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Mortgage Products Shrink

We all know that we are sailing through choppy waters at the moment, but it really hits home when you look at the actual reduction in the number of mortgage products available at the moment.

The BBC has reported that mortgage deals have fallen by around two-thirds since July 2007. According to Moneyfacts the figure has fallen from 15,599 to 5,725.

Of course a lot of this is down to the absurd number of products available in the sub-prime arena, and many people will argue that this “simplification” of the mortgage arena is no bad thing. While I agree in part with this, some lenders really did have too many variations of the same product, which ultimately means that the end customer has less choice.

This makes things especially more difficult when coupled with the fact that lenders are becoming more choosy with regards to who they deal with, on both a consumer and a broker basis. This is something that I do expect to get more pronounced over the coming weeks.

It is difficult for many in our industry who have never experienced a Bear market before, although these conditions seem more like a Polar Bear market, (apparently Polar Bears are more vicious – I don’t know but you get the point).

Mortgage Brokers need to understand their true value in markets such as this as people need independent advice now more than ever. They need to go that extra mile to look after clients and all their financial needs to help them through these times.

I find it disappointing when some industry commentators seem to just want to moan about lenders’ service levels being to blame for seizing up the whole mortgage market.

It is not simply the levels of service, though of course this is frustrating, but brokers must now understand that this is a bi-product of the deeper issues that lenders face. We must position clients up front with regards to the issues, both service and otherwise, that we are facing at the moment.

What gets frustrating is when lenders do not engage with brokers or their clients with regards to suddenly changing rates, although in general given the circumstances, most lenders have conducted themselves


Dear Delia…

Dear Delia After attending a seminar, my client is looking to expand his buy-to-let portfolio rapidly but is frustrated by lenders only being willing to lend against a proportion of the purchase price rather than the value of the properties. He is securing good discounts from distressed sellers but is having to use more cash for each transaction than he would like. This limits the number of properties he can buy. Can you suggest a solution?

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Directors at John Charcol have pumped around £1.5m into the company as a temporary measure before a sale or new investment.The move followed a KPMG audit that warned of material uncertainty which may cast “significant doubt” on the company’s ability to continue as a business.The audit states that the John Charcol Group incurred a net […]

Dunfermline appointment

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Fairness test may open can of worms

Kevin Paterson takes a weekly look at the latest developments in the market and brings you what’s hot and what’s not in the world of mortgages


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