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Mortgage View: Near-prime movers

My monthly rant is normally restricted to one topical subject so it is quite ironic that in a typically slow news month there is plenty to commentate on. In no particular order, here are some musings on four newsworthy items of late.

Cartel’s managing director recently commented that there is an unhealthy obsession with online trading. There is no doubt – as the fortunes of Charcol and Savills’ e-commerce ventures dem- onstrated – that the high-street punter wants to execute business face to face. But he also wants a mortgage offer letter in double-quick time and is discerning enough to ask whether brokers have B2B application channels to circumvent the form-filling tribulations.

Make no mistake, online trading has been the saviour of the industry at a time when compliance costs have soared and homebuyer activity has cooled. To sugg- est otherwise is tosh.

On the subject of the comatose hous- ing market, there are finally signs of revival and the base rate reduction will be a shot of adrenalin to go with Halifax’s return to brokers’ best buy tables.

However, the rate reduction has come too late for some traditionally prime-orientated lenders dipping their toes in the non-conforming product pool. As rates fall, prime margins are going to start looking skinny.

Near-prime virgins Universal Building Society and Derbyshire have doubtless done their homework. But, in what is already a sardine-canned sector, it will be interesting to see if either really makes the sustained splash which can improve overall operating margins.

This expression near-prime is a little nebulous. My own feeling is that the subject wants for definition and will only have a limited shelf life before the mainstream lenders decide that today’s near-prime is actually tomorrow’s standard vanilla business. In some cases, that is the case already. As a wayward adolescent, I was relieved to discover that you cannot be half-pregnant. So watch for Abbey, HBOS and an emergent C&G cornering this market.

On to Halifax and its new interme- diary offering, which really is a breath of fresh air. HBOS appears to be back at the party, with Bank of Scotland also distinguishing itself with the most potent advertising drive at present in respect of its Premier Service. The BOS proposi- tion is a class act, so brokers of loans above 500,000 should really get stuck in.

The omens for brokers are portentous. A two-year rate at 3.99 per cent can only be days away.

Finally, in the midst of the transfer season, there have been some fascinating moves. Cammy Amaira was to Mortgage Express what Patrick Vieira was to Arsenal.

MEX supremo Tim Dawson is the pion- eer of the buy-to-let phenomenom and his communiqu矴o brokers on Amaira’s departure was typically gracious and magnanimous. It was clearly a decision which Amaira did not take lightly but it does also demonstrate that while bro- kers will always return to a lender which takes an uncompetitive product stance for a given period, conversely, lenders’ key staff also need to constantly feel that they are batting at Test match level as opposed to keeping trim in the nets.

MEX will ride out the loss and I hope will be back shortly with sharper products.

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