Mortgage Strategy
12 August 2002
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'Common sense' not to regulate housebuilders
12 Aug 2002
Brokers say the Treasury's decision not to regulate housebuilders and other third-party introducers - wherever they send mortgage enquiries - is a triumph for common sense. Under the original consultation on mortgage regulation, only those firms that refer clients to independent sources of advice were exempt from regulation. Now the Treasury has confirmed that introductions to any authorised person or appointed representative - "whether independent or otherwise" - will be exempt ...
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30 firms to support adviser.tech
12 Aug 2002
30 major life offices, portals, fund-supermarkets and technology companies have committed to support the second major adviser.tech event, to be held in London on September 5. Five new exhibitors - IntelliFlo, Easylink, Morningstar and Canon UK - will be are using the event as a platform for their launch into the IFA market. Over 450 adviser delegates attended the Manchester adviser.tech launch event in June and more are expected for the London event, to be held in the ...
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35 questions the FSA want answered
16 Aug 2002
The FSA have specifically asked mortgage advisers and other industry figures for their opinion on the below issues arising from CP146. Respondents are asked to send their views to: Louise Beer High Street Firms Division 10th Floor Financial Services Authority 25 The North Colonnade Canary Wharf London E14 5HS Responses can be sent electronically using the form on the FSA's website which you can access by clicking
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A regulatory response A regulatory response
12 Aug 2002
The Treasury's long-awaited mortgage regulations received a cautious welcome last week. The regulations are the outcome of extensive consultation after the Treasury announced plans to regulate mortgage advice alongside general insurance on December 12 2001 (Mortgage Strategy, December 17 2001). Ruth Kelly, financial secretary to the Treasury, announced the new regulations on Thursday. "Buying a mortgage is the biggest financial decision most people will ever make. It's vital ...
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A Scottish apology
12 Aug 2002
From Michael Bolton We apologise for the inconvenience this matter has obviously caused and would assure you that BM Solutions is totally committed to the Scottish market. Our UK-wide network of business development managers is in place to help provide mortgage intermediaries with any advice or support that is required when dealing with BM Solutions - and there is a business development manager dedicated to serving Scottish intermediaries. The team at the BM Solutions National ...
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A taxing problem
12 Aug 2002
From Dr Mark Blakey Recent letters on buy-to-let propositions have debated some interesting fundamentals. Sohan Jheeta (Mortgage Strategy, July 1 2002) talks about interest on capital raised for commercial purposes being treated as an allowable expense that reduces the taxable income on rent received. What wasn't mentioned though, and I would be interested to hear from others more knowledgeable on UK tax law than myself, is what happens to holders of flexible mortgages originally ...
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Abbey National launches new two-year discount
13 Aug 2002
Abbey National have announced the launch of a market-leading two-year discounted rate of 3.85%. The product, available through introducers and Abbey National Telesales from tomorrow, is available to first time buyers, movers and re-mortgage customers and has no extended tie-ins and no compulsory insurance. Janet Connor, director of retail marketing at Abbey National, says: "We are serious about our commitment to providing great quality deals for borrowers. The rates ...
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ABI calls conference on liability insurance
12 Aug 2002
The ABI (Association of British Insurers) is calling a half-day conference in early September for all interested trade associations to discuss how best firms can access the liability insurance market. The British Insurance Brokers Association (BIBA) has agreed to co-host the event. The purpose of the conference will be to explore all the options in the marketplace, and the role that risk management can play in helping customers through current difficulties. This will also be ...
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Aim for a soft landing
12 Aug 2002
From Mark Howell It was with interest that I read your comments regarding the tendency of sub-prime lenders to box customers into light, medium and heavy adverse categories, resulting in borrowers paying for credit problems they may not have. Pink Home Loans recognised this fact some time ago and developed a product designed to avoid this situation arising. The Parachute Mortgage, a collaboration between Pink and Amber Homeloans that launched 18 months ago, ensures that rates ...
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Arsenal tie up deal with Bank of Scotland
16 Aug 2002
Arsenal has teamed up with Bank of Scotland to launch the 'Your Financial Arsenal' range of financial services Your Financial Arsenal will also give supporters of the club the opportunity to show their affinity to Arsenal and gain from a range of exclusive benefits. Thousands of fans already carried Arsenal-branded credit card issued through Bank of Scotland since 1998 and a new five-year deal with Bank of Scotland will continue the affinity financial services relationship.
