View more on these topics

&#39New loan networks facing a cash crisis&#39

Mortgage networks looking to grow quickly and sell on their businesses to IFAs after depolarisation could face serious financial problems, warn leading industry experts.

Mortgage Intelligence managing director Sally Laker fears that new mortgage networks pulling in members with low membership fees are not looking carefully enough at their long-term costs.

She says she is concerned that a number of new mortgage propositions hoping to sell up quickly following the onset of regulation could find themselves shunned by IFA groups.

Laker&#39s concerns were raised after Money Marketing revealed that Customs and Excise has already ruled in individual cases that IFA networks should pay VAT on member charges. This ruling could be applied to mortgage operations.

Leading brokers say brokers could face escalating membership fees if their group has not put enough money aside to cover unforeseen problems in two, three or five years.

Laker says: “There are some that are gearing up to sell their businesses on but the success of this will surely depend on how long they have been trading and their potential liabilities. From my point of view, it would difficult to quantify exactly what you would be buying.”

Inter-Alliance mortgage development director Stuart Wilson says: “These concerns are well founded. The VAT issue is yet another problem in addition to regulation costs that some new networks have not considered carefully enough or looked at in the long term.”

Pink Home Loans managing director Paul Jones says: “I think some of the pricing is extremely fine and does not leave much margin. If they get landed with a big VAT bill, it is quite likely that their charges will have to increase. We have done our own cost modelling but my guess is that a number of the start-ups will not have discussed this.”

•Mortgage Edge, p37


Skipton launches new mortgage range

Skipton Building Society has launched a new range of mortgages which includes a flexible three year fixed rate mortgage at 5.69 per cent, a flexible three year capped rate mortgage at an initial rate of 4.99 per cent (capped at 5.75%) and a flexible base rate tracker at an initial rate of 4.50 per cent. […]

Only 27,000 Irish stakeholder sales in first year

Only 27,000 of Ireland&#39s stakeholder-style pensions have been sold in the product&#39s first year even though it allows a 5 per cent bid/offer spread plus a 1 per cent annual charge. Irish consumers are spurning the state-sponsored Personal Retirement Savings Account even though its charging structure is what many life offices see as the solution […]

West Brom shortfall deal on BTL

West Brom has added a feature to its buy-to-let products which allows surplus disposable income to be used where there are rental shortfalls. Typically the lender will only approve buy-to-let mortgages where the rental is 130 per cent of the mortgage repayment. Now landlords are being offered a mortgage which covers 100 per cent of […]

Lighthouse targets company pensions

Aim-listed IFA Lighthouse Group is targeting the company pensions and benefits market with a new division called Lighthouse Corporate Benefits. 50 of the firms best qualified pensions advisers will work in the operation.

Guide cover

Guide: how to… communicate with your pension members

Effective communication of your pension scheme is a large part of getting auto-enrolment right. Delivering the same message to all employees is not necessarily the way to go. To assist you with the communication of your pension scheme, we have provided some key areas to think about, such as:

  • What to consider when segmenting your workforce
  • How to communicate to pension scheme members at the right time in their member lifecycle
  • What topics you should be discussing with your pension members
  • The new pension freedoms and the importance of communicating them


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm