
Our capability to service our clients is exactly the same as it was before lockdown. Once lockdown appeared likely we mobilised, and our teams were working from home a week before the restrictions were imposed. On The Money’s platform Signature allowed for us to do this. It’s cloud-based and has a number of features, such as a fully built-in telephone system, full online fact find, a fully automated decision engine linked to the credit reference agencies and land registry, auto-document production, a compliance module, finance module, workflow management system, email and SMS system. Essentially, it runs the business for us. Because it is set up to service mortgages, seconds, bridging and unsecured lending, there is no impact on the products we are able to service. Also, as it is structured in a hierarchical fashion, our advisers can only see their own cases, managers can see all their teams’ cases and senior managers can see the whole business, as can our compliance team. The finance and compliance teams can access all of the information they need
“We are still getting lending offers out and deals are still being funded, so we must thank the banks that have adapted and remained in play” Alistair Ewing
to manage the business compliantly and commercially from home, so everyone can work as normal. Alongside Signature we use Teams to communicate via instant messaging, as well as calls and video calls to keep everyone in touch and feeling part of the team. Our active advisers are diligently working from home providing our brokers and their clients with the same excellent service.
Gavin Seaholme head of sales at Shawbrook Bank
We moved into a remote environment practically overnight, with access to all relevant systems, platforms and communications tools. Given Shawbrook’s size, this is really quite something. As far as problems go we’ve had relatively few, and consequently our brokers have felt no real adverse effects in terms of the process of dealing with Shawbrook. Clearly, there have been some challenges outside of our control that have had an impact, such as those presented by the inability to carry out physical valuation inspections, but we have successfully worked with our brokers to find quick and sensible solutions to get us through the short-term. M I MAY 2020 MORTGAGE INTRODUCER
Looking at the long- t Natalie Thomas looks beyond the COVID-19 crisis and asks what impact it will have on the seconds market
t is hard to believe that just a few months ago the second charge industry was celebrating the best 12 months it had experienced since 2008. No sooner had the Finance & Leasing Association (FLA) released its figures for 2019 than disaster struck. Like the rest of the world, the sector has been catapulted into chaos due to the COVID-19 pandemic. Almost overnight and with little warning, firms have come to face the overwhelming task of having to furlough staff and implement emergency measures to ensure not only the survival of their businesses, but of staff members also. Just when the sector seemed to be coming into its own, no one could have foreseen the events of the last few months, or indeed guarded against them. So, what impact will the pandemic have on the long-term health of the market? ENTERING THE UNKNOWN Unlike previous downturns, there is nothing to compare or judge the current crisis against. No number of economic forecasts or indices can accurately predict how long this downturn will last or how hard it will be, because the market has never known anything like it. Buster Tolfree, commercial director of mortgages at United Trust Bank (UTB), says: “The impacts are likely to be significant and longstanding for the financial services industry, the economy, the property market and society as a whole. “I suspect that we are yet to fully understand these impacts given we’re only a month into the lockdown and there’s no one on the planet with prior experience of this scale or seriousness of a pandemic and the resulting economic disruption it is causing. “In terms of second charges specifically, we have already seen non-retail bank lenders effectively exit the market and many brokers place staff on furlough. “The recovery time should hopefully be quicker than the credit crunch in 2008, but it will not be overnight.” As Tolfree highlights, one of the main problems the second charge market faces is the nature of some of the main lending institutions. Alistair Ewing, managing director of The Lending Channel, says: “While the banks are much better capitalised and regulated now than they ever were
