View more on these topics

Carry on cabby

Last week’s bank rate reduction and the onset of quantitative easing will increase conjecture as to when the mortgage industry will finally begin to see signs of recovery.

Opinions are varied and last Thursday night as I journeyed home from the Money Marketing Awards I was given the benefit of a perspective from an amateur BTL landlord who also happened to be the driver of the black cab I was in.

Derek the Cabby from Lewisham gave me his view – that economic prospects will only pick up once next year’s football World Cup has arrived. If England have qualified and with only a two-hour time zone difference between here and South Africa, sales of plasma TVs, bbq sets and various other discretionary spends will surge. Confidence will have returned. Simple as that.

Now clearly Derek from Lewisham is no Ray Boulger or Melanie Bien but he is no fool. His three buy-to-lets were all skilfully bought via auctions several years ago, in sound locations and funded via base rate trackers. Further fact-finding revealed he had not used a broker and had in his, own words , applied “his own noddle”.

The purpose of this anecdote is to illustrate that no amount of governmental intervention can manipulate consumer thinking and spending patterns unless the consumer is feeling confident about his own situation and specifically his employment prospects. Low interest rates and improved liquidity will not suffice on their own and while the next six months’ economic data on HPI will help to hint at how far we are from the bottom of the house price descent, it is the daily announcements of job losses which are most afflicting prospects of a swift recovery.

With regard to money supply, it is interesting that the Government hopes this can have an effect in as little as three months. Additionally, its increased shareholding in RBS on the condition that £20bn of funding is made available for mortgages and small businesses may combine with its monetary policy to irrigate market infertility by the late summer when many commentators are now suggesting that house prices may have stopped falling. Certainly, by then, it is hoped that the near £50bn of lending being pledged by the Government’s lenders over the next 18 months will have started to granulate down to consumers.

In the meantime, intermediary businesses will continue to not only reduce overheads but some will also seek out distribution deals which may bring welcome cashflow respite. Recent announcements may be a clear indication that, in times of necessity, the virtues of a truly independent approach to mortgage protection advice become less pious.

Such sole-tie nuptials should become a win-win for each participant. Firms will doubtless benefit from an enhanced commission arrangement and immediate marketing allowances while the insurance company in question will enjoy the near- record levels of cross-sale penetration which most businesses are experiencing as a result of borrowers being more risk-averse and mortgage brokers themselves discovering that doing the job properly involves more than just waiting for a mortgage procuration fee to be paid.

Kevin Duffy is managing director of Mortgageforce


Fitch downgrades Aegon

Rating agency Fitch has downgraded Aegon after the insurer reported expected fourth quarter losses of £1.08bn.

Too little, too late

Who would have thought anybody could describe a £75bn cash injection “a leap in the dark”, as it was described by Conservative Shadow Chancellor George Osborne or unfortunately as it will also be described, too little too late.

Vince Cable

Most politicians are notoriously busy people and Liberal Democrat Shadow Chancellor Vince Cable admits he struggles to get his work/life balance right.

Fair factor

It is amazing how many times the Office of Fair Trading has stymied a simple regulatory solution to the problem of how IFAs charge for their services without real or perceived bias.

What's going on in the 'offshore' world?

Graeme Robb, Senior Technical Manager at Prudential, explores the current state of the nation for offshore issues and highlights areas which may be particularly relevant to advisers. In the context of insurance companies, ‘offshore’ can be a relatively straightforward matter. Like their onshore equivalent, offshore bonds are ‘non-qualifying’ for tax purposes, meaning that all gains […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. iM8MYR xypbxdulhxnp, [url=]iwaasquixwrd[/url], [link=]jkzjkmythntw[/link],

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 advice.

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