A happier Easter for the mortgage industry – Oldfield

A happier Easter for the mortgage industry – Oldfield

Compared to last year, so far 2024 has been a bundle of joy for the UK mortgage industry. But it’s still been challenging and, no doubt, there are more trials ahead.

Encouragingly, we saw a continuing increase in mortgage approvals for house purchases between November and January, according to HMRC. And yet house prices are falling and rising, mortgage rates are rising, lenders are cutting rates, increasing them, cutting them again. 

And swap rates were up and, at the time of writing, have come back down again after the pleasantly surprising 3.4% inflation rate announcement.

Lenders and brokers are caught somewhere in the middle of this rollercoaster of a start to 2024. For lenders, the main challenge during all this flux is managing the complexities of reaching their lending and savings targets while making sure that they’re identifying and managing vulnerable borrowers.

What happens after Easter, however, remains to be seen, with the Bank of England unlikely to drop interest rates for a while. Although there had been some chat about interest rates not dropping at all this year – despite the headline rate of inflation having just fallen alongside domestic energy prices – this no longer looks the case.

At the end of February, Bank of England Governor Andrew Bailey said that inflation doesn’t need to reach the 2% target before interest rates are cut, and that it’s “not unreasonable” for the investors to expect a rate cut this year.

He seemed optimistic about signs that Britain’s economy is picking up after falling into recession at the end of 2023, and it has now pulled itself out of it.

 

A timorous second half of the year for lenders? 

While UK Finance and the Bank of England had envisaged a drop in lending in the second half of the year, I am more optimistic.

I think that we could easily be far enough ahead in the first half of the year to maintain momentum for the second half. And let’s not forget the million or so homeowners who are coming to the end of their fixed rate mortgage deals this year.

The downside, of course, is that indebtedness is high and rising. In January, consumer credit borrowing rose by £600m to £1.9bn. Unfortunately, we can probably expect to see an increase in arrears volumes and a continuing decrease in people’s ability to borrow more or switch lenders.

Despite this, later life lending and equity release arrangements will increase – not least because of our ageing population, but because the products available are a lot more flexible – another good outcome of Consumer Duty. Although UK Finance figures revealed a sharp decrease of 37% in loans to older borrowers in the last quarter of 2023 compared to the year before, we should expect to see a much more buoyant figure for Q1 2024, in line with general market trends.

 

What needs to change in the mortgage industry?

Consumer Duty 2024 driving lenders to sell back books 

With the July 2024 deadline looming for lenders with back books to comply with Consumer Duty rules, lenders will need to take stock. Lenders with legacy systems, products and approaches may struggle to find and manage the data required and will possibly need to either sell their back books or outsource their books to a third party to manage.

An end-to-end property ecosystem 

In 2024, we will see great strides in the property industry evolving into a more digital environment – one where the storing, accessing and sharing of data doesn’t create the barrier to efficient property buying and selling that it does today.

We’re working with the Open Property Data Association (OPDA) to help drive this so that – whether you’re a lender, a seller, a buyer, a conveyancer, intermediary or surveyor – these new open data and technology standards will be essential when making any kind of informed property decisions. 

BTL lenders kept us on our toes amid market calm – Armstrong

BTL lenders kept us on our toes amid market calm – Armstrong

Now, let me qualify that by adding that I don’t think that’s necessarily a bad thing. With the last 12 months being such a turbulent time for the industry, 2024 was always going to be about recovery.

And now it finally feels as if things are calming down and we’re settling into a slightly more stable period.

That’s not to say things are at a standstill. This month has seen tweaks and changes from many lenders as they continue to deal with the challenge of the cost of funding. The market remains active, driving activity and keeping both lenders and brokers on their toes.

Let’s take a look at some of the positive changes we’ve seen in the last few weeks.

 

Products coming to market 

Fleet Mortgages introduced 65% loan to value (LTV) five-year options across its three core ranges: standard, limited company and houses in multiple occupation (HMOs) and multi-unit freehold blocks (MUFBs).

In its standard and limited company ranges, the product is priced at 5.29% with a 3% fee, whilst the HMO/MUFB option is priced at 5.69% with the same fee.

CHL Mortgages has expanded its CHL 1 product range this month, including a range of five-year fixed rate products as well as 55% LTV options.

