In the September 12 issue of Mortgage Strategy Jason Orme wrote an article on foreign housing models and their relevance to the UK and I took issue with a lot of what he had to say.
House builders are sitting on land with planning consent for around 200,000 houses and flats, which they are not building 80% of applications are generally approved each year under the current system.
While it could make things easier to reduce the number of pages that comprise planning laws, I am not for a free-for-all when it comes to what is built where
Planners and building control officers are being made redundant through lack of applications and work to do.
The government is on the wrong track with the changes to the planning system and most definitely in the pockets of house builders.
Witness the fact that three of the four formulators of the original report on the National Planning Policy Framework are in that industry.
The framework is pushing economic growth for its own sake and is in no way sustainable.
While it could make things easier to reduce the number of pages comprising planning laws, I am not for a free-for-all when it comes to what is built where.
The whole process is out of balance for reasons other than the planning system and tinkering with it is the wrong thing to do. It is purely politics.
Ask yourselves the question why is there such a shortage of housing and why is there such a large demand? Where is that demand coming from?
As a mortgage broker, you might think I am voting for my own demise, but I also live somewhere nice and have good quality of life outside my work, which I wish to maintain.
Mortgage Solutions in Swansea
Well done Mortgage Strategy for hitting back at claims firms
I welcome Mortgage Strategy’s recent campaign Make Claims Firms Pay.
I am sick and tired of spurious claims and I think clients would think twice if they had something to lose.
On three occasions I have received claims for payment protection insurance from the Financial Ombudsman Service or via claim companies and all three times I was proven to have sold the product to the client in the correct way. Call recording and a script helps.
One client was so annoyed they lost that they then tried to complain that they had to wait three days longer than expected for their money on a secured loan and cancelled their holiday. There was no proof of that either.
Put simply there are examples of bad representation from brokers but I believe that is heavily weighed against correct advice and the claims culture has found a loophole.
Well done Mortgage Strategy for attempting to hit back.
Petition is not the answer to brokers’ claims problems
Mortgage Strategy’s e-petition calling for claims firms to be made to pay for unsubstantiated claims against brokers was fair enough, if not smelling a bit like a witch-hunt.
Claims companies in most cases should be able to obtain some form of proof that a PPI policy did exist.
But there are some cases where the client cannot locate paperwork and is adamant they had PPI. In this case, the client is likely to be made liable for the £500 FOS fee.
However, so many clients had PPI added to their loan or credit card without their consent, so perhaps the initial enquiry should not be a complaint, but to request copies of records on file to find out if PPI was indeed added.
There are simple ways to resolve this problem I suppose it’s mostly laziness and I’m the first to complain if someone’s laziness costs me time.
It’s also worth noting that it was mostly lenders that mis-sold PPI. The majority of brokers did things by the book and it is a shame that their time is now taken up by superfluous claims.
But I don’t think this petition is the answer. Claims firms need to rethink how they treat claims where proof of PPI cannot be provided. This is more of a regulatory issue than one of making people pay.
Name and address supplied
No-one writes about the decent claims companies that exist
Posing as someone who thought they might have been mis-sold PPI Which? staff mystery shopped 25 claims firms and identified problems at every single one.
It found that most of the firms did not follow the rules set out by the Ministry of Justice, and that two-thirds failed to advise the caller about the Financial Ombudsman Service, despite being required to do so.
But you can get a claims management company that only charges clients 15% so they should not all be treated the same.
Why is it always firms that have failed the test that get their name blasted by Which? and Moneysavingexpert.com? What about the good companies?
How many cases has Which? or Moneysavingexpert.com taken to court in the interest of the public for consumer matters?
They want the publicity of slating companies. I say get involved in the market before you comment on it in the future.
Consumers have a right to have their financial products checked by anyone but no company should use allegations against a broker unless they have evidence to do so, therefore I think the campaign is wrong.
Name and address supplied
MAS site has so many things wrong, you could not make it up
I have been intrigued by the recent letters and comments from brokers complaining about the Financial Services Authority’s Money Advice Service website.
So I decided to take a peek at the website recently to find out what our industry is paying for.
I was unaware that the service is now, among other things, a mortgage comparison website.
It’s amazing that we are helping a regulator provide a service while being charged for the privilege.
I was about to write that it couldn’t get any worse at least there are no direct links to lenders’ sites when, on closer inspection of the website, I realised these links were there.
Is it regulated? Does it follow a compliance process? Has it consulted the FSA Handbook and the Mortgage Conduct of Business rules?
Using the site to source 90% LTV products I decided to check for interest-only. To my amazement all the lenders appear to offer interest-only mortgages at 90%.
There were no risk warnings regarding interest-only or even the basic one saying, your home might be at risk.
You couldn’t make it up. It’s like a judge drink driving on the way home from the mafia’s annual dinner, with a body in the boot and no MOT.
Coleraine Mortgage Company
There is a misguided belief that banks are ignoring businesses
In the September 12 issue of Mortgage Strategy, Gareth Lewis, head of business development at Tiuta, suggests small businesses are being sent to Coventry when it comes to seeking funding.
But this is not borne out by the findings of Charterhouse Research’s Business Banking Study, which is an ongoing study of 17,000 businesses. Most businesses that apply for funding have their request granted, perhaps contrary to popular belief.
For example, for companies whose turnover is £1m to £1bn, 82% of credit applications have been accepted and for those whose turnover is up to £1m, the figure was 69%. While the latter figure is less, this is still good news, as such credit is invaluable to so many businesses and their own suppliers.
Banks are lending. It is more that there is a misguided belief that they are not that is causing concern. So perhaps it’s time to think positive in a difficult market.
Aldermore’s rate is in line with other high LTV products
Regarding your star letter printed in the September 12 issue on Aldermore’s 100% LTV mortgage, the writer mentions the “extortionate interest rate” Aldermore seems to be charging.
It appears to me that the rate charged is in line with other high LTV products in the market.
Surely providing professional advice is not about rate, but about the suitability of deals for clients.
The author also states that if Aldermore is weeding out the bad risk, the rate should be reduced. But shouldn’t all advisers and lenders be weeding out bad risks anyway, regardless of the LTV?
It’s about time we embraced innovation, or else the market will never move forward.
Kensington should have learnt the risk lesson by now
I was interested to read recently about Kensington pulling its 85% LTV buy-to-let deal and its 90% LTV residential mortgages.
I went to a seminar at Brands Hatch in Kent on September 20 and Kensington was there conducting a round table discussion.
It made a special effort to push the fact it was doing 85% buy-to-let and 90% residential lending even though it was queried by the attendees as high-risk business that it always used to offer before it withdrew from the market.
High-risk business is just that, no matter how you wrap it up.
You would have thought Kensington would have learnt its lesson by now.
Third of brokers say business will rise in Q4 I don’t believe it
I was not convinced by the news from the Intermediary Mortgage Lenders Association last week that a third of brokers believe business levels will increase during Q4 this year.
I suppose when the situation is so bad it can only get better.
But with the risk of some scrounging countries in Europe becoming bankrupt it means there is only worse to come for our economy.
Name and address supplied