before, many second charge lenders don’t have the luxury of being balance sheet lenders. “A number of these lenders have to depend on the wholesale funded markets and it is already proving difficult for some to access capital, hence they have temporarily withdrawn from new business.” According to Paul McGerrigan, chief executive officer at Loan.co.uk, even those lenders which have supported the second charge mortgage industry for decades have had no option but to close their doors to new business. “Other lenders have found controlled and responsible ways to reduce their lending volumes, but are offering a vastly reduced range of options,” he says. “It’s an important time for the industry to pull together and get through.” The FLA is calling on the government and the Bank of England to take urgent action to support the non-bank lending market. Non-bank lenders rely heavily on the capital markets and bank funding, but these have essentially been closed to them, says the trade body. As well as the lack of funding, lenders are also having to tackle the huge cashflow drain from forbearance measures. “It has certainly been a challenging time for lenders,” says Fiona Hoyle, head of consumer and mortgage finance at the FLA. “Forbearance requests across all of our markets were very high in mid-March, but had levelled off by the end of that month as lenders quickly responded with measures to help their customers. “However, we anticipate more customers may be seeking assistance over the next few weeks as their circumstances change. “Our priority at this point is making the case to government that non-bank lenders are an important part of the financial services landscape and should have the access to funding that will allow them to continue to provide forbearance, but also to continue lending to help the UK’s economic recovery.” STILL OPEN FOR BUSINESS Once the market does start to recover, there is a strong likelihood that demand for second charges and other forms of finance will increase, given the www.mortgageintroducer.com
- term financial strain the COVID-19 crisis will put on many borrowers’ finances. “There are still plenty of people looking to borrow money,” says McGerrigan. “The current situation has given lots of people more time to look at their finances and more time to consider their options. “For others, there has been a stark realisation that they are servicing too much unsecured debt that they are never going to be in a position to pay back. “And then there are peoples’ homes – having now been forced to spend more time in them, everyone has realised there is lots of work that needs done.” Gavin Seaholme, head of sales at Shawbrook Bank, is already seeing a greater demand for debt consolidation, as people look to reduce outgoings and make monthly payments more manageable. “The seconds space will perhaps be one that will feel a bounce more than other markets in the coming months as borrowers’ circumstances change,” he says. However, what looked like a good candidate for a second charge mortgage at the beginning of the year understandably might not now, given the uncertainty over many borrowers’ jobs. “Lenders are trying to assess borrowers’ creditworthiness with unknowns they have not experienced before,” McGerrigan warns. Anna Bennett, marketing director at Positive Lending, says lenders are understandably more cautious than before the outbreak. “Currently, we are arranging loans for borrowers up to 80% [loan-to-value (LTV)], while some lenders are offering automated valuation models [AVMs] up to 70% LTV,” she says. “There is less product choice, but loans are being arranged; typically for debt consolidation, home improvements, gifted deposits, buy-to-let purchase and the payment of tax bills.” Even though a number of lenders have withdrawn, the market is still open for business. “The good news is that lenders have continued to fund during the pandemic, albeit at greatly reduced levels,” says Jeffrey List, director of Specialist Money. “I believe it will take at least six to 12 months before we see any form of normality resumed. While business volume may be down for some time, in the main this will be due to the way lenders access funds and the fact that it will take a while for product criteria restrictions to be lifted.” The market could also be hindered by falling house prices – something which could impact how much clients can borrow. Indeed, Savills projects that house prices could fall between 5% and 10% in the short-term. www.mortgageintroducer.com
“We will definitely need to keep an eye on property values and how this could impact the levels to which clients are looking to borrow,” says List. A NEW NORMAL So what will ‘business as usual’ look like when the market does return to some kind of normality? “My best guess is that it will be next year before origination volumes get back to pre-COVID-19 levels, and it’s likely there will be some firms which exit the sector entirely or change their models significantly upon re-entry,” says Tolfree. “UTB’s investment in technology, our incredibly resilient staff and our desire to keep serving our broker partners will see us through this crisis and come out even stronger on the other side,” he adds. Indeed, aside from funding, investment in technology may well prove to be the