CHL 1 offers standard buy-to-let (BTL) and HMO/MUFB products for both individuals and limited companies. Standard BTL rates start at 3.19% for a two-year fixed and from 4.67% for the five-year fixed, both up to 55% LTV with a 7% fee. The equivalent HMO/MUFB products are priced at 3.21% and 4.73% respectively, again up to 55% LTV and featuring the 7% fee. 

Foundation Home Loans launched a limited edition two-year fix to offer landlords greater choice when looking for shorter-term options. The product is in its F1 range for clients with an almost clean credit history and is fixed at 5.79% for two years. It is available up to 75% LTV and features a 1% product fee.

It is available for both limited companies and individuals.

 

BTL pricing adjustments 

Suffolk Building Society has made some rate reductions of up to 20 basis points (bps) on a number of its BTL, expat BTL, expat holiday let and BTL light refurbishment products.

These include an 80% LTV BTL light refurbishment two-year fixed product, now priced at 5.99% with a £999 completion fee, and an 80% LTV expat BTL two-year fixed, now at 6.09% with a £1,499 completion fee. Both these products are available for purchase or remortgage. 

Precise made some changes to its BTL proposition. A reduction in its 80% LTV products means that two- and five-year fixed rates at that LTV now start from 5.79%. It also relaunched Tier 2 and Tier 3 products to support those landlords with adverse credit profiles.

A two-year fix in Tier 2 for single-dwelling properties starts from 5.29% with a 3.5% product fee up to 75% LTV, whilst in Tier 3, the equivalent rate is priced at 5.59%. 

Zephyr Homeloans has reduced all its five-year fixed rates and lifetime tracker products by 15bps. A 70% LTV five-year fixed product for a standard property with an EPC rating of A to C is now priced at 5.25% with a 5% product fee, or 5.65% with a 3% fee.

Lifetime trackers now start from 6.79% (bank base rate plus 1.54%) up to 65% LTV for a standard property with an EPC rating of A to C. Product fees can now be added to all products, including those in its 75% LTV range. 

Kent Reliance has enhanced its BTL range by reducing its 80% LTV fixed rates by 50bps. A two-year fixed product at 80% LTV is now priced at 5.84% with a 3.5% fee or 6.34% with a 2.5% fee. A five-year fixed at 80% LTV is priced from 5.99%.

Kent Reliance’s full range is suitable for any property type, including HMOs with up to 20 lettable rooms.

West One has made rate reductions on a selection of its core first charge BTL fixed rate ranges. Rates in its large HMO complex range have been reduced by 20bps and now start from 4.99% for a two-year fixed up to 55% LTV with a 4.99% arrangement fee. This range covers HMOs from seven to 10 beds and MUFBs from seven to 10 units. The lender’s expat and W2 ranges have both been reduced by 15bps and its small HMO/MUB range by 10bps. 

Landbay has reduced rates by up to 0.25% across its five-year fixed range for small HMOs and MUFBs, including trading companies and first-time landlords. This range also features a variable fee structure to provide greater flexibility where it is needed. The 6% fee option for small HMO/MUFB up to 75% LTV is now priced at 4.99%, whilst the lower 3% fee option is 5.79%. 

 

A criteria update 

Last but by no means least, in an amendment to criteria, Coventry for Intermediaries has reduced the reference rates for BTL applications to make it easier for new and existing landlords to finance their rental properties by borrowing more.

Five-year fixed reference rates are now 4.75% (previously 5.5%) or pay rate (whichever is higher). Two-year fixes are now the higher of 5% (previously 5.5%) or pay rate. For two-year fixes with additional borrowing, the reference rate is now 6.5% or pay rate (whichever is higher). 

 

If you are interested in registration for the Buy to Let Market Forum 2024, please follow this link.

Building societies: technology innovations meeting members’ expectations – Oldfield

Building societies: technology innovations meeting members’ expectations – Oldfield

Keeping up with the fast pace of technology, however, can be a challenge. Especially when members – like the rest of the world – have such high expectations of technology in every aspect of their lives, including how they borrow and save money.

 

Technology for humanity

Technology can help support so many areas that are core to a building society’s mission and purpose. Process automation and quick access to trusted, manageable data are key to balancing out and supporting the important, human side of building societies.

Automated processes are cutting out the bulk of manual, repetitive tasks and heavy lifting around, for example, back-office processes such as servicing mortgages and savings accounts.