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Authorisation, supervision, enforcement powers laid down
12 Aug 2002
The FSA has laid out its full framework of powers and responsibilities in Consultation Paper 146, detailing the process of how firms can register and, where appropriate, be punished. The FSA has already set out its plans for the authorisation process in the Authorisation Manual, which forms part of the FSA Handbook, and firms will need to apply for authorisation ahead of the start of the mortgage regulatory regime in mid-2004. The regulator says it will give due credit ...
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Bradford & Bingley renews sourcing deal with Mortgage Brain
16 Aug 2002
Bradford & Bingley plc has announced the renewal of their mortgage sourcing systems with Mortgage Brain. The Bradford & Bingley Group is the largest provider of independent financial and mortgage services in the UK, and houses both the MarketPlace and Charcol brands. Mortgage Brain has been reselected as the exclusive external mortgage sourcing engine following a review of the market, Mortgage Brain will be accessed regularly by an estimated 1,000 professional advisors within ...
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Bristol & West launches five-year fixed rate
13 Aug 2002
Bristol & West Mortgages today launches the lowest five-year fixed on the market , with a headline rate of 4.89% . The product reverts to Bank of England base rate plus 1%, has no extended redemption charges and is available up to 95% LTV, with no restrictions on who can take out the offer. The product carries a redemption charge of 7% until September 30 2003, 6% until September 30 2005, and 5% until September 30 2007, with a £299 arrangement fee. Neena Kitheroy, ...
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Buy-to-let left out of regulation loop
12 Aug 2002
The Treasury has ruled out regulation of the buy-to-let mortgage market. It is sticking to the view that buy-to-let mortgages constitute a commercial transaction - despite calls from consumer bodies, lenders and intermediaries that the sector should be regulated. The Treasury says it "believes that the definition of a mortgage is the right one and that there should be no changes". But Kevin Paterson, director of Park Row Independent Mortgages, says: "Buy-to-let should come ...
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CIS target women's memory for home options policy sales
16 Aug 2002
Research conducted by leading financial services provider Co-operative Insurance Society (CIS) found that women have better memories than men when it come to remembering important dates. The research, which questioned people of both sexes from across the country, found that almost twice as many men forgot their wedding anniversary as women (14% v 8%), a third more men rely on someone to remind them of important dates compared to women (9% v 6%), while almost a third more men ...
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Consistent regime wanted
12 Aug 2002
The Treasury has responded to broker demands for more consistent regulatory regimes by agreeing to explore the links between CP121 and mortgages, writes Harriet Williams. The government admits that the finalising of mortgage regulation ahead of changes to the polarisation regime is "unhelpful timing". But brokers say the FSA will have enough time to take account of the finalised polarisation regime before drafting final rules for mortgage regulation. Rod Murdison, proprietor of ...
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Correspondent lending written into regulatory plan
12 Aug 2002
Correspondent lending will be regulated after N3, writes Harriet Williams. Classing correspondent lenders as a type of packager, the Treasury said their business would fall under the regulated activity of "arranging". Nigel Gardner, operations director of Genesis Home Loans, says: "I don't think this announcement will surprise anyone and anyone who thought any part of the mortgage process would be left unregulated is a little naïve. Now it's just a question of how the ...
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Correspondent lending written into regulatory plan
12 Aug 2002
Correspondent lending will be regulated after N3, writes Harriet Williams. Classing correspondent lenders as a type of packager, the Treasury said their business would fall under the regulated activity of "arranging". Nigel Gardner, operations director of Genesis Home Loans, says: "I don't think this announcement will surprise anyone and anyone who thought any part of the mortgage process would be left unregulated is a little naïve. Now it's just a question ...
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Crystal Clear brokerage launched
12 Aug 2002
Homebuyers will be offered fee-free and independent mortgage advice later this year with the launch of nationwide master-brokerage Crystal Clear Mortgages. Though it will not have a formal panel, Crystal Clear is in talks with over 20 lenders including Scottish Widows, Standard Life, Halifax, Abbey National and Birmingham Midshires as it prepares to launch the service. Crystal Clear is the first brokerage to enter into an agreement with third-party outsourcer Marlborough Stirling ...
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Endowment fund reaches 160% guarantee ratio
12 Aug 2002
The Endowment Growth Fund (EGF) advised by TEP market maker PolicyPlus, has achieved a guarantee ratio of 160% of net asset value, despite recent periods of great stock-market volatility. Investors who have made an investment of £100,000 will now be covered by £160,000 of guarantees in sums assured plus attaching bonuses. Since its inception in December 1998, EGF has achieved a growth of 17%, against a total fall of 28% in the FT-SE 100 Indx over the same ...