make or break factor for many firms. Technology has been the key to survival for many during the crisis, allowing them to continue trading. There can now surely be no argument as to the vital role it can play in aiding firms. With so many staff working from home, some companies may also start to question the merits of having a large workforce filling up expensive office space when they can evidently work effectively on a remote basis. For others, the switch to home working will have highlighted any gaps or flaws they may have in their online or technical capabilities, forcing them to revaluate their strategy. ON A STRONG FOOTING The COVID-19 crisis is still unfolding, and the full repercussions may not be evident for some time. There will no doubt be some hard and heartbreaking decisions for firms to make in the coming months. As the market enters into these uncertain times, however, it does so on a strong footing. The sector showed its resilience during the 2008 credit crisis, and has built itself into a robust regulated entity. Business volumes were confidently growing just a few months ago, and there is no reason to think this cannot happen again in the not too distant future. While the crisis has highlighted the importance of technology, it has also brought to the forefront the need for human contact and personal advice. Over the coming months, clients will be looking for reassurance, a friendly adviser at the end of a telephone line, and someone to help with their financial concerns. Advice and advisers are needed now more than ever – as are flexible finance solutions. Although a cloud of uncertainty might currently hover over the specialist lending space, demand for second charges will remain, if not increase, and the sector will prosper once more. M I MAY 2020
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SPECIALIST FINANCE INTRODUCER INTERVIEW
Stargazing in the market Sam Howard managing director, Magnet Capital
s I sit working from home with the news on a constant loop, the picture is forming of a dystopian world where from a corporate perspective there will be few thrivers, aside for big tech, and the rest will compete to emerge as survivors. Undoubtedly, the world is facing a crisis like we have not seen for probably 100 years, and the impact on people’s lives has and will continue to be unprecedented in the short-term. Reports suggest there will be a wave of soured UK commercial property loans, owing to the slump in retail property. From the development finance perspective, restrictions on movement, closure of building suppliers, and the effective shut down of the residential property market for sales and rental has and will lead to serious delays. With regards to residential property, I believe this is overly bleak; once a vaccine and suitable drugs have been discovered, the UK’s passion for property will return. However, whilst running a development business from my home office, in between Zoom calls and reviewing drone footage and photographs of our sites, I wanted to take the time do a bit of stargazing to see what changes, for the better or worse, might affect our industry. Clearly I have no crystal ball, but just a deep interest in the development finance industry. An argument that is raging at the moment is whether COVID-19 will lead to a rise of nationalism over and above globalism. Given that the UK imports significant amounts of its building materials, with one-fifth coming from China, should the country be focusing www.mortgageintroducer.com
on ramping up domestic production? Whether it is electrical wiring, softwood timber, or clay tiles, there is an argument that the UK should aim to be fully self-sufficient. My guess is that there will be a significant move to on-shoring capabilities where possible, although of course some countries are better endowed with natural resources than others and we will still import where there is little alternative. We are all starting to use technology more in our day-to-day roles, whether that is valuation software, drones for building inspections, or Zoom sign-up meetings. Therefore, we are shifting in the belief that development finance underwriting can’t be automated and that borrowers need to be met in person and the sites visited. With regards to the surveying profession, whilst physical valuations will still be necessary for the majority of development schemes, we will see a degree of change, with more virtual monitoring inspections taking place. However, this is likely owing to the rise of modular housing that will reduce the need for so many physical monitoring inspections, rather than due to COVID-19. From a lender’s perspective, no matter how much a system can be automated, you still need a human to make decisions and review the due diligence that the computer programmes produce. Face-to-face sign-up meetings with borrowers are still crucial to assessing the risk of a development project.
