As ever, I’m confused. Nothing unusual in that, many of you will say, and you’d be right. I spend a high proportion of my professional life being baffled.
There are several sources of confusion. The first is the de-cline of the mighty HBOS. A couple of weeks ago, the financial press reported that its share of the market had fallen from about 20% to 8%. This could spark a price war.
HBOS wants its share back. It doesn’t think its retention strategy has been effective enough and will now go all out to win back the customers it has lost. This could see it launch loss-leading products to regain lost ground.
This would be a boon for consumers and brokers, because the deals I’m able to offer clients at the moment are boring. And lenders are still artificially suppressing rates through higher fees.
Of course, it’s all relative. These deals are still light years away from those we had to endure back in the bad old days of the late 1990s, or the 1980s for those of us old enough to remember 14.75% deals.
We are moving along the rate cycle and it’s therefore inevitable that we will see increases to balance previous decreases.
Nonetheless, the news of a potential price war was welcome and offered me a small glimmer of hope. But then I received an email informing me that Halifax, along with a number of other lenders, was increasing its fixed rates. What are we supposed to make of these conflicting messages? I’m frequently asked for my views on interest rates and at the mo-ment, all I can say is I have no idea.
Next, I see that Safe Home Income Plans has done a U-turn on its requirement for advisers to obtain lifetime mortgage qualifications by August 1.
It seems unqualified brokers will now be able to submit lifetime business provided a suitably qualified person supervises them.
I’ve always had time for SHIP and its chief executive Jon King, but it has gone down in my estimation after this move – which apparently was always its position, we simply didn’t realise it.
Even Andrea Rozario, director at Private Fin-ance and an equity release commentator, doesn’t consider the change of stance to be a problem, as she thinks it will encourage unqualified people to enter this niche business under a grandfathering arrangement.
I disagree. I took the view that if I was going to give good advice and present a credible professional persona to the public, I had to take the necessary exams. SHIP’s initial stance seemed to support this, so I’m disappointed to see I was wrong. If we want lifetime mortgages to become the next mis-selling scandal, we’re going about it the right way.