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Equity release "high-risk product" says FSA
12 Aug 2002
The FSA has proposed that different types of mortgage carry different levels of risk in CP146, its latest consultation paper on mortgage regulation. The FSA proposals include assigning different levels of risk to different products, with equity release - or lifetime mortgages in FSA parlance - included within the higher risk bracket. Mortgages where the term is limited to 12 months or less and mortgages for £10,000 or less are identified as lower risk. Flexible, ...
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Equity release market increases by a third
15 Aug 2002
Older homeowners released more than £313m from their homes in the first six months of this year as the equity release market continues to grow. New figures from SHIP (Safe Home Income Plans), which represents the major equity release providers, show that the total equity release market was 33% higher in January to June 2002 compared with the same period last year, with Norwich Union seeing a 39% increase in its market share. Figures from SHIP show that sales of ...
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Fees now need a level playing field
12 Aug 2002
Much has been written about the growth in sub-prime lending, particularly the number of new entrants and consolidation activity in the market. Increasingly, we are seeing lenders in this market receiving the backing of their bigger, mainstream cousins. And, of course, we are seeing higher-profile entrants into the market from lenders with a good heritage and trusted brand, such as Bristol & West and Birmingham Midshires. Many lenders either already have, or are certainly intending ...
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First Title appoints new business development director
14 Aug 2002
First Title, provider of title-related services, has announced the appointment of Phillip Oldcorn as underwriting and business development director. Oldcorn was previously involved in developing First Title's commercial property title insurance services. First Title, a wholly owned subsidiary of the First American Corporation, counts Halifax, Alliance & Leicester, GMAC-RFC, Intelligent Finance and the Woolwich among lender clients and has lawyers based in First Title's ...
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Fiver fee 'carved out'
12 Aug 2002
Fee-charging brokers are looking forward to the Treasury's pledge to "carve out" Section 155 of the Consumer Credit Act - the cap that stops them charging more than £5 for advice not leading to a mortgage contract. The Treasury acknowledges there are occasions "when the appropriate advice is not to take out a mortgage" and could pave the way for brokers to claim fees that reflect this. Kevin Morgan, managing director of Hertfordshire-based EZI UK, says: "This is excellent ...
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FSA CONSULTS ON MORTGAGE REGULATION
12 Aug 2002
The FSA has published its consultation on proposals for regulating mortgage sales. The consultation closes on November 11 2002. The paper is the first in a series of consultations, which will see mortgage sales regulated from around mid-2004. Sarah Wilson, director of the high street firms division, says: "For many consumers, taking out a mortgage is one of the most significant financial commitments they will make in their lifetime. "We want to make sure that ...
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FSA draws line between 'advice' and 'non-advice'
12 Aug 2002
The FSA has identified three types of sales process in the mortgage market. These distinguish between advice and non-advice, and as such will attract different regulatory responses. The three sales processes are: advised sales - here, the FSA proposes to use the definition of advice set out in the legislation, that is, advice on the merits of taking a particular mortgage non-advised sales using filtering questions - where the lender ...
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FSA extend guidelines on training and competence
12 Aug 2002
The FSA has proposed that guidelines on training and competence previously set down for lenders will be extended to all firms which advise on or arrange mortgages. The FSA has already set out its approach to training and compliance in the Training and Competence Sourcebook, which includes commitments to maintaining reasonable levels of responsibility and competence among individuals. In earlier consultations, the regulator concluded that only mortgage lenders and administrators ...
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FSA issue new rules for financial promotions
12 Aug 2002
The FSA has spelled out plans for simplifying rules for the financial promotions for the provision of qualifying credit. The FSA issued guidance on what constitutes financial promotion in brochures, advertisements, websites and telesales calls in May. CP146 says a number of exceptions will be made that will not be subject to new rules, including general advertising and product literature. Sections of the Financial Services and Markets Act say a person must not publish ...
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FSA outlines initial disclosure format
12 Aug 2002
The FSA is proposing that firms provide consumers with an initial disclosure document, telling consumers not only what the firm is able to offer them, but also what it cannot. This is designed to allow the consumer to make an informed decision about whether to use a particular firm before deciding to go ahead with the transaction. The document will tell the consumer which level of service the firm provides; which lenders the firm deals with; whether the firm charges for ...