Once member assets are being serviced efficiently, the business is then free to focus on the people side of the business – on the customer management and community relations for which building societies have long been lauded.

 

No band aid required

To compete with the trendy fintechs attracting today’s tech-savvy TikTok generation with their two-click self-help services, it can be tempting for building societies to take a band aid approach to their legacy systems.

However, adding new layers of technology onto older systems will inherently be slow, time-consuming and dependent on manual intervention. Ultimately, this approach is not cost-effective. 

Instead, in a world where speed, security, resilience and application programming interface (API) integration are driving smooth and efficient customer experiences, the smart building societies are collaborating with trusted partners who can provide them with cloud-first software-as-a-service (SaaS) solutions.

 

The modern mutual

Many societies have already transitioned into a ‘modern mutual’ business. They have integrated traditional, branch-based member services with new digital channels – all delivered over the internet. This has mainly been possible now that forward-thinking building societies have overcome earlier barriers to digital transformation and cloud technology. 

 

A collective consortium

The cost of digital transformation is one barrier that may still exist, however. This is often particularly true for small and medium-sized building societies who recognise that investment in technology is critical, yet the cost can seem prohibitive.

One solution for this is to form a collective consortium with a small group of building societies. This collective approach to implementing, scaling and sharing services creates lower costs for each society, while still allowing them the autonomy to function as separate businesses.

 

Digitised property data

It is a very exciting time for mutuals operating in the mortgages space.

Not least because of the recently launched open property data programme, which is set to transform the entire property transaction process for lenders and everyone else involved.

The Open Property Data Association (OPDA) is digitising trusted property data so it is accessible to everyone relevant to a property transaction. This includes lenders, of course, and their clients, as well as financial advisers, estate agents and conveyancers.

Lloyds Banking Group (LBG) is one of the latest financial institutions to announce its membership of the OPDA. LBG expects that the digitisation of property data will potentially slash contract exchange times from an average of 22 weeks to less than a month. 

Technology moves at such a pace that it will always be important for competitive building societies to have innovative technology partners who can make sure their business is nimble and competitive, meeting and exceeding member expectations. 

Digitalisation of property information – Syms

Digitalisation of property information – Syms

Under the Consumer Protection Regulations (CPRs), agents were obliged not to omit any material information when listing a property for sale or rent. Although material information is any information that is important in helping an average consumer make a decision about a property, until this guidance, there hadn’t been a defined list of the basic information required. 

This has now been clarified, with the defined list as below: 

Part A: Information that, regardless of outcome, is always considered material for all properties regardless of location. 

Part B: Information that must be established for all properties. 

Part C: Information that may or may not need to be established, depending on whether the property is affected or impacted by the issue in question. 

Part B information, such as who supplies the broadband and how good the mobile coverage is, does not include items of information we have been using to seeing upfront when a property is listed. Interestingly, although breaches of trading standards are law and subject to enforcement, many estate and letting agents are still unaware of the extent of data required to be put together before listing the property.

National Trading Standards may take a more generous stance for the time being as knowledge of this guidance becomes more widespread, but this grace will not last forever. 

 

How this impacts the mortgage process 

Companies like Moverly have entered the market to create these packs on behalf of agents and their customers. But why is this of interest to mortgage advisers? 

To understand the direction of the market, you also need to understand what is happening at the Open Property Data Association (OPDA), chaired by Maria Harris, the industry-known tech advocate.

OPDA is spearheading efforts to standardise and digitise property data, a move aimed at streamlining purchase transactions, enhancing transparency and speed, and ultimately redefining the homebuying process. 

For advisers, having the information available when researching the mortgage options for the client will save the mortgage adviser and the customer time in the long run. For example, there may be details about the property that are not acceptable to certain lenders and may have otherwise not been found out until after the cost had been incurred for a survey. 

OPDA’s work on standardisation and digitisation means the information can be shared digitally between all the parties in the chain instantly and in a format each party can work with. Mortgage adviser systems are very different from surveyors’ or solicitors’ systems, and the OPDA has been developing a common language enabling each system to communicate more effectively with each other.

 

The beginning of change 

The digital property pack is the start.

We have been asking ourselves for some time why customers have to prove their identification to the adviser, then the lender, and then the solicitor. Using language standardisation and open application programming interface (API) and credentials technology, the customer will be able to deposit their information in a ‘vault’ that will then be accessible to all of the parties and their systems.

