View more on these topics

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.


Ethical investment hits 10bn mark

Ethical investments broke the 10bn barrier for the first time last year, according to Co-operative Financial Services. It says 10.6bn was placed in ethical investments or deposited with ethical banks and credit unions during 2004. A total of 5.5bn was invested in ethically screened funds while 5.1bn was deposited in ethical banks and credit unions. […]

Youngest associate for PFS is just 21

Richard Cohen from Worthing-based Nsure Group has become the youngest associate of the Personal Finance Society at just 21 years old. There are 1,092 associates in the UK and the average age is 41. Cohen started working part-time for Nsure, which is headed by his father Tony Cohen, in 1999 while still at college before […]

Non-conforming move by Beacon

Beacon Capital Holdings is entering into non-conforming lending with the launch of Beacon Homeloans. The lender will distribute exclusively through the Regulatory Alliance of Mortgage Packagers. The group now consists of its IFA arm, Beacon Asset Management and packager, Beacon Mortgages.

Lawyers to lobby on principle regulation

A consortium of legal experts led by Beachcroft Wansbroughs is planning to lobby the FSA this autumn over the legality of its principle-based regulation. Financial services law firm Beachcroft Wansbroughs has invited a team of legal and compliance directors of financial services firms, legal professors, barristers, judges and the FSA general counsel to the board […]

Tax-free gains? That can’t be right, can it?

When he was Chancellor of the Exchequer, George Osborne made several changes to the way in which income is taxed. Personal allowances were increased significantly above the rate of inflation; a starting rate band was introduced for savings income and, with effect from 6 April 2015, this was assessed at 0 per cent. In addition, […]


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