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FSA publishes near-final post-sales rules
12 Aug 2002
The FSA has published near-final post-sale rules - the only part of the draft rules presented in CP98 to survive the last year's decision to extend the scope of mortgage regulation to include mortgage intermediaries. Draft rules in CP98 related only to lending and administration, but the FSA says the "change in scope of mortgage regulation does not affect our post-sale proposals". In its just-published Policy Statement on CP98, the FSA gives the scope of post-sales ...
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FSA seeks to define independence in the mortgage market
12 Aug 2002
The FSA is consulting on whether it should place requirements on firms in the mortgage market who choose to call themselves 'independent' and, if so, whether this should apply to both advised and non-advised sales. It also considers whether firms should adopt a different status in relation to different regulated products, for example, being independent for mortgages but only selling investments from one product provider, and whether firms should be able to change their ...
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FSA to boost consumer protection
12 Aug 2002
The FSA intends to introduce a rule on excessive fees for mortgage advice or arranging, similar to the excessive charges rule that exists for investment business. This will set standards for the prevention of high-pressure selling, excessive charges and inducements. The FSA has proposed that a responsible lending rule remains valid for non-advised sales, but suggests that it should not apply to advised sales as the proposed suitability requirements will require that the ...
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FSA unable to rule out some dual regulation
12 Aug 2002
The FSA has outlined the scope of the mortgage regime, but warns that some firms will still need a consumer credit licence. To avoid dual regulation, mortgages that meet the definition and which could presently be regulated under the Consumer Credit Act (CCA) will become the FSA's responsibility when the new regime goes live. However, if firms which arrange mortgages within the definition (and which require FSA authorisation) also arrange second charge loans and other ...
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FSA urges firms to up their game
16 Aug 2002
FSA-regulated firms have been reminded of the need to check their organisations to ensure comprehensive and robust plans are in place to deal with potential disruptions to its operations. Michael Foot, a managing director at the FSA, says: "It is essential that all firms in the financial services sector ensure that they are properly prepared. None of us can afford to be complacent about the challenges that inevitably arise in an environment where the potential threat is so great." Since ...
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GMAC-RFC launches two-year fixed rate
12 Aug 2002
GMAC-RFC has launched a new two-year fixed rate deal at 5.74% for the non-conforming sector. GMAC Residential Funding is offering two fixed rate options. The first is at 5.74% up to 90% LTV, adverse credit allowed, up to £3000 CCJs in the last three years; up to two missed payments in the last 12 months or one in the last six months. The second offers 5.99% up to 85% LTV, adverse credit allowed, up to £7,500 CCJs in the last three years; up to three missed ...
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Home reversion plan omission warning
12 Aug 2002
Brokers have warned that the Treasury's decision to leave home reversion schemes out of FSA regulation could cause consumer detriment and confusion. The Treasury does not consider that is has the power to give the FSA responsibility for regulating home reversion products - a type of equity release scheme that involves the sale of the property by the 'borrower' to the person providing the finance. The Treasury says this is because they are not financial services products ...
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IF you want an offset account with flexibility
12 Aug 2002
INTELLIGENT FINANCE Intelligent Finance fully launched in November 2000 and, with half a million accounts, is now the UK's number one direct bank in the UK. The bank has attained 10.4% of UK net mortgage lending in its first 18 months of trading, with around 76% of the mortgage business placed by advisers - reflecting the bank's focus on the intermediary marketplace. The bank employs around 2,500 at its three Scottish locations in Edinburgh (pictured above), Livingston and its ...
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Industry questions Treasury's 'modest' costs
12 Aug 2002
The Treasury says that it will take into account the cost of implementing the regulatory regime for both lenders and brokers, writes Helen McCormick. Most respondents agreed advice should be regulated - provided the approach taken by the FSA was "proportionate". But many believe that it is not possible to state categorically "that the costs of changing from one system to another will be relatively modest". Mike Fitzgerald, sales director at Brentwood-based IFA Brentchase Financial ...
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Industry welcomes Treasury's regulatory changes
12 Aug 2002
Intermediaries have broadly welcomed most aspects of the Treasury's final legislation on the regulation of mortgage advice - especially the exclusion of introducers from the regime. Patrick Bunton, head of operations and compliance at London & Country, says that rules on introducers and packagers "make perfect sense" and is pleased the Treasury has deferred judgement on the implications of polarisation. Mike Fitzgerald, sales director at Brentchase Financial Services, says: ...
