View more on these topics

Growing support for non-profit mortgage club


There is mounting support for a new not-for-profit mortgage club, after London Money director Martin Stewart mooted the launch in a cover feature for Mortgage Strategy last week.

Stewart aims to rally 100 or so directly authorised advisers to form DA Alliance and use their collective buying power to negotiate better deals with lenders.

He suggests each broker would pay £500 a year to cover the alliance’s running costs, but would then keep all of the procuration fee quoted on the mortgage offer.

Stewart hit upon the idea after growing frustrated with the level of fees charged by some clubs, which can be up to £60 of a £700 procuration fee. He says: “Mortgage clubs will come up with a counterargument about why this is justified. But I’m struggling with that.

“If we do 200 mortgages a year, you’re looking at £12,000 in revenue for using a particular mortgage club. If I’m losing £12,000 a year, there have to be 100 DA brokers also losing that a year. I think that’s quite a big price to pay.”

The idea is already gaining support among the broking community.

Coreco director Andrew Montlake says: “I really like the idea as it offers freedom and transparency for members and could be a real success if run properly, even if on a smaller scale with a few DA brokers. “

Edinburgh Mortgage Advice director Mark Dyason says: “Martin is a clever guy and I think this is a very interesting proposition for DA brokers who are underserved in the current market. For it to work as a not-for-profit proposition you need to have someone willing to undertake this and I think Martin has the motivation for that. I don’t think it will be difficult for this to gain traction as it has certainly created a ripple of interest.”

Cornerstone Mortgage Consul­tants director Gerry Weir adds: “I would welcome this. I understand Martin’s frustration with existing models and I think that, if he can build enough support to have purchasing power, there is certainly mileage in the idea.”

But Brightstar financial director Rob Jupp, while supportive of Stewart’s not-for-profit plan, still sees value in the role played by existing clubs.

He says: “It’s an interesting idea and I wish Martin well getting it off the ground. But we work with a number of mortgage clubs and they offer considerably more than a glorified commission club.

“These include commission rebates, preferential terms, compliance support, exclusive products, technology and a wealth of educational roadshows.

“Lenders see significant value in working with established networks and mortgage clubs and any new entrant may find it challenging to get the buy-in of the same lender partners.”


Buy-to-Let Watch: Turnaround for housing policy?

Will George Osborne’s successor address one of the biggest problems of our generation in his first Autumn Statement? In a month’s time, Chancellor Philip Hammond will deliver his first Autumn Statement. A lot is riding on it. Many in the industry in fact are crossing their fingers that there will be another shock – in […]


HSBC joins Openwork panel

HSBC’s full range of residential mortgages will be available to Openwork advisers after the network added the lender to its panel. HSBC is the fifth new lender to join the Openwork panel this year. Openwork proposition director, mortgages, protection and GI Paul Shearman says: “We conducted a survey amongst our members early this year regarding […]

lifetime lease purchases

What is a lifetime lease purchase?

Lifetime lease purchase deals involve raising finance but not on current properties. Rather, they are taken out when consumers move home. They are called lifetime lease schemes. Although not identical to sell-and-rent-back options, they are unregulated too. Lifetime leases are designed for clients who want to move but either cannot afford to or don’t want […]

Health - thumbnail

Absence management systems gone AWOL from UK’s SMEs, reports Jelf

A quarter (23 per cent)* of the UK’s small to medium-sized enterprises (SMEs) do not have an absence management system in place, according to new research from Jelf Employee Benefits. Despite 69 per cent* of organisations having a system in place, three-quarters (75 per cent) report that it is not providing them with sufficiently empowering absence or health data to inform an effective wellbeing programme.

Health Shield logo - thumbnail

Health Shield launches new and improved health and wellbeing benefits

As part of its commitment to help even more companies improve employee wellness and productivity, award-winning health cash plan and wellbeing provider Health Shield has announced a raft of new and improved health benefits. From early diagnostics, detection and screening services to rehabilitation and the extension of home care support to parents, Health Shield’s range […]


News and expert analysis straight to your inbox

Sign up
  • Post a comment
  • Chris Hulme 9th November 2016 at 4:02 pm

    This is a fine line between mortgage clubs and mortgage networks and I feel the line between the two is getting confused here. My reading of the plan here is for a DA Club to be borne purely for mortgage business to be transacted at better proc fee and deal rates than currently available to each DA on their own.
    The “share of proc fee” argument seems to be levied at the network model rather than the club model and speaking as a network member I have to say the choice is not based solely around monthly costs or shares of fees, it is certainly a much bigger program of benefits within the network model than DA – but that’s just my thoughts.

    • Martin Stewart 11th November 2016 at 4:00 pm

      Good observation Chris . As I DA firm i pay separately for my compliance support , my regulatory fees and my PI insurance . The loss incurred on mortgage procuration fees that we suffer equates to more than the total sum of those overheads. Clearly therefore, as a business owner it would be careless of me to ignore what appears on paper to be our biggest expense. Feedback tells me i am not alone! As Monty accurately points out it may just end up as a collection of smaller DA’s and i think that would suit me, and them, just fine.


Why register with Mortgage Strategy?

Mortgage Strategy continues to be the market-leading B2B mortgage publication in the UK, and provides trusted, independent insight with the aim of helping, promoting and analysing the latest developments for mortgage professionals.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Mortgage Strategy Events
Be the first to hear about our industry leading conferences, awards, webinars and more.

Research and insight
Take part in and see the results of Mortgage Strategy's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now