The outlook is changing
Yes, you are also looking at the valuation information, the site details, cashflow, business plans etc, but ultimately you are backing an individual or individuals. At Magnet Capital, we will be reinstating this, of course adhering to social distancing rules, as soon we can. So, don’t get rid of those meeting rooms just yet. Which leads me on to the question of working from home, one that the industry has struggled with for years. The mantra of management has always been that you need employees in the same physical space to create the optimal working environment. The reality is that with modern technology it is possible to work efficiently and productively without being in close physical proximity. Using Slack, Zoom, Dropbox, Xero, alongside a business’s existing databases, the ability to work remotely is if not seamless, then close to it. Avoiding the daily commute, not being crammed into a hot-desk environment with little natural light, and having the ability to work flexibly is attractive. Now, I am not suggesting that office space is no longer needed, but I think there will be a realisation that big expensive offices might need another look. It is, of course, about having the right systems in place and yes, it is easier with a small team such as Magnet Capital’s who have all worked together for many years, rather than a giant multinational. Nevertheless, the modern office will be reshaped, perhaps with meeting rooms and desks for those who need to be in, rather than paying for a space for hundreds of people. And just a thought – perhaps from a residential development finance perspective, there might be an opportunity for developers to turn the unused office space into flats. It would mean borrowing a well worn but largely derided phrase in the financial markets to say that ‘this time is different’, but I think in some ways it possibly could be. M I MAY 2020
SPECIALIST FINANCE INTRODUCER
Talk today for a lifetime customer Shaun Almond managing director, HL Partnership
ittle did I know, when I talked last month about the importance of customer contact, that advice on protecting families would take on such importance now the consequences of illness are a stark reality. Proper advice, rather than plain mortgage broking, has become even more important. To separate themselves from the ‘order takers’, mortgage advisers have a duty of care to be in touch with customers. To this end, we actively encourage our members to be in contact, or at the very least communicate by email or another method.
Whatever their circumstances, customers need to know their options. Whether they face furloughing and a temporarily reduced income, or are self-employed and falling through the cracks of government assistance, a supportive conversation can help, and a call today might create a customer for life. Our first concern was the phrase ‘payment holiday’ and what borrowers would interpret it to mean. A holiday suggests time off, but in reality, interest still accrues on the whole mortgage balance, including payments that were not made. It does not mean that payments and interest are waived. At times like these, customers need to know the facts. Who better than advisers to talk to them about what would work best for them? This might mean reducing payments or moving to interest only for a period, rather than
full deferment, or at least waiting until the latter is really necessary. The second concern in the payment holiday scenario is if misinterpretation leads to a stopped direct debit and damage to borrowers’ credit scores. For those who apply formally to lenders, the understanding is that credit scores will be unaffected. But what about for those that didn’t need a holiday, but took one anyway? If we consider them to be ‘our’ customers, we need to be on the phone to them now. If we don’t and are just passing the buck to lenders, we can’t then be surprised if the dust settles and they look elsewhere for guidance. Ultimately, the job is about advice. Just because every call isn’t about arranging a mortgage doesn’t mean you aren’t working. Being proactive at a time of crisis will demonstrate the true value of advice and advisers. M I
It’s not all doom and gloom... Brian Rubins executive chairman, Alternative Bridging
his has been the warmest, driest April in decades, without football there’s no nail-biting for the Cup Final, and when did you last wear a suit? I could go on. There’s another positive to the pandemic: it has generated unprecedented change for borrowers, brokers and lenders, not just in how we work, but how we think. We are now holding client, broker and office meetings by Zoom and Teams, and moving to fewer emails and more phonecalls. As a result, applications are being interpreted more accurately, misunderstandings avoided and relationships strengthened.