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Intermediary response
12 Aug 2002
Sohan Jheeta, director of Personal Investment Planning Service, says the client's CCJs will make for an expensive mortgage and he will also need to save for arrangement costsQuestions should be asked as to how Mr Harris came to be saddled with three CCJs in the first place if his income was anywhere close to the £45,000 per annum he currently earns. It would seem to me that Mr Harris needs coaching in the disciplines of money management. ...
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Lambeth lower five-year fixed rate
14 Aug 2002
Lambeth Building Society has replaced its current five-year fixed rate of 5.59% with a new five-year fixed rate of 5.25% (APR 6.0%). Despite the change, the new deal retains a maximum LTV of 95%, no extended tie-ins or redemption charges, and a £95 application fee with a £295 reservation fee upon completion. The offer is available on repayment, endowment, ISA or pension-linked policies.
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Leeds & Holbeck alter fixed rate deals
16 Aug 2002
Leeds-base mutual Leeds & Holbeck's has changed its 4.99% three-year fixed rate mortgage. Early repayment charges have been abolished and the completion fee has been reduced by £100 to £299. The mortgage is available up to 95% LTV, with no mortgage indemnity fee on loans up to 90%LTV. Borrowers can make unlimited capital repayments and are not locked in at any time to the deal, whose fixed rate applies until November 1 2005. Leeds & Holbeck has ...
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Leeds & Holbeck launch new 5-year fixed
12 Aug 2002
Leeds & Holbeck has launched a new 5-year fixed rate mortgage free from completion or higher lending fees and without any lock-ins. The mortgage is available at 5.49% for loans up to 90% of property value or 5.89% up to 95%. o Key product details are: o No mortgage indemnity fee up to 95% loan-to-value o Unlimited capital repayments o No early repayment charges at any time o No completion fee o Free in-house legal services for re-mortgages o No ...
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Lender response
12 Aug 2002
John Maltby, chief executive of Kensington Mortgage Company, says that rising property prices will open up more options to Mr Harris when he comes to moveMr Harris' previous credit history and his inability to prove his income means that he is unlikely to obtain a mortgage from a mainstream lender, even though he requires a low income multiple in relation to his anticipated earnings. He will, therefore, need to obtain a mortgage from a specialist ...
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Lenders accused of profiteering on protection insurance
15 Aug 2002
A survey of the UK's ten largest mortgage lenders reveals that, while falling over themselves to offer keenly priced mortgage deals, the same cannot be said about insurance and MPPI products. The survey, conducted by Essex-based protection broker Goodfellows, found that the average cost for key benefits including 60-day excess, 12 months benefit, no free cover, no portability, and no unemployment-only cover, was £5.80 per £100. Goodfellows own Mortgageprotection ...
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MCCB welcomes 'grandfathering' of mortgage qualifications
12 Aug 2002
The MCCB has welcomed the publication by the Treasury of the Regulated Activities Order and also the FSA's consultation paper (CP146) on its high-level approach to implementing regulation and "near-final" rules on information disclosure requirements. The MCCB will be studying the 350 plus pages of CP146 in great detail and will respond to the consultation in due course. Its initial reactions to CP146 include a welcome to the proposal to implement clear "grandfathering" ...
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Mortgages may come within compensation scheme
12 Aug 2002
The FSA is considering whether to include firms that advise on or arrange mortgages within the Financial Services Compensation Scheme. In CP146, the FSA says "the extent of potential detriment to individuals arising from poor mortgage advice is not trivial". The FSA seeks comment on the maximum amount of compensation that might apply, and the practicalities of including mortgage advice and arranging within the FSCS. The FSA sticks by its CP98 conclusion that ...
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My Mortgage Week - Brian pitt
12 Aug 2002
Monday: Disaster strikes first thing this morning - my electronic personal organiser decides to reset to January 1 1999, thereby wiping off all my databases and appointments. I'm forced to revert to the back-up plan of the cumbersome desk diary and stacks of business cards. The main meeting of the day is - I hope - with Mark Abbott, our CEO, to start the process of setting up our business plan for 2003. There's nothing like getting ahead of the game. Tuesday: Today we welcome ...
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New appointment at First Title
12 Aug 2002
First Title, a provider of title related services, has appointed Phillip Oldcorn as underwriting and business development director. For the last few years, Oldcorn has developed First Title's commercial property title insurance services. First Title is now a leader in this market with a large team of lawyers based in First Title's offices in London, Glasgow, Edinburgh and Dublin. Oldcorn says: "Over the last few years, First Title has developed a range of title ...
