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Industry says tightening of affordability rules was unnecessary…

The Bank of England last week announced that it had tightened mortgage affordability rules to prevent loosening underwriting standards and said this would cause some lenders to raise interest cover ratios. But the industry felt the Bank’s focus was misplaced…

As usual we have decision makers deciding that it isn’t broke but, never mind, we will fix it anyway.

Yes, everyone working in the mortgage industry knows that the Bank base [rate] can rise, and so can lenders’ variable rate. If and when that happens, a sensible review should be carried out for clients by an independent broker every two years as a matter of course.

There are plenty of ways of coping with a rate rise, including extending the term, reducing the rate and downsizing.

As well as rate rises, what about the client who loses their job and has to take another one with a smaller salary? Or the clients who decide to have children and go from two wages down to one? Or the client who fancies a new car and takes out an expensive loan shortly after completing their mortgage that only just passed the affordability test?

Lots of things can happen in life to change a client’s income or expenditure and we will never find a foolproof way of ensuring no one ever falls into financial difficulty when one of these changes occurs.

Carl McGovern

…and BoE should worry more about ‘cowboys’ in unsecured lending

I guess this is what we should expect from those in their ivory towers. Maybe they should start to look at the areas of genuine concern to most mortgage brokers, namely the cowboy attitude of the credit card providers.

I have lost count of the number of clients I have seen who have at least two cards with a £15,000 limit and are struggling to repay a total of £5,000.

How do the geniuses at the card companies think, if a client is struggling to repay £5,000, they would manage were they to max their cards with a total of £30,000 to repay?

Maybe, just maybe, the unsecured industry needs a proper shake-up before things really get out of hand.

Grumpy Old Broker

Unite union gives ‘cautious welcome’ to Co-Op Bank’s rescue

The union representing Co-operative Bank staff welcomed news that the bank had secured funding of £700m to save it from being sold…

The Unite union is cautiously welcoming this announcement as it ends a long period of uncertainty that has been difficult for the workforce.

Throughout this challenging period, the bank staff have continued to show their professionalism and commitment to the Co-operative name. Unite is pleased that the future of the Bank appears protected as it continues to stand alone rather than be broken up and sold off in pieces. It is vital to the workforce that the Co-operative’s name, ethics and values will be safeguarded.

Unite will meet with the chief executive this week to seek assurances on what the deal will mean for our members in the long term, including job security assurances and pension protections.

Rob MacGregor



Borro withdraws from bridging market and announces new CEO

Secured lending specialist Borro has announced that it will withdraw from the property bridging loan market due to overcrowding of the market and ‘decreasing property values.’ The specialist lender has said it will now concentrate on its luxury asset finance activities. The move follows the resignation of chief executive and founder Paul Aitken last month. […]

Brokers and lenders to get FCA fee cut

Mortgage brokers and lenders will see their 2017/18 FCA fee fall 4.7 per cent, according to documents published this morning. The FCA says brokers in the A18 fee block will see their fees fall 10.6 per cent from £18.2m in 2016/17 to £16.3m in 2017/18. Mortgage lenders that are only regulated by the FCA will […]

Principality increases LTV on remortgage products

The intermediary arm of Principality Building Society has increased the maximum loan-to-value available on a range of its remortgage products. The society will now offer LTV of up to 90 per cent on fixed two, three and five-year deals, an increase from the 85 per cent maximum LTV previously offered. Rates start from 2.20 per […]

Keep calm and carry on?

We British are known for our stiff upper lip and just getting on with things. It’s part of our quirky cultural behaviour – like forming orderly queues, or saying sorry when it’s not our fault. Many of us just aren’t that great at talking about what’s bothering us. But if someone feels that the stresses […]


Out from the long grass? An IT and NI merger

Those with a long memory will recall that at the start of the last parliamentary term George Osborne announced his intention to merge income tax (IT) and national insurance (NI).  Headline grabbing as the initiative was, the reality of the complexities, challenges and costs of such a move resulted in this idea being kicked into the political long grass.


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