What will April 2014 bring for the secured loan Industry?
When I was asked to write the latest Securedwatch the first thing I did was read Brightstar Financial Bradley Moore’s first Secured Loans Watch from last month and it’s fair to say he has already given an extremely thorough update on the market.
As Moore pointed out, it’s been an amazing start to 2013 with Nemo Personal Finance leading the way with rates now from 5.59 per cent for both employed and professional self employed borrowers.
Shawbrook Bank has also increased its highest LTV to a market leading 95 per cent while lenders like Blemain and Masthaven continue to improve their terms for borrowers with what is often termed a fair’credit profile. At every level the industry continues to make improvements to its offering.
The latest secured loan index show that the industry has enjoyed the best January since 2009 and for the 15th month in succession the market had grown year on year, a statistic not many other industries can claim at present.
In the next couple of weeks two lenders in particular will be announcing radical changes to their criteria and bringing considerable further benefit to the market but that’s for another time and my next Secured Loan Watch.
I wanted to use the rest of my comment this month to ask your opinion about the biggest change the secured loan industry faces – What will regulation by the Financial Conduct Authority in April 2014 bring to the secured loan market?
Let me state now, I know no more than the next man. So far very little has come from the Association of Mortgage Intermediaries or the Association of Finance Brokers about what the intentions of the FCA are, but I have my opinions and I would like to hear yours.
I’m sure the biggest change will be brought just by the fact the secured loan industry will be regulated by the same body as first mortgages. That one word ‘regulation’ will open up the market more than any advertising campaign or headline rate could ever do.
On the whole, regulation brings trust to the consumer and maybe even more importantly it will bring trust to the thousands of mortgage brokers who walk