I am writing this on the day that all of you in the mortgage broking world love and hate with equal measure — the dreaded final day of the month.
It’s that last rush to get everything on the system so you can have a goodwatch month or save an average one.
I am still recovering from the excellent Mortgage Strategy Awards last week, which were good fun as ever and had a great host in Tom Allen. It was a well-needed occasion to let my hair down with the great and the good of the industry — albeit these days my hair just recedes.
If only our dear leaders would take a leaf out of our book
If I did have more hair, I would probably be pulling out loads of it anyway at month end. The pressure seems to be on everyone; not just brokers but admin and sales support staff working really hard, often for the broker to grab the glory (don’t worry, we hear ya and are loving your work), as well as lenders and solicitors for end-of-month completions.
As I write, tonight is that mythical eerie calm that spans the end of one month and the start of another, when everything resets to zero and we go again, optimistically hoping that this month will be as good or better than the last — and so the wheel keeps turning.
A poll run by Martin Lewis found 69% of people would prefer face-to-face advice
It is a relentless job being a broker and last month was a crazy one by any standards. Not just busy, but the added pressure of getting apps into lenders so quickly to reserve the rates for our clients.
Late nights keying, pleading with clients to send in information, system crashes, and the waterfall of emails: have you done this, did you get that, our rates are going in 30 seconds, pricing up, your valuation has come in below the price, please send this again, and the dreaded ‘I’m sorry, you will have to rekey’!
Lenders are working hard as well and we have always applauded that, but some do need to cut the broker some slack too. Of course there will be the odd keying error, a missing doc, etcetera, but you lenders always ask us to cut you some slack when you’re busy, and we deserve the same. The less notice we get, the more rushed by definition we have to be.
It is hard to keep up with the comings and mysterious goings of the lesser-spotted mortgage rate that stays for more than a few days
We’re lucky that most lenders we deal with are fabulous. Broker/lender relationships on the whole are as strong as ever, which really works for the one person who matters — the client.
There is a new generation on both sides who have never experienced a rapid rate-change environment, especially the stresses of an upwards one, and I hope we all take the time to look out for each other, whether broker, admin, lender, BDM or anyone in the process. If we are not calm and smooth, how must our clients feel?
If anyone you know in your company looks more anxious than normal, do approach them — one kind word can make all the difference.
The Help to Buy Equity Loan Scheme will close to new applicants earlier than most thought. I would be surprised if a new or similar scheme was not launched
If only our dear leaders would take a leaf out of our book. While we flog our guts out, they seem more interested in preserving their skins, especially as letters drift in to the Conservatives’ 1922 Committee, stating that Boris should probably go now. ‘Partygate’ continues to float above him like a little black cloud, and the cost-of-living crisis is starting to bite.
Meanwhile, the latest rise in consumer credit reported by the Bank of England will no doubt trigger more alarm bells there. People can take out credit and loans if they are confident, but the worry is this may be because they are seeking extra cash to cover their bills.
What is surprising, given the fact that every broker I have spoken to looks like they need a holiday, is that there has been a drop-off in mortgage approvals. April and May were exceptionally busy, although we expect the combination of weaker borrower sentiment and lenders tightening their affordability to feed through.
You lenders always ask us to cut you some slack when you’re busy, and we deserve the same
It was also interesting to hear housing secretary Michael Gove suggest that lenders could be doing more to lend. Lenders have been lending, and are lending as much as they can within the current constraints of stress testing and affordability limits.
Lenders are playing fairly by the rules that were imposed after the credit crisis over a decade ago. Those offering higher income multiples are doing so within the rules and usually on longer-term fixed rates, or are doing so where affordability has been long established.
Yes, lenders could look at more ways to be innovative, taking rental payment history as proof of affordability, for one. But there is a wealth of options — long-term fixes, family deposit schemes, springboard and lend-a-hand mortgages — designed to help within the regulatory constraints imposed on lenders. Unless we develop something really innovative, like fractional ownership, lenders will struggle to see what they can do further that satisfies risk and regulation.
Most lenders we deal with are fabulous. Broker/lender relationships on the whole are as strong as ever
But it is an interesting debate: what could we do to innovate and lend more, given the current constraints? Answer in the comments section or on a postcard.
In the money markets, three-month Sonia is still smoking upwards, up 0.18% at 1.41%, and swap rates show no signs of easing.
Since the last column:
2-year money is up 0.07% at 2.27%
3-year money is up 0.08% at 2.27%
5-year money is up 0.12% at 2.19%
10-year money is up 0.14% at 2.04%
As usual, it is hard to keep up with the comings and mysterious goings of the lesser-spotted mortgage rate that stays for more than a few days. There are just so many.
Some of the interesting bits include Santander’s new set of 95% loan-to-value rates outside the government’s scheme. All have no arrangement fees and start at 3.34%. It has also moved its criteria for self-employed borrowers, allowing them to borrow up to 90% LTV.
The latest rise in consumer credit reported by the Bank of England will no doubt trigger more alarm bells there
Digital Mortgages is bringing back 85%–90% LTV products, while NatWest is raising its max LTV for foreign nationals who do not have a permanent right to reside, EU settlement status or Irish citizenship, from 70% to 75% LTV.
On any self-employed applications put to HSBC, it now deducts any Bounce Back Loans or Coronavirus Business Interruption Loan Scheme repayments from net profits. It has also introduced an international residential mortgage product range for both new-business and existing customers. The rates for residential applications will differ between UK and non-UK residents.
BM Solutions has followed the Halifax in changing its product transfer rates from a standardised suite to individually priced customer products.
What could we do to innovate and lend more, given the current constraints?
The Help to Buy Equity Loan Scheme will close to new applicants earlier than most thought, with the deadline now set for 31 October. The idea is this will give people enough time to complete by 31 March 2023. I would be surprised if a new or similar scheme was not launched, but watch this space.
Finally, I saw an interesting poll run by the legend, Martin Lewis, which asked, ‘If you needed important financial advice, would you prefer face-to-face or phone/video chat?’ The result was that 69% of people would prefer face-to-face advice.
More strikingly, the results were the same for those under 40 as they were for those over 40. Food for thought.
Andrew Montlake is a director at Coreco
Hero to zero
No FSCS levy to pay for home finance intermediaries in 2022/23 – although this may be temporary, it is good news
Santander for its recent changes and improvements
Government’s ban on ground rents for most new residential leases, coming into force on 30 June
The growing time from offer to completion – this is a worrying trend
Misinformation around improving EPC ratings on your home, like spray foam insulation
Those who still think it is OK to behave inappropriately at industry events, especially around women – the world is changing
What really grinds my gears?
I generally prefer to see the good in everyone; to give the benefit of the doubt and think that any help I give will be appreciated.
I’m lucky to have been helped by some amazing people in this industry, who willingly gave their time, and continue to give, expecting nothing in return. I have always tried to act in the same way, giving time where I can, and I would love to do more.
I love the new breed of people coming through who will be future leaders. They are different, bold and full of amazing ideas. We need to all think about how we can help them, how we can give them confidence and knowledge, and ensure their passion does not dry up as they hit glass ceilings or closed doors.
We all need to do our bit, which is what I love about the new HSBC event for future stars — a great idea.
I hope people remember the time given to them. Those who forget are not likely to impart their time on the next new breed.
It is only by mentoring and offering to listen, talk and just be
there that the future stars will start to emerge.
We all need a helping hand sometimes, whatever stage we are at, so let’s not forget to give back as well as take.
This article featured in the June edition of MS.
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