Lenders with strong funding are, more than ever, reviewing proposals started with others no longer able to offer funds. This is creating new relationships for both borrowers and brokers which, handled correctly, can blossom in the years ahead. Let’s admit it, valuations are a headache! Some small loans will be satisfied by automated valuation models (AVMs), perhaps alongside a drive-by or internal video, but this won’t work for larger loans needing a Red Book report. However, this has also driven change; many applications are supported by an acceptable valuation carried out for another lender, and so more lenders are prepared to have reports readdressed. Lenders are facing some new and uncomfortable challenges, in particular the need to grant interest holidays. Borrowers must understand that
holidays end, and plan to repay the unpaid interest while current interest is serviced on time. It is probable this will need time, so it is better to agree a payment plan which can be achieved. There is also the need to take a grown-up approach to expiring loans. Sales are now either impossible or at best delayed, and the same applies to refinance. An extension of three or even six months may be needed. For wellestablished and experienced lenders this is challenging, but familiar; for newcomers, it is a wake-up call. Out of adversity, there is always something to learn. For brokers, it’s to introduce clients to lenders which are there for the long-term and can be flexible. For borrowers, to stay in close contact with their lender and broker, and to address problems before they occur. It is not all gloom and doom, just a new and better way of working. M I www.mortgageintroducer.com
SPECIALIST FINANCE INTRODUCER INTERVIEW
Suspend house price indices Rob Jupp CEO, The Brightstar Group
ou may have seen that, last month, Brightstar kicked off a campaign for the immediate and indefinite suspension of all house price indices. It’s a big ask, so what was our rationale, and why do we believe that this is such an important cause? On the day the campaign launched, City AM ran a story with the headline: It’s official: Coronavirus killed UK house prices’ Brexit recovery. House price indices will always create headlines, and these will rarely take a measured approach. This is something that we have come to expect, and is fine when the data is a fair reflection of the market,
but we find ourselves in a completely unprecedented situation where the government has, quite rightly, paused nearly all economic activity. This has imposed an artificial halt on the housing market, and transaction levels have plummeted. A report by Zoopla said that newly agreed property sales fell by 70% in the first two weeks of lockdown, which is to be expected as people are unable to view properties. or surveyors carry out physical valuations. This dynamic was recognised by Rightmove, which suspended its house price report saying that, “given the lockdown and pausing of key activities in the housing market, statistics on the number of properties coming to market, new seller asking prices, and new sales agreed are not meaningful.” Analysis by Savills added that “in the coming months, low market activity is likely to make it relatively difficult to
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establish what has happened to prices, meaning this is only likely to become clear as we come out of the lockdown and transaction levels start to pick up.” It seems unhelpful and potentially harmful, then, to continue to measure the health of the market using traditional methods. The data simply cannot provide any type of meaningful house price index during this period. Continuing to publish house price indices based on limited data will lead to sensationalist headlines and create panic, which could impede the return of the market when lockdown lifts. It may also result in knee-jerk policy decisions with a lasting and negative impact on the market. For the time being, while low transaction volumes make meaningful data unavailable, the most appropriate solution, seems to be to put publication of price data on hold. M I
SPECIALIST FINANCE INTRODUCER
Better together Adam Tyler executive chairman, FIBA
eek five of the lockdown, as I write this, and stories of positive action have become more important to us than much of the news coverage. As we try and move forward, and see the difficult decisions that have to be made by a government facing a crisis the likes of which no one has seen in living memory, I prefer to look at the extraordinary efforts being made not only individually (thank you, Captain Tom!) but also by government in helping individuals and businesses with unprecedented financial support. ASSISTANCE PACKAGE
A lifeline for businesses is crucial at times like this, and I am delighted that here at FIBA, in partnership with SimplyBiz Group, we have been able to offer a comprehensive assistance package to equip our members with tools that will help them during these difficult times. We are all having to adapt. Just as we have adjusted to the confines caused by the lockdown, our businesses and the way we run them have either got to be packed away until everything normalises, or we must look at ways to maintain a presence so we stay well positioned for the upturn when it finally comes. While I am a great believer in maintaining independence as an adviser, there are times when being part of a bigger organisation makes a lot of sense. This is one of them. Being part of a trade body such as FIBA, particularly one that is not just a political talking shop, provides members with many extra benefits that non-members are unable to access without losing independence. Leaving aside the curated lender panel, compliance support, professional
MORTGAGE INTRODUCER MAY 2020
indemnity (PI) block policy and representation at the highest level to government and regulators, FIBA, as part of SimplyBiz Group, is able to provide additional support to members via a package designed to help in four key areas: cash flow management, client communication, financial support signposting for clients and mental wellbeing support. CHANGING TIMES
As we emerge into a different landscape, the relationship between customer, broker and lender will inevitably change. We all need to adjust to a new way of working and, more importantly, continue to write business through these changing and challenging times. In order to do that, we need to call on all the help we can get. Being a trade body member will give you access to help at a time when you need it the most.