Clearly, there is more work to be done, but we are on the path. In fact, there are two further initiatives that keep this high on the roadmap at government level. 

The first is the King’s speech, which passed a data bill setting out the legislation needed for reusable digital identity, smart data (private data sources), and other data (public data sources) to be digitised and shareable. 

The Department for Levelling Up Housing and Communities (DLUHC) was awarded £3m in the Autumn Statement to improve the homebuying process with open data standards, which is what the OPDA has created. The DLUHC will continue to work with OPDA on building trust and an interoperability framework. 

You can think of this as open banking, but for property data.

The potential for savings in the time it takes for a house purchase to complete is immense, as data are received by everyone in the chain upfront. This can include the customer paying for searches upfront, and in recent trials, a house purchase went from offer to exchange in just 15 days. 

A number of industry players are currently configuring their systems to adopt the new standards. This includes Rightmove, which helps agents at the front end of the process. Lenders like United Trust Bank, Lloyds Banking Group and Atom Bank are involved, as is One Mortgage System (OMS), the adviser client relationship management (CRM) system. 

OMS expects to relaunch the property area of the popular adviser CRM in the next couple of months, making it ready to adopt the new technology, which will ultimately benefit all our clients.

This is just one area where technology can play a large role in the mortgage process. With the rapid onset of new technologies such as artificial intelligence (AI), I am sure there will be plenty more to come. 

Resource augmentation: more than just a stop gap – Morgan

Resource augmentation: more than just a stop gap – Morgan

Some 86% of UK employers are having difficulties hiring and, in the financial services industry alone, this figure is at 83%. 

Financial services employers are struggling to hire people to implement their critical digital transformation programmes. Fintech is seeing an all-time high in demand for people in emerging and advancing areas such as cybersecurity, artificial intelligence (AI) and data analytics. Globalisation means intense competition for skilled workers and qualified professionals.

Talented people can afford to be choosy too, expecting as the norm benefits such as remote and hybrid working that emerged from the pandemic. 

 

Outsourcing talent 

Increasingly, businesses in the financial services sector are getting around this perfect recruitment storm by looking outside their organisations and implementing resource augmentation. To stay ahead, they need to take new approaches in acquiring and managing talent.

Accenture Research has found that nearly 90% of companies across all industries contract a third-party solution provider to help with at least one component of their digital transformation.

Having access to the right talent at the right time can be critical as fintech rapidly advances. Keeping pace otherwise for financial services businesses is a real challenge.

Put simply, resource augmentation is a flexible and cost-effective way of sourcing what you need. More than a convenient option for managing short-term needs, when implemented strategically, resource augmentation can be an integral part of an organisation’s long-term success.

 

Filling gaps with technology 

Instead of investing in hiring employees with specialised skills, companies can access expertise in emerging technologies such as software development, data analytics and cybersecurity. Companies can scale their workforce up or down based on project demands. The flexibility of resource augmentation allows for more efficient resource allocation and cost management, even reducing costs. 

It’s not just the larger companies that are using resource augmentation to bolster their tech. A broad range of financial services organisations are doing so for different reasons while achieving cost efficiencies.

SMEs and start-ups are augmenting resources to access specialised expertise on a temporary or as-needed basis without the long-term costs and commitment associated with traditional hiring.

Both types of business can operate with limited resources and so need to be agile in scaling their operations. 

Larger enterprises benefit from resource augmentation when there are short-term projects, spikes in workload or seasonal or cyclical fluctuations. Augmenting their existing teams with specialised skills can help meet project deadlines and maintain productivity without overburdening their internal staff. They can scale their workforce up or down as needed. The same is true of special projects, such as software development, mergers and acquisitions (M&A), or process improvements. These may require specific expertise or resources that are not available internally.

Resource augmentation brings in experts or specialised teams. 

 

Moving quickly 

Businesses expanding into new markets or launching new initiatives may need to quickly ramp up their capabilities to support growth and innovation. Resource augmentation enables them to access the skills and resources necessary or implement strategic initiatives without delaying timelines or overextending their internal teams. 

Resource augmentation allows organisations to quickly adapt to market demands, innovate, and seize new opportunities. By outsourcing non-core functions or tasks, organisations can free up internal resources to focus on core competencies and strategic initiatives that drive business growth and innovation.

