View more on these topics

Business borrowers need fair treatment

My last thoughts on the Mortgage Market Review before we submit our response to the Financial Services Authority concern a niche group that is subject to potentially significant changes – small business borrowers.

When a small business approaches a lender, it will first look at all the borrowing options available before it agrees that a residential mortgage is a suitable choice. The FSA is proposing to carve this out of the MMR as it is a contract between the lender and the business, not the individual.

We agree to some extent. The MMR rules on the sales process should not apply as the individual’s income and expenditure are not relevant, and neither is advice as defined by CP11/31.

But lenders should inform borrowers which regulatory protections they are foregoing and which they will receive. Arrears and repossession protections should apply as they are at risk of losing their residential property.

Also, FSA principles, including Treating Customers Fairly, will still be valid. So borrowers can complain to the Financial Ombudsman Service if they have been treated unfairly or the arrears process has not been adhered to.

Taking out a mortgage on an individual’s property to raise finance for a small business is different to taking out a personal mortgage and the MMR cannot accommodate both without restricting the ability of lenders to transact with such borrowers.


Nationwide’s Dyson to head GI as well

Martyn Dyson, head of mortgages at Nationwide, has been appointed head of general insurance at the society as part of a restructure of its mortgage division. Dyson will, however, still have responsibility for mortgage policy and regulation. Meanwhile, Tracie Pearce has taken on the role of head of group mortgages, products and pricing, and will […]

Michael White takes aim at sportspeople with new lender

Michael White, former director of lending at Kensington, has set up a bridging lender specialising in lending to professional sportspeople, entertainers and property developers. London-based Boutique Capital, which is funded by private backers, offers loans of between £75,000 and £5m over three to 18 months. White, who is managing director of the business, co-founded the […]


News and expert analysis straight to your inbox

Sign up