Dear Sir,
I’m not being overly optimistic but I think I’ve seen the shy re-emergence of something I thought had been extinct for more than 10 years and that is the possibility that being a mortgage broker might be enjoyable; dare I say ‘fun’.
The evidence:
I was approached by a regional director of Intrinsic and during the course of his presentation I was surprised when he spontaneously used the word ‘fun’ as being one of the reasons I should consider joining them.
Even more conclusively, I went to the launch of new packager, Trafalgar Square Solutions, and among the reasons put forward by joint managing director, Michael Franklyn, as to why mortgage intermediaries should use them was that the relationship should be fun – it should be enjoyable to deal with friendly people as you write mortgage business.
Given that the vast majority of mortgage intermediaries are sole traders or partnerships, who have to work with such famously exciting ‘professionals’ as solicitors, bankers and estate agents, then you can see why I am hesitant about fun’s chances of survival.
However, the greatest threat to its existence remains the various rules and laws brought in supposedly to benefit the public but which is in fact gradually doing the complete reverse; diminishing choice, increasing costs and fuelling doubts and uncertainty – a mass of legislation which has produced the same net result that an exam would have.
So I wish Intrinsic and Trafalgar Square Solutions well. Only time will tell if their hopes of re-introducing fun to mortgage broking can survive in the current climate.
Rod Murdison
Proprietor
Murdison & Browning
Remortgaging costs
Dear Sir
The Council of Mortgage Lenders (CML) has revealed that the number of people remortgaging has fallen to its lowest level for five years
Referring to director-general, Michael Coogan’s comments, the reason for a drop in remortgage business was due mainly to very high arrangement fees and administration fees being charged by lenders since October 2004 – the onset of mortgage regulation.
In most cases, when a client has a mortgage of under say £60,000-£70,000, the costs involved in remortgaging this client simply are not worth him moving lenders. This, in turn, means the client is stuck with a lender offering a product that would keep the client, but at an interest rate that is not very competitive.
Dennis Wheeler
Wheelermortgage
A detrimental effect
Dear Sir,
The increase in the Bank of England Base Rate (BBR) to 5 per cent will have a detrimental effect on the housing market for obvious reasons. In addition, we have Home Information Packs (HIPs) to contend with next year; the imminent introduction of which might bring a flood of properties to the market (greater supply equals level or falling prices).
At present, the Monetary Policy Committee does not need to use interest rates to control the housing market and price inflation in this sector. An increase should only be announced if general inflationary pressures are deemed to remain higher than target for too long. With a falling oil price (at present), the current ‘need’ for a rate increase might fade within six months.
Name and address supplied
Turning the financial screw
Dear Sir,
The news that the Base Rate has been increased has come as no surprise to most people in the industry. The previous increase had little or no effect and this latest rise will now start to turn the financial screw.
Most people will now start to realise that the recent increases in council tax, fuel and other household bills are going to have a crippling effect on household budgets. Coupled with this BBR rise, clients on a standard variable rate should, without delay, remortgage onto a lower rate. If they do this and cut back on their spending they will be able to ride this increase without too much trouble.
However the latest plans to increase community tax, especially for people who have a property in an expensive area, could have a devastating and long-lasting effect on homeowners’ finance.
Mike Fitzgerald
Sales director
Brentchase Financial Services
Supply and demand
Dear Sir,
I personally do not see how house prices are going to go into decline when people from Eastern European countries continue to come into the country, increasing the population; which in turn creates more demand for properties.
While there is such high demand for properties, how can they decline in price? It is a simple case of supply and demand.
Stephen Sempie
Firstapproach Mortgages
The wrong time and the wrong place
Dear Sir,
The recent interest rate rise will result in irretrievable damage to all first-time buyers and non-conforming clients.
There is no reason why the rate should increase. It is the wrong time of the year to increase rates if they needed to be increased, and the rise will place many people into serious financial difficulties.
Anne
Via e-mail
Time to lock in?
Dear Sir,
Housing shortages will still drive demand; this increase will cause people to think more about their borrowing capacity and current home owners to lock in to fixed rates more.
Franklyn Birbal
Via e-mail
Who cares about HIPs?
Dear Sir,
So the dry-run of HIPs has begun. So what? Ever since the decision was taken to make Home Condition Reports a voluntary part of the packs, we, and undoubtedly countless other brokerages, have dismissed the importance of HIPs to our business models.
While some firms will, of course, still be banging the drum, urging the industry to take notice of the impending introduction of HIPs, I think that, in their current format, HIPs will either have to be scrapped, or at the very least re-designed.
Although energy efficiency is, of course, an important part of a property, people do not tend to buy a home on this basis alone. So the need for this is negated by the fact that other data for the packs is no longer mandatory. It seems HIPs only serve to show the government’s pledge to energy efficiency, with little care being afforded to the house buying public.
While some will await the results of the dry-run eagerly, government assistance to make the packs free will mean that very little can be garnered from the tests. The real test will be their formal introduction in June 2007 – but somehow, I can’t see that happening.
Name and address supplied
Filling the gap
Dear Sir,
In response to the story ‘Towergate completes Paymentshield purchase’ (Mortgage Introducer Online, 9 November 9 2006), I say good luck to Towergate.
Hopefully this will help Paymentshield fill the gap where we are currently unable to offer cover for properties built before 1850 – many of which are fully modernised and substantial properties. I also hope it helps Paymentshield provide more competitive insurance quotes for buy-to-let properties.
Knowles estate agents
Via e-mail