This strategic focus enables organisations to allocate their resources more efficiently and effectively.

Engaging augmented resources typically involves shorter-term contracts or project-based engagements, reducing the long-term financial commitments associated with hiring permanent staff. This can be particularly advantageous for companies operating in dynamic or uncertain markets.

Augmented resources can bring fresh perspectives and efficiency improvements to projects, potentially leading to cost savings through optimised processes and workflows. 

With a growing number of market forces impacting the financial services industry, resource augmentation is an important part of a business’s armoury in delivering its strategic objectives.

It is much more than just filling a skills gap. 

The potential of Sharia-compliant finance for ethically minded first-time buyers – Donnelly

The potential of Sharia-compliant finance for ethically minded first-time buyers – Donnelly

According to a 2022 report by TheCityUK, the UK is a leading Western centre for Islamic finance, ranking 27th globally. 

Islamic finance is often perceived as more ethical than conventional banking, making it a valuable option for brokers to keep in their toolkit for their more ethically minded customers.

 

How is Sharia-compliant finance a more ethical alternative?

Sharia-compliant finance follows the Sharia principles of transparency, fairness and ethical venture. These principles prohibit investment into sectors perceived to cause harm to society, including gambling, alcohol, adult entertainment, tobacco and the arms industry. Subsequently, Sharia-compliant banking naturally aligns with several international frameworks for sustainable development and is widely regarded as a more ethical option to conventional banking.

At Gatehouse Bank, we have further formalised our ethical commitments by becoming a founding signatory to the UN Principles for Responsible Banking, where we have aligned our core strategy, investment and decision-making to the UN’s Sustainable Development Goals, the Paris Climate Agreement and other sustainable development frameworks.

 

Sharia-compliant home finance in practice

Sharia-compliant home finance products are known as home purchase plans, which are commonly referred to as the Islamic alternative to a conventional mortgage. 

Unlike traditional home finance products, Sharia-compliant products do not pay or charge interest. This is because Sharia principles state that money should be put to work to produce a return for the benefit of the whole community rather than generating profit in and of itself.

Home purchase plans encourage the sharing of risk and reward, entailing a partnership between the bank and the customer, who purchase the home together. The customer then pays the bank rent on the share of the property they do not yet own, as well as a monthly acquisition payment. With every monthly repayment, the customer acquires an increasing portion of the home until they ultimately become a homeowner.

 

Overcoming the misconceptions of Sharia-compliant finance

A prevalent misconception around Sharia-compliant finance is that it is only available for those of the Muslim faith. On the contrary, Sharia-compliant banks like Gatehouse offer products to everyone – including those of all faiths, and none. A 2023 survey conducted by the Islamic Finance Council UK revealed that 90 per cent of respondents find it important that the finance products that they purchase align with their values and ethics, demonstrating a growing awareness of Sharia-compliant products as an ethical alternative to conventional banking.

Another misconception surrounding Sharia-compliant finance is that the customer doesn’t benefit from any appreciation in property value. This isn’t the case, as Gatehouse Bank’s products are designed so that the bank commits to selling its share of the property back to the customer at a set price, meaning any increase in value benefits the customer.

These misconceptions, alongside the growing appetite for ethically focused financial products, present a significant opportunity for finance providers and brokers alike to continue raising awareness of these alternative finance options – not only for customers who are seeking Sharia-compliant products, but to ensure that first-time buyers are fully aware of all their options and have the opportunity to align their financial goals to their personal values.

What makes someone choose a broker? – Bawa

What makes someone choose a broker? – Bawa

The Financial Conduct Authority (FCA) estimates that around one-and-a-half million borrowers are up for remortgage this year, with most, I expect, discovering their monthly payments have gone up when they do.

While the market has seen an improvement in rates since the tail end of last year, for some advisers, there will still potentially be difficult conversations with clients that lie ahead.

I expect a lot of borrowers are already aware of their situation before they visit a broker, and this may form a part of their decision-making when it comes to who they choose to visit for advice.

For some of the one-and-a-half million borrowers, it may have been five years since they last visited their broker for advice. If they were happy with their service last time, they will no doubt visit the same broker again. However, if not, or if they simply fancy a change, they will be looking for a new broker. 

So what makes a client choose a broker?

