View more on these topics

Key fits for Midshires

Birmingham Midshires is feeling pretty proud of itself as, three weeks before regulation, it had its key features information ready for brokers to view and trial.

Head of product strategy Steve Sandiford says: “We have been planning for this for two years. Essentially, everything had to go online and the sheer complexity of getting ready had to take this long but we are ready to go.”

One of the main issues with KFIs is to make it easier to submit changes when, for example, a client remortgages or changes circumstances.

Another issue affecting the construction of KFIs is the declaration of fees payable.

HBOS will declare all commission payments and parties. Sandiford says Kensington Mortgages recently announ-ced it will not disclose the fee to a pure packager as they fall outside the regulatory regime but he says: “In the spirit of regulation and transparency, we will declare all commission. That is what regulation is all about, isn&#39t it?” BM says the regulatory environment will mean more protection for consumers and a more professional and efficient service from both brokers and lenders.

BM, which became part of the Halifax Group in April 1999, retains its brand, branches and product ranges while drawing on the resources and market experience of its parent. Sandiford says he is uncertain whether this would have chan-ged if HBOS had acquired Abbey but be believes that there will be further consolidation in the UK mortgage market in the near future.

He says there are too many lenders chasing a finite market and the oncoming regulation will certainly hasten consolidation. He says: “On the distribution side, a lot of brokers and networks will face consolidation in the next 18 months.”

But BM&#39s position seems safe under the HBOS umb-rella. BM&#39s mortgage specialist areas include buy to let, sub-prime and self-certification. It employs over 2,000 people and manages assets of over £11bn.

BM says its philosophy on sub-prime lending is to bring transparency and fairness in a field where some customers are being exploited. Sandiford says: “We see a lot of abuses in the sub-prime market, with extortionate product prices and big fees for brokers.”

BM has standardised its procuration fees rather than use a sliding scale, as some lenders do, where the fee is directly related to the risk. It feels it cannot justify charging higher fees for higher risk.

Sandiford says some brokers have the incentive to work with lenders which provide higher fees for dealing with clients who pose a more substantial financial risk. He believes it is just a matter of time until the FSA picks up on this subject and confronts lenders.

Another growth area for BM is the BTL market. After the boom in this market, some economists have expressed concern that the property bubble may burst. As house prices have levelled and the Bank of England base rate has risen, the BTL market may not have the same attraction but BM is convinced that BTL is here to stay.

This sentiment is echoed by Paragon Mortgages chief executive Nigel Terrington, who says: “With the poor performance of other assets and the 2006 pension rules allowing inclusion of residential property in Sipps, there is real potential for long-term growth prospects.”

Sandiford says over the last few years, BTL has become an integral part of financial planning. “It is a happy coincidence that the rise of this sector coincided with the scandal of pensions,” he says.

BM&#39s BTL customers are described as those who understand the long-term capabilities of a cyclical market. Acc-ording to 2003 market share figures from the Council of Mortgage Lenders, BM is the biggest BTL lender in the UK.

Director of mortgages Michael Bolton says online propositions from brokers in the last year have been BM&#39s greatest hit and its one-minute mortgage is hugely popular. BM says 90 per cent of its broker business is placed online.

Sandiford says Bolton is “a good leader and visionary, with great clarity of thought”.

BM now waits to see what regulation will bring. Sandiford says: “We have seen some lenders take their foot off the gas because of regulation and rate changes but we will certainly see people come back in taking some of the market share after regulation.”


Constructive approach

I wanted to respond to Mark Dampier&#39s letter (Money Marketing, October 21). The Bates analysis that MM used to write the story aimed to point out that even during periods where stockmarkets were flat, there are funds in both the UK all companies and UK equity income sectors that have demonstrated the ability to deliver […]

Select & Protect selected by Whitechurch

Slect& Protect has been appointed as one of the providers being used for home and mortgage payment protection insurance to The Whitechurch Network&#39s members. Select & Protect chief executive Simon Hood says: “Whitechurch has been successful in maintaining their approach to the choices the market offers by being flexible and offering compliance expertisek secong to […]

Johnson to speak at ABI summit

Minister for Work and Pensions Alan Johnson will be the main speaker at this year&#39s ABI Saver Summit. Johnson will lead debate on Saving for Retirement: Today&#39s Problem, Tomorrow&#39s Solution at the QEII Conference Centre, London on Tuesday, November 2. Other speakers include New Zealand&#39s retirement commissioner Diana Crossan and Professor John Hills from the […]

Klonowski follows in Australian&#39s footsteps

An IFA is changing his business model following correspondence with an adviser from Australia who appeared in Money Marketing. Sole trader Francis Klon-owski will outsource all his investment advice after reading about the success of Australian David Haintz. Klonowski and Haintz have been writing to each other ever since the Australian had an article published […]

Nigeria cover image - thumbnail

White paper — Nigeria International Insights

Jelf Employee Benefits closely examines healthcare provision and challenges within Nigeria. This will be of particular interest to HR decision makers with employees based in Nigeria, and assesses the environment, risks, facilities and safeguards that are relevant to organisations that are actively deploying expatriate staff in this location.


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 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