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New legal appointment at Cheltenham & Gloucester
14 Aug 2002
Cheltenham & Gloucester has announced the appointment of Noel Riossi to the position of commercial lawyer. Riossi joins C&G's in-house legal team, where his main responsibilities will include the negotiation and approval of external contracts, data protection and property issues. After qualifying in 1987, Riossi spent two years in private practice in the Midlands before moving to Gloucestershire and taking an in-house position with the Nationwide Building Society ...
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New rules on business loans
12 Aug 2002
The FSA has reviewed its earlier plans for the regulatory status of business loans, proposing a "lighter touch" regime for lower risk business loans. The regulator says in its latest consultation paper 146, that contracts for a limited term of twelve months or more and contracts for a limited amount, suggested as £10,000, should be subject to less regulation than residential mortgage contracts. Since only a small number of firms offer advice on business loans, the ...
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Northern Rock announce xit2 deal for online valuations
14 Aug 2002
Northern Rock has tied up outsourced process management outfit xit2 to provide an online valuation service. xit2's Valuation Exchange enables Northern Rock to quickly complete valuations and offer a better service to its IFA network and customers. The lender recently went live with the solution following a six month pilot. Richard Barclay, head of credit at Northern Rock, says: "The valuation is a critical part of the mortgage offer process. The quicker the valuation ...
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Packagers query Treasury's proposals
12 Aug 2002
Treasury plans to regulate some packagers but exclude others have been met with disbelief. The Treasury confirmed it will not amend proposed legislation to take account of packagers. But it does identify four types of packager in a bid to clear up widespread confusion over their regulatory status. Mortgage clubs and mortgage packaging companies providing lenders with administrative support will not be regulated. But the Treasury says that broker packagers - defined as those offering ...
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Party is over for Londoners says CEBR
16 Aug 2002
Londoners could face falling house prices, job losses, and non-existent bonuses, the Centre for Economics and Business Research predicts. The projected rate of GDP growth for 2002 was revised down from 1.9% in February to 1.4% in May. In the latest forecasts it is revised down further to only 0.7%. Next year will provide no respite for the capital either, with consumer services and the City continuing to be weak and growth reaching just 0.5%. The latest downward ...
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Pink release new buy-to-let fixed rate
15 Aug 2002
Pink Home Loans has launched a new, exclusive buy-to-let mortgage funded by Mortgage Express. The product is fixed at 5.85% until September 3 2007 and is available up to 85%LTV. Investors can use the exclusive 'choices' flexible feature to overpay up to double the monthly payment even during the five-year fixed rate period. The overpayment can be used to take a payment holiday at a later stage which can be useful if the property remains empty for a month or two ...
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Pre-application illustrations here to stay
12 Aug 2002
The FSA's consultation on regulating mortgage sales confirms that controversial pre-application illustrations are here to stay. The need for a personalised PAI for each mortgage applicant was originally proposed in CP98. In its latest CP146 consultation, the FSA says: "We consider that the principle behind this approach to product disclosure still applies. "This is that consumers need to be provided with product information at an early stage in the process, in a consistent ...
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Preferred Mortgages adopts Lynx banking solution
12 Aug 2002
Lynx Financial Systems has announced that Preferred Mortgages has purchased Summit, the modular retail banking solution from Lynx. Preferred has also purchased the Lynx debt management system, Portfolio Collect. The Lynx systems aims to further improve customer service levels to borrowers and to intermediaries, including mortgage brokers, mortgage packagers and IFAs. Phil Hopes, financial director of Preferred, says: "We recognise how vital IT is to our future success ...
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Protection sales up for Legal & General
14 Aug 2002
Legal & General have announced that its sales of protection products increased by 88% in the first half of this year. Annual premium sales of protection products such as term assurance and critical illness stood at £70m in the first half, compared to £37.3m in the first half of 2001. L&G capitalised on the growth in demand for repayment mortgages by continuing to offer protection products, with IFAs and business partners able to focus on clients' needs for life ...
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PS106 set to unlock TEP market
13 Aug 2002
The traded endowment market is expected to receive a major boost in September when FSA rules on client advice. Under policy statement 106, endowment policyholders seeking information on surrendering a policy will be made aware of the option to sell it from September 1. TEP outfit Surrenda-link estimates that a potential £15m in commission could be unlocked in additional policies being traded through the TEP Market. Matthew Roche, marketing manager at Surrenda-link ...