If we go back five years to when a borrower was perhaps moving onto their current fixed rate, for some, arguably, rate was king – borrowers knew interest rates were low and, in return, wanted the best deal they could find. 

Given that rates were so low, affordability was less of an issue for borrowers than it is today, and this may have swayed them into a different mindset – perhaps leading them to seek advice online.

The market is now in a slightly different place, and I believe borrowers, anticipating potentially challenging conversations, will find that who they confide in becomes more of a personal choice. After all, discussions about finances can be tricky even in the best of times. 

 

Service

I still believe good service is one of the biggest retention tools brokers have at their disposal.

Generally speaking, there can be a tendency to remember really bad and also very good service – which is why I think we often see extremes in online reviews.

Whether it is securing a good rate for a client, responding quickly, or generally being professional and approachable, if a client has received good service, they are likely to tell their friends and family about it as well.

One of the most common questions brokers often ask is ‘How did you hear about us?’ More often than not, the answer is through word of mouth or a personal recommendation. After all, nothing speaks louder than a satisfied client singing your praises to their friends and family.

 

Convenience 

In today’s fast-paced world, where everyone leads busy lives, convenience is key.

Convenience can take on various forms. For some borrowers, this may involve visiting a broker in the evening after work – and among our own members, we have seen this become a growing trend as they look to cater to the varying needs of borrowers. For others, convenience might mean visiting their local brokerage on a Saturday morning on their way into town. Or for others, seeking advice online or through an app while commuting to work will be the preferred method.

 

Fee vs no fee 

For others, their decision on which advice firm to choose may ultimately come down to cost. This can work both ways. If affordability is potentially an issue, while one borrower might view the increase in payments as a need to save money on the advice side, others might recognise that potentially more work will need to go into their application and paying a fee for advice is worth it.

 

The culture 

The culture of a firm is something that has also become increasingly important to clients over the past few years – whether it is aligning with the company’s green ethos, its professionalism, or its overall image. Receiving mortgage advice used to be a formal event – sitting down with the local bank manager and trying your best not to put a foot wrong. Nowadays, clients are increasingly looking for someone they can relate to and who can put them at ease.

The issue of diversity is a growing one in financial services, whether it be an increase in female presence within a firm or a minority ethnic group. March 8 marked International Women’s Day, and we are fortunate at Rosemount to have a number of strong female advisers within our network – our youngest who qualified at just age 18.

There is a diverse range of borrowers looking for mortgage advice, and I think it’s great when firms can reflect this diversity in their own businesses.

 

What borrowers are not looking for

We’ve talked about what clients are looking for – but what about what they are not looking for? 

Some comments recently by broadcaster Paul Lewis quite rightly sparked uproar in the mortgage community when he suggested that to get the best possible deal, a borrower should go to one of the big, national, independent mortgage brokers – “don’t find a mortgage broker over the local cab shop in the high street,” he said.

I think we are increasingly moving away from this image in financial services that bigger is better.

Visiting a large, well-known high-street bank doesn’t guarantee you a better rate or service – and the same is true for brokers and networks.

Paul Day’s quarterly network table serves as a reminder of this. At one time, there was a tendency to look at the table and think that those with the highest numbers were naturally doing better.

I think, increasingly, not just with networks but also with brokers and their clients, it’s not all about size and growth for growth’s sake. At Rosemount, I know we don’t want to forgo our principles and the care and attention we give to each of our adviser firms. We are finding that we are not chasing size, but rather a more personal approach.

Know Your BDM: Tim Horne, Paragon Bank

Know Your BDM: Tim Horne, Paragon Bank

Which locations and how many advisers and broker firms do you cover in your business development manager (BDM) role at Paragon Bank? 

I cover what is classed as the ‘Midlands’ region, but this is a fairly loose definition because I work with brokers stretching from Staffordshire to Hemel Hempstead. As well as that geographical spread, my role is also quite diverse in terms of the size of the firms I look after, ranging from brokers who work on their own based from home, right up to larger operations with city-centre offices.

 

What personal talent/skill is most valuable in doing your job?

I think empathy plays a very big part in the role. Whilst there’s more positivity this year, having an understanding of brokers and their clients’ needs has been particularly important over the past 12 months or so as we’ve worked through the challenges brought about by economic instability.

 

What personal talent/skill would you most like to improve on? 

