Delegates at Mortgage Strategy’s Packager Summit last week were upbeat, despite research from The Mortgage Business showing just 8% of senior staff in the sector were confident about the future. The liquidity crisis has hit the market hard but packagers are not giving up without a fight.
The past six months have been tough for the industry. Companies have folded and firms and individuals have not been paid. It seems the only disaster we haven’t seen so far is murder – but scribes have already imagined that crime taking place in When greed becomes fear, a dramatisation of the sub-prime crisis on Radio 4 recently.
But with all the hardships in the market, the majority of delegates at the two-day event put on a typical display of British grit. They felt that despite lenders cutting their packager panels, packagers still have a vital role to play in the market.
Even so, they claimed that since the crisis began lenders had not treated packagers fairly and felt that there should be some form of guarantee arrangement to ensure lenders honour pipeline business if they pull products at short notice.
But it hasn’t just been market issues that packagers have had to deal with. As if to prove the adage that the only certainties in life are death and taxes, along with the potential demise of their market, packagers have also had to grapple with the question of whether they should pay VAT.
There was a heated debate on the subject at the event. The general feeling was that VAT will hit the sector hard over the coming months, with Revenue & Customs homing in on firms that are liable to pay. It could even backdate payments.
But while packagers acknowledge that the next few months will be hard, they also felt the tough conditions would separate the wheat from the chaff.
Hopefully, a better working relationship between brokers, packagers and lenders will emerge at the other end of this rough period. And amen to that.