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Networks can help reduce the squeeze

Brokers had only just got to grips with the impact of the Mortgage Market Review on lending when the Financial Services Authority revealed last week that it intends to raise its fees by 10% in a bid to recoup some of its lost income.

Combine the reduced lending that the former is likely to cause with the increased cost of paying for the latter, and brokers are likely to find that their bottom line is more squeezed than ever.

It is likely that the MMR and the Retail Distribution Review are just the thin end of the wedge and that there is still the potential for more regulation in the future.

For small brokerages, especially those that are directly authorised, the financial and time constraints of staying compliant could adversely affect the business of writing mortgages.

To that end, brokers flying solo should consider sheltering from the regulatory storm under the protection that networks can offer.

While doing so isn’t entirely without cost, this outlay will be more than recouped through the value that is added to their business by being part of a collective of similar firms.

This strength in numbers manifests itself in various ways, from access to keener products and rates, to a more transparent fee structure and the potential to align with other, like-minded firms and create a brand based on quality.

Becoming an appointed representative of a network would enable brokers to keep their individual brand while becoming more insulated from future changes.


Government loans to offer lenders a lifeline

Mortgage lending is set to receive a boost under government proposals to offer cheap loans to banks through its funding for lending scheme. Delivering their annual Mansion House speeches to the City last week, chancellor George Osborne and Bank of England governor Sir Mervyn King revealed an ambitious scheme to boost mortgage and business lending. […]

Mortgage prisoners put the squeeze on RMBS

A quarter of the UK’s 200,000 sub-prime borrowers are unable to refinance their mortgage, with ’mortgage prisoners’ accounting for up to 30% of some lenders’ residential mortgage backed securities. Moody’s Credit Insight report last week warned that RMBS transacted between 2006 and 2007 contain the highest number of mortgage prisoners because older transactions benefited from […]


Caption Competition

Precise Mortgages’ Gareth Lewis strikes a pose while standing next to one of his recent adverts.


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