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Harris on Mortgages

The Council of Mortgage Len-ders estimates that gross mortgage lending could reach £300 billion for 2004. This figure cannot be accurate. I base my assumptions on the various claims of clubs and brokers alike on the level of mortgage business they are arranging. £1bn here, £5bn there and another £15 bn somewhere else. A quick totting up suggests the market for 2004 could reach £1tn.

Of course, the CML prediction is the accurate one but in a time when we all rely heavily on accurate data, specifically surrounding house price inflation (or the lack of it according to some), it would be welcoming to hear act-ual figures reported in the press rather than the spurious claims we have to swallow week after week. The comp-any I am fortunate enough to represent, Savills Private Finance, will arrange £2.5bn and my good friends at Charcol inform me they will arrange £3.5bn. These are accurate figures and come from firms with an extensive history and an enviable track record.

I recently read of a start-up with plans to employ 100 brokers and arrange £5bn. The last time I heard anything so far fetched was a former colleague attempting to persuade me that mortgages could be broked using the internet. My request to the market is simple, tell us all how well you are doing by all means but let&#39s not continue to take actual figures, double them (in some cases treble them) and then round them up to the nearest billion. A reality check is required. And one final thing, tell us when you have done it and not before.

Any new start-up or fledgling operation needs to give careful consideration to its brand and, more importantly, the ability of its salesforce to network effectively. Failure to do so will almost certainly see the business struggle to get off the ground. Purchasing leads rarely works – the best kind of business is the business that is referred or recommended to you. It is not dissimilar to starting a baseball game from second or even third base. Regular contact by email or phone with introducers is a must and time should be allowed on a daily basis to ensure this is happening.

Once the client is onboard, retaining them is an ent-irely different matter. Upon expiry of their initial mortgage you arrange for them, they will be courted heavily by the lender with a plethora of retention products and quite rightly so. As brokers, we must remain impartial at all times. If accepting the retention product is in the best interests of the client, then this is the advice they must receive. Where this is not the case, the opportunity then presents itself for the broker to once again arrange the mortgage. This assumes they have stayed in touch with the client through the initial mortgage period but often this is not the case.

The FSA is suggesting that to be able to recontact clients a broker must have stayed in regular contact. There will be the usual arguments about what constitutes regular but regardless of this I recommend clients are contacted quarterly via newsletters, emails or the good oldfashioned telephone.

Mark Harris is managing director of Savills Private Finance


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