Big is beautiful as the saying goes, and when it comes to exhibitions, us Brits have it going on. Just down the road from where I live is the Crystal Palace site, which arguably had the most impressive display of testosterone in the 19th century. All the bigwigs of the day gathered in 1851 under a glass roof to demonstrate the industrial, military and economic superiority of Great Britain.
Lenders this week have been rushing around for our very own version, the Mortgage Business Expo. The setting was West rather than South London, and the products were financial rather than the latest Boneshaker or Penny Farthing (no pun intended). But without doubt it is the one – and arguably the only one – for serious brokers to attend, as virtually every lender and service provider will be under one roof.
The new entrants had to ensure the traditional testosterone stakes were kept high. Preying on mortgage brokers with no preconceptions strolling past, and suggesting that once they try their nano-second online application process there will be no turning back. Let’s suppose they are right – what better place to learn the system than face-to-face. The dummy case – Mr Brown will no doubt have a nasty surprise when he comes to apply for finance and realises he has accumulated 25 credit searches assigned to his name over the two exhibition days.
For rival product developers’ time spent at Expo is like a staff member at Cadbury’s winning a gold ticket into Willy Wonka’s factory. Not only do you have an opportunity to immerse yourself in the latest fads, but also to obtain information to reassure yourself that you are pitching your current pricing correctly. The latter is one of my main criticisms of lenders who generally display the lack of appreciation of the exclusive products available in the market place – preferring to take the simpler research route of benchmarking against lenders’ standard range – ranges that sometimes provide that lender with a fraction of what they actually write. To this end, the Expo has given them a massive opportunity to get closer to the truth – effectively a metaphorical gate to the secret garden – all they need do is don a balaclava and ask vital questions.
Hopefully you ensured that you didn’t demean yourself by succumbing to the opportunity to amass free pens rather than concentrating on the original reason for attending; which is to realise new business opportunities – a trap which so many fall into despite their best intentions.
Above all though, I hope you used this time to air pent-up grievances and wipe slates clean, as lenders do sometimes change – but often they need to be told in numbers to do so.
Mainstream
Giraffe Money, a direct-to-consumer brand of Bristol & West, has appeared on the radar in recent weeks with a five-year fix at 4.95 per cent and three-year discount with a payrate of 4.50 per cent – let’s hope side-stepping brokers is not going to become a strategic feature of the lender.
Bank of Ireland (BoI) has increased the maximum loan to £350k at 100 per cent loan-to-value (LYV) on its parental help mortgage. Leeds BS has increased its guarantor mortgage to 100 per cent LTV on selected products.
Increased income multiples are the order of the day as lenders look to lend more. Abbey has moved to five times joint. BoI 4.5 times joint on selected long-term fixes. Leeds BS is somewhat in the shade with its increase of up to 3.75 times joint, depending on LTV.
BM Solutions hopes it has stepped into Northern Rock Together territory with its Mortgage Plus variant, which, like Northern Rock, combines secured and unsecured borrowing to the tune of 125 per cent LTV. The proc fees are off the Northern Rock pace though, so it will be interesting to see how this pans out.
Buy-to-let
There have been reductions in rental calculations for West Brom for Intermediaries; BoI; London Mortgage Company; Freedom; SPML; CHL and Rooftop to name a few. This has been necessary to combat the hike in rates in recent weeks, and also the realisation that 100 per cent cover, or close to, is now the industry norm.
Thanks must go to the lenders who have given a grace period to get packaged applications in on the rental calculation before the change in the Bank of England Repo Rate.
Self-cert
BoI now accepts ex-local authority houses, while
Kensington has slightly increased the price on its limited distribution specialist prime range.
Adverse
London Mortgage Company now has a distinction from the other Lehman Brothers’ brands as it is offering a solution based on the number of CCJs rather than the amount for the first time. The higher lending charge threshold has also been raised to 85 per cent LTV (backdated to 75 per cent LTV). On the downside, a full, rather than basic credit search now has to be run.