A lifeline for businesses is crucial
or many, like myself, who were brought up in a pre-digital age, comfortable with paper application forms and a reliance on Royal Mail and the fax machine (does anybody still have a fax machine in the office?), technology and its adoption in our businesses was something we would eventually get round to, but old habits die hard. Yet, in my own business over the last 10 years, I have become evangelical about moving online. Clients simply expect it and everyone has now been opened up to the advantages of running their businesses more efficiently. More and more of our lender partners, particularly the newer ones, are set up to work online. So, it is not just a luxury, it is becoming a necessity for advisers to accept the need to change by updating and upskilling to take advantage. Some lenders have had to make a huge effort to move their businesses online so
that employees can work remotely. This is a good moment to reconsider how your clients would be better suited in the future, as more lenders accept a fully online process is the way forward, with the added benefit that their teams are able to work just as easily from a home address as they are in an office. There are no easy routes out of this current crisis, but no matter what our political affiliation, most of us would agree that the choices facing the government over how and when to lift the lockdown are fraught with consequences that we cannot measure. While lockdown is proving to be successful in helping the NHS to build its resources and cope with the current influx of COVID-19 sufferers, it has to be weighed against the damage to the economy if it goes on too long. All of us want to get back to work as soon as possible, but at what cost in respect of lives lost? The ultimate Catch 22. MI
COUNTRY IN CRISIS
From the frontline
Iquam nocum amqua pripimpl. Deconsit; ia moveheb atius, escritam nonsu conderf ercesenis vit, qui pro vividem ovehenatam a publii The stories impacting the industry during the coronavirus crisis
Charity poker game launched to support NHS
rilliant Solutions, the mortgage club and specialist mortgage distributor, has launched a fundraiser for the NHS that is open to anybody that owns a mobile phone and is connected to the mortgage industry. The team at Brilliant Solutions has prepared an online poker tournament that requires no gambling account, no money to be bet or be gambled in any way and runs on a smartphone. The tournament is purely for the honour of winning a trophy as well as for industry pride and donations are welcomed through the company’s Just Giving site that has been set up in aid of NHS Charities Together. Matthew Arena, managing director of Brilliant Solutions, said: “By asking for donations we hope to raise a significant sum for the NHS whilst providing an alternative form of entertainment for those streaming TV every evening. “Thanks to this setup it allows any players of any experience or ability to play, from beginners to experts, it will be great fun for all players.” You can donate by visiting the Just Giving Donation Page – www.justgiving.com/fundraising/brilliantnhs. If you want to take part email Michael Craig (Michael@BrilliantSolutions.co.uk).
Newbury Building Society supports charity partners
ewbury Building Society has donated a combined total of £30,000 to support its charity partners during the COVID-19 pandemic. The charities receiving support from the building society include Helen & Douglas House, Alton Food Bank, St Michael’s Hospice, Prior’s Court Foundation, Newbury Cancer Care, Friends of PICU, Sue Ryder Wokingham and Alzheimer’s Society. Newbury Building Society brought forward its annual donation to each charity, usually made at the end of the calendar year, as an emergency provision to support their work and services during the crisis.
MORTGAGE INTRODUCER MAY 2020
AXA UK makes £1m COVID-19 donation
ver the AXA UK is donating £1m to Business in the Community (BITC) as part of its response to the coronavirus epidemic and support for the charity’s recently formed National Business Response Network. The donation marks the start of a partnership between the insurer and Business in the Community, with AXA joining Business in the Community’s Board of Trustees and becoming a founding partner of The National Business Response Network. Organised as a response to the COVID-19 crisis, the National Business Response Network connects national and local community groups, businesses, local authorities and charities with businesses who can offer support. Amanda Mackenzie OBE, chief executive of Business in the Community, said : “Put simply, this support will save lives and provide a springboard to help our communities bounce back and recover as fast as possible.” www.mortgageintroducer.com
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