I think having a bit more patience would not go amiss! I guess wanting things yesterday is natural in a sales environment as it’s fast-moving, but sometimes you have to take time to step back and analyse what you are doing – quickest isn’t always best, I guess.

 

What’s the hardest part of your job as a BDM?

For me, one of the biggest challenges is trying to juggle the large volumes of phone calls and emails that I receive each day, especially when I’m out on the road. I’m waiting for Elon Musk or some other tech pioneer to develop an AI assistant who can efficiently deal with all of that for me.

 

What do you love most about your job?

I love the variety that it brings, especially being in the complex buy-to-let (BTL) space where no two days are the same. I also enjoy the numerous events that we attend – it’s always good to see brokers face-to-face and let them have the latest cutting-edge pen or stress ball as freebies. 

 

What’s the best bit of career-related advice you’ve ever been given? Who gave it to you? 

This comes back to what I said earlier about the importance of empathy in the role – one of my previous bosses told me to always try and put myself in the customers’ shoes when making decisions. It’s a simple concept, but is something that I think many of us could benefit from doing more often. For me, this is helped by the fact that I have been a broker in a previous life, so I understand where they are coming from and the impact it has on the client.

 

How do you keep up to date with developments in the market?

With so much change in the market, influenced by the economic volatility that we’ve seen over the past couple of years, keeping up to date has been a challenge, but is perhaps more important than ever before, or at least during the past decade or so.

At Paragon Bank, we produce lots of useful content, such as a quarterly private rented sector (PRS) trends report and insight on specific aspects of BTL, like portfolio landlords or limited companies.

LinkedIn is also a good resource that helps me stay on top of what’s going on in the marketplace and who is doing what. Online publications such as this one are very useful for getting insights and keeping up to date too.

 

What is the most quirky/unique property deal you’ve been involved in?

Although it’s not one that was in my area, an enquiry from a couple of years ago definitely sticks in my mind because it actually made it into the press.

A new landlord was looking to purchase a property that seemed like an unremarkable but otherwise sound investment for any burgeoning BTL empire – a three-bed house, in a decent location and ideal for families, listed for around £125,000, if I remember rightly.

What made it different, however, was that the property had a body buried in the grounds. 

But, instead of being something unearthed by a very thorough survey, the family managing the estate of the previous owner explained that his final wish was to be buried in the garden of the house where he was born, lived all his life and finally died. 

 

Tell us about your trickiest case as a BDM – what happened and how did you resolve the problem(s)?

I had a large multi-unit block (MUB) enquiry in a prime London location for a 35-unit property.

Also, the limited company that was buying the property had a complicated setup and shareholding. Normally, our maximum is 20 units, but we will always look to find solutions where possible, viewing each case on its own merits and working closely with brokers to answer any questions that the application may throw at us. 

At Paragon, we are lucky that we have our own team of valuers, so I referred the case over to our regional surveyor who covers that area, and he did a lot of research before the application came in. I also referred it to a senior underwriter and, after really getting to know the borrower’s business and becoming comfortable with the company structure, we were able to lend.

 

What was your motivation for choosing this career?

Like a lot of people, I kind of fell into financial services. I enjoy the diversification the industry brings – I have worked for lenders with different types of lending appetite, from adverse to residential and to complex BTL, which I now enjoy. 

 

The art of training, learning and development – Freeman

The art of training, learning and development – Freeman

This educational and practical journey has evolved greatly over the years, with processes steadily improving across the industry to ensure that people of all levels continue to receive the training and support they need to further develop a range of skills that can benefit them and the business.

It’s also interesting to see how the younger generation of the current workforce views this area. Research released towards the back end of 2023, conducted by Cloud Assess, revealed that Gen Z and millennials are prioritising training and development more than any other generation.

In fact, more than a quarter of employees aged between 16-34 believe training and development is the most important factor when it comes to their engagement as an employee.

This offers a clear sign that the workforce of the future values ‘being better’ over monetary incentives, and when looking to induct new talent into the industry, firms would be wise not to ignore these rising demands.

Technology will obviously play a key role within this, although there is a balance to be maintained as this tech focus should not come at the detriment of people-centred learning.

For those operating in a more specialist area, this means that training should be tailored appropriately to arm individuals with the necessary tools to fulfil their potential from both a tech and personal development standpoint.

 

Putting it into practice 

Here at Countrywide Surveying Services (CSS), March represents a busy month for the business and our people with a number of events enabling us to come together for various causes.

The first being a Development Day, which presented an opportunity for those wishing to consider progressing their careers within the people management space. The day involved a variety of different events to include presentation skills, which tests participants’ ability to be able to perform at short notice in front of an unfamiliar audience, a debating session on a topic where they are either asked to be for, or against the subject matter.

In addition to that, survival skills were tested, and finally there was a hands-on challenge involving eggs, which I will leave to your imagination, and they weren’t of the chocolate variety.

Leadership development within our business and succession planning is a core component that we hold in extremely high regard. Given we are a remote workforce, it can be difficult to get to know individuals and understand what range of talent we have within the business, so these days are particularly important. 

Days like these allow us to assess a variety of skills and characteristics. On the back of this, each individual participant is provided with a personalised development plan based on supporting and encouraging further growth and experience within the business.

People will always be a key component in any successful business. This means that continual investment from a training, learning and development perspective in existing members of the workforce should remain a priority, even in the most challenging of times.

After all, everyone deserves the opportunity to further their careers if they are willing to put in the work. 

Interest-only options for pre-retirees – Pearson

Interest-only options for pre-retirees – Pearson

People are living and working longer than ever before, with socioeconomic factors such as the average age at which many people now buy a house and have children all playing a major role in this shifting dynamic.

Rising house prices over the last few decades have seen the average age of first-time buyers increase to 34 years old, according to the Office for National Statistics (ONS), with the knock-on effect being that many people are entering their 50s, 60s and 70s still carrying mortgage debt. 

Similarly, a growing number of the population are choosing to start a family later in life, which means many people are now entering what has traditionally been considered their retirement years with ongoing family commitments such as childcare fees. 

This is having a major impact on how consumers plan for, and live through, their retirement years, with the days of working for several decades and retiring at the age of 60 a thing of the past for many. Similarly, advancements in science mean people are now living longer, healthier lives and spending a greater amount of time in retirement and in the workforce.

Yet despite these shifting social dynamics, the mortgage market has been slow to respond to the changing needs of this demographic, with many product offerings failing to take into account the increasing demand for solutions that cater for these changing needs. 

 

Adapting to the times 

This is particularly true for those borrowers in their pre-retirement years, who, despite being healthy and able to work, face difficulty trying to secure a mortgage after the age of 55.

In many of these cases, these borrowers have been declined a mortgage on the high street due to their age. 

However, we continue to experience growing demand for this type of borrowing, with some of these individuals looking to downsize to a smaller property, while others still want or need to continue working to finance their mortgage, lifestyle and family commitments.

As our lending criteria have no upper age limit, these clients have been successful in securing an interest-only mortgage, as this option can be taken out for up to 35 years regardless of the client’s age at the time of application.

For example, this means that pre-retirees looking to downsize can use the sale of their property to secure an interest-only mortgage with a maximum loan to value (LTV) of 60 per cent, provided they have a minimum amount of equity in the mortgaged property. This ranges from £500,000 in London and £350,000 in the South East and South West to £225,000 in the Midlands and Wales and £200,000 in the North.

There is also the opportunity to combine this with a capital repayment option of up to 80 per cent LTV, subject to the client meeting the minimum equity requirements. In this case, the 60 per cent LTV limit will still apply on the interest-only part of the loan.

Income multiples of up to five-and-a-half times income and loan amounts of up to £750,000 are also available on interest-only mortgages, enabling borrowers to tap into a substantial amount of equity that may have been built up in the property over the longer term. 

In cases where the property is the applicant’s main residential home, interest-only is available up to 75 per cent LTV, with any lending above this limit available on a capital and interest repayment basis only.

If the client does not have enough equity in the property, they can use a percentage of their pension fund – for example, 25 per cent of a £300,000 pension fund (£75,000) – as a repayment vehicle, enabling them to take out an interest-only mortgage of up to £75,000. 

All these options demonstrate the growing flexibility required to support this growing demographic who, though approaching the traditional age of retirement, are not in a position to leave the workforce, remain undecided about the future or want to continue working for the foreseeable future.

And being aware of these options could result in more clients being able to continue working towards their retirement goals while simultaneously earning an income that will help to boost their retirement fund when they are ready to leave the workforce.