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Repent sinners
12 Aug 2002
From Frank Hughes Ian Griffiths' letter about Abbey National (Mortgage Strategy August 5 2002) did strike a chord with me. I've not been wild about Abbey National since, admittedly a few years back, I lost over £2,000 in fees and commissions as a result of its incompetence. An established self-employed client was moving from High Wycombe to Southampton. I had recommended a loan for him, but the estate agent in Southampton said he could have a certain deal through Abbey ...
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Rightmove to launch real-time property report
15 Aug 2002
Property website Rightmove will issue its first ever Real-time Property Report on Tuesday. The report's 'Asking Price Trend' is based on asking prices of properties marketed by Rightmove's 2,900 member estate agents, setting the report apart from other house price indexes as it will act as an indicator of where the housing market is going, rather than what has happened in the past. Rightmove covers some 30% of all estate agents and showcases a stock of about ...
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RJ Temple launches lifeline to benefit clients and charity
13 Aug 2002
IFA RJ Temple PLC has kicked off a campaign to save clients money and benefit the Southern Africa Crisis Appeal. The Lifeline campaign offers people a free quotation service for life assurance. For each quote that is lower than the person's current premium, RJ Temple will donate £10 to the charity appeal. Even if it cannot come up with a cheaper policy, the company will donate £2. Ian Millward, marketing director at RJ Temple, says: "We are delighted to ...
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Scottish Life Mortgages ties up Bristol & West deal
13 Aug 2002
Scottish Life Mortgages (SLM) has announced an exclusive 4.79% discount deal with £1,000 cashback through Bristol & West. The product is available up to 95% LTV at 1.16% below SVR for 48 months with no extended tie-ins. Steve Scholes, director of SLM, says: "Brokers want good discount deals with no extended tie-ins. The £1,000 cashback gives the client the choice of what they wish to spend it on, whether that is £250 towards legal fees and £250 ...
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Skipton creates information arm
15 Aug 2002
Skipton Building Society has announced the creation of the Skipton Information Group, a separate business information arm. The new body will be made up of its consumer credit reference agency Callcredit, database marketing company EuroDirect, market analysis firm GMAP Consulting, and e-commerce software business CAST Systems. David Coates, managing director of Callcredit, says: "Increasingly our clients, many of whom are in the financial services sector, require information ...
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Smaller manufacturers see decline in output, says CBI
12 Aug 2002
The steady decline in orders and output for small and medium-sized manufacturers continued over the last four months, with expectations of a turnaround failing to materialise, a CBI survey has found. The fall in output reported by small and medium-sized enterprises (SMEs) reflects the general pattern for all UK manufacturers, while SME orders fell more sharply than those of larger manufacturers. 22% of SMEs said total new orders were up over the last four months, 38% ...
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Solicitors will need mortgage status
12 Aug 2002
Professionals such as solicitors will need authorisation or appointed representative status if they recommend a particular mortgage product under new legislation from the Treasury. Most respondents to the Treasury's consultation paper agreed that solicitors undertaking conveyancing should not be required to be authorised merely because they offered general advice to the borrower, but that they should if making a positive recommendation of the products of a particular lender. But ...
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Speaking your language
12 Aug 2002
Name and address supplied To be said in Samuel L Jackson style of speech… "Can I help you?" he said. "Nice advert," I said. "You bet," he said. "What's it about?" I said. "You can't find meaning in the script," he said. "Talk straight," I said. "Or the location," he said. "This advert," he said, "is almost like nothing's being said." "Cat sure ain't got your tongue, so explain it," I said, "as you see it," I said. "I could talk ...
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Staffordshire Building Society launches flexible deals
13 Aug 2002
Staffordshire Building Society has launched two new flexible mortgage products in its first foray into the flexible market. The products are available for first-time buyer, home movers and remortgages, have rates starting at 4.74.% for five years. Staffordshire's first product is a 1% discount rate off the Society's 5.74% SVR for two years, with free accident, sickness and unemployment cover for six months subject to status. The offer also carries a free valuation ...
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The future has finally been revealed
12 Aug 2002
Last Thursday the Treasury published new legislation for mortgage advice after extensive consultation with the industry. As we reveal across five pages of news, starting on page 4, and five pages of in-depth analysis, starting on page 18, the new mortgage regulations have prompted a mixed response from every sector of the market. Some pundits seem happy with the final content and some, predictably, are not so happy. But in the words of Ruth Kelly, financial secretary to the Treasury, ...
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The mortgage mole
12 Aug 2002
Mamma Mia Mole and his other riverbank chums decked themselves out in blonde wigs and lycra bellbottoms and were treated to a night out at Mamma Mia, the West End musical based on the rare talents of ABBA. Our sequinned hosts were Hamptons International and Square Mile Mortgage Finance. One broker confessed that he had only been out with journalists on one other occasion in the past 12 months and that was with one of Mole's Mortgage Strategy colleagues. "It was a nice lunch," he ...
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This weeks problem case
12 Aug 2002
Mr Harris has worked as a self-employed IT contractor for six months. He expects to earn £45,000 in his first year but does not have audited accounts to prove his income. He has three CCJs totalling £1,800, which were registered seven months ago prior to his first contract. They remain unsatisfied. He is looking to buy a flat for £95,000 and has a deposit of £10,000.
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Timetable for mortgage regulation
12 Aug 2002
As shown in the timetable below, the consultation paper on regulating mortgage sales is the first of a series that will set out FSA proposals for regulating mortgage and general insurance sales. The proposals are of two kinds, some relating to firms' conduct during a mortgage transaction, and others relating to firms' ongoing status as an authorised firm (or appointed representative). Consultation timetable for mortgage regulation Approach ...
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Treasury advice definitions are 'final'
12 Aug 2002
The definition of advice in the consultation draft of the Regulated Activities Order is final, says the Treasury. Strategic or generic advice will not be regulated following the format for investment advice and only advice on the merits of a particular mortgage will be captured. The Treasury registers the concerns of respondents who sought greater clarity between advice and information. It says that merely "matching the consumer's preferences and expectations to the products ...
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Treasury releases regulation update
12 Aug 2002
The Treasury finally published its overdue legislation for mortgage advice last week. Ruth Kelly, financial secretary to the Treasury, says: "Buying a mortgage is the biggest financial decision most people will ever make. It is vital that they make the right choice - these regulations will make it easier to do that. We will not be consulting on the regulations further in order to allow the Financial Services Authority to begin consulting on their implementation." The FSA's paper ...
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Treasury takes CAB to different level
12 Aug 2002
The Citizens' Advice Bureaux, money advice centres and charities will not fall within the regulated mortgage regime as they are not carried on "by way of business". While many respondents to the latest consultation on mortgage regulation agreed that money advice agencies should not be regulated in principle, some say a specific exclusion will have to be written into the legislation. The Treasury acknowledges that it "cannot say categorically that all money advice centres, the ...
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Umbrella extended to cover mortgage intermediaries
12 Aug 2002
Intermediaries who advise and arrange regulated mortgage contracts will be covered by the appointed representatives regime from 2004. Last Thursday, the Treasury said respondents to the original consultation document had no fundamental objection to extending the regime to mortgages. But it did say many were concerned with the detailed rules that may surround the regime. A Treasury spokesman says the matters will be covered in greater depth in the Financial Services ...
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What will the CML do?
12 Aug 2002
From Shelia McKechnie An open letter to Michael Coogan, director-general of the CML from the Consumers' Association I am sure you are aware of the long-running scandal of usually elderly consumers left with ever-increasing levels of debt accumulated through the mis-selling of equity release schemes, particularly Equity Home Income Plans, in the late 1980s and early 1990s. We remain very concerned about the victims of this forgotten financial scandal as many of them remain heavily ...
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Why technology is the way forward
12 Aug 2002
Each July, since the introduction of CeMAP in January 1998, the Institute of Financial Services has updated the contents of its study manuals. This year is no exception. Exams set on and after September 1 will be based on the revised study manuals. A more significant change is the move away from paper-based exams to exams that are delivered electronically in partnership with Prometric Thomson Learning. A further change is that paper three and the bridge paper are now based upon a multiple-choice
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Woolwich launches new lower fixed rate mortgage
12 Aug 2002
Woolwich has launched a new two year Openplan flexible fixed rate mortgage of 4.49%. This two year fixed rate (fixed rate term ends 31 October 2004) has been reduced from 4.89% to 4.49%, making this one of the lowest rates available in the market. Andy Gray, head of mortgages at The Woolwich, says: "Fixed rate mortgages are increasingly competitive and this deal is one of the best about in the market. It offers customers an alternative to a discount mortgage especially ...
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Younger buyers sustain property market
14 Aug 2002
People in their 20s are driving property market, with one in four looking to buy a home within the next two years. Despite homebuyer confidence falling to its lowest levels since its moving improving index began, Alliance & Leicester says 20-somethings represent the largest group in the UK with the intention to buy. Only 11% of those questioned are planning on buying a home in the next two years, down from 15% a year ago. Intentions to move in the next 12 months have ...
