View more on these topics

I should know but I don&#39t

Q: I arrange valuations on behalf of my clients. They make the cheques payable to me, not the valuer. Will this still be acceptable after regulation?

A: AMI lobbied vigorously so the FSA&#39s client money regulations would not fall on mortgage intermediaries. These regulations are onerous and should not be taken on lightly. If intermediaries accept payments in their own name for such services as valuations they will be deemed to be handling client money.

Client money is money which, in the course of carrying out mortgage mediation activity, an intermediary receives and holds on behalf of a client either in a bank account or in cash. Client money would include, for example, money received and held in order to pay a valuation or survey fee to a valuer or surveyor. But if an intermediary receives a cheque made payable to a third party valuer or surveyor, that is not client money and nor is money that is payable to an intermediary, for example a brokerage fee.

If an intermediary is holding client money it is subject to the FSA&#39s higher capital requirements. Under these, intermediaries must maintain net assets the greater of £5,000 or 2.5% of annual income if not holding client money or £10,000 or 5% of annual income if holding client money. There are also requirements as to how client money is held.

All in all, think twice about holding client money.


Labour thinks the proposed funds could stop buy-to-let overheating

Chris Cummings, director, AMI On the Treasury&#39s website, alongside the Budget download, is an opportunity to glance through the PIF consultation paper. What is it, what should we do about it, and wherein lies opportunity? This consultation picks up on the main themes of the Miles and Barker reports. As Ruth Kelly, the financial secretary […]

Get to know your PIFs and SIPPs

With consumers becoming aware that their pensions may not cover them in their old age, property investment is increasingly edging towards the forefront of people&#39s retirement planning. While buy-to-let is the obvious solution, more schemes are being introduced into the market, spurring people to see property as a way of saving for pensions. As our […]

Bananas Inc launches branded lending operation with SPML

Bananas Inc has launched a branded lending operation with the support of Southern Pacific Mortgage Limited that is expected to generate £50m of additional mortgage lending over the coming 12 months. The branded lending business, which will retain SPML branding, started operating at Bananas Inc&#39s Whiteley, Hampshire offices this week. It is serviced by its own […]

MIAS launches its proposition to brokers

The Mortgage Intermediary Alliance Scotland will launch its proposition to mortgage intermediaries in Scotland today at a presentation in Edinburgh to over 100 guests. The alliance, established to raise the profile of mortgage intermediaries in Scotland, aims to establish a Kite Mark, revealed in Mortgage Strategy magazine for the first time this week, which it […]


News and expert analysis straight to your inbox

Sign up