View more on these topics

On a mission

Kevin Duffy, Mortgage View

The mortgage market typically takes a sojourn in August but not this year, given the deluge of news releases. Knight Frank, Purely Mortgages, Halifax, Coventry Building Society, Lehman Brothers, the Government and its regulator. These are just a handful which have bulletined significant strategic initiatives in the past month. Full justice cannot be done to them all here but a preliminary verdict on each is apposite enough.

In the dock first are the four AR networks which have had to silence their recruitment machinery and some incessant propaganda with it. Their identities remain a mystery although informed guesses would surely produce some correct answers. This FSA neutering is not before time. The hijacking of sections of the trade press over the past year to promote highly ambitious mission statements has become as tedious as it is risible. Autumn will doubtless reveal all.

Next to be arraigned was this feckless Government. Hips were an ill-conceived failure waiting to happen. I have no sympathy at all for those businesses that invested big sums in it only months after this regime’s no less desultory U-turn on Sipps. Dead in the water is where the concept will rest, regardless of any lingering trial period.

More positive soundbites included the news that Coventry, Northern Rock, Alliance & Leicester and Scarborough are all taking a dip in the specialist lending pool. This is good news for brokers and consumers but I would recommend that none of the aforementioned over-extends themselves.

The threats to these “experimental” lenders enjoying anything more than token market shares are very real at a time when specialist lending margins are in recession anyway. In an overcrowded sector, only last week it was alleged that GE had lost 50 per cent of its market share in the past 12 months. Moreover, the tactics of, say, Edeus and others (which will offer competitive products but not at historically high procuration levels) will further accelerate margin erosion.

Simultaneously, it is HBOS’s retention policy which could really hurt all the newcomers’ prospects. There is a calculated risk in HBOS’s play – if other mainstream lenders were not to follow suit, then it might find itself in a solitary au naturel position and the pricing of its retention products could come under scrutiny. As ever, HBOS leads and it must surely want followers.

But can you imagine how much less remortgage lending may be possible for the specialist new entrants if, say, Nation- wide, Britannia, Mortgage Express and others started to defend their positions with similar retention tactics?

Brokers are also making some unseasonal and yeomanly moves. Purely Mortgages’ downsizing was a marker for many other brokerages and networks which are operating on the cusp of profitability but are inhibited from making such bold moves by the fear of a trial by public relations.

Finally, there is Knight Frank. Simon Gammon is a capable practitioner and cannot fail with a brand and balance sheet that luscious although I would be astounded if the firm’s mortgage business became much more than an in-house proposition.

Mark Chilton and his start-up team at Savills whole-heartedly clasped the elite consumer market almost a decade ago and it would take a sizeable seven-figure marketing spend to position Knight Frank in the mortgage world where it sits resplendent in the world of estate agency.

Kevin Duffy is managing director of Hamptons International Mortgages


97% of investors accept FDL deal

Fund Distribution Limited says over 97 per cent of investors have accepted its first distribution offer and 113m has been paid out to around 24,600 investors. This covers losses totalling 284m and represents a recovery of 40 per cent of losses. FDL will make its second and final distribution of 29.5m, equivalent to 10p in […]

Defensive moves

Large-cap growth shares will provide the best returns in the next 12 months, equities will outperform bonds, cash and commercial property and the FTSE 100 will end the year above 6,000. This is the consensus of the Adviser Fund Index panellists, according to the first AFI mid-season questionnaire. The vast majority of panellists expect the […]

Let us be more open-minded

Daniel Godfrey, The AITC’s viewInvestment companies have survived numerous crises in their 150-year history, perhaps none more challenging than the recent collapses in the split-capital sector. That is now behind us and the industry can start to focus on what is needed to thrive rather than just to survive. In some ways, the split-cap crisis […]

IFAs could face action over Eurolife secured bond

IFAs who sold Eurolife secured bonds in the late 1990s could face action from the Financial Ombudsman Service after Eurolife went into administration last week. The secured bond, set up in 1999, was sold exclusively through advisers. The firm had to offer 2,300 investors a compromise deal 18 months ago when it became clear that […]

Survey cover

EEF/Jelf Employee Benefits Sickness Absence Survey 2015

EEF stated in its 2015 EEF Manifesto that the UK’s growth prospects depend on people being fit, working and productive. Keeping people in work and helping people return to work is very important for the manufacturing sector. It means boosting productivity by getting people back into work as early as is possible, as well as fostering workplace cultures and environments that proactively manage individuals’ health conditions so that all can benefit from lower sickness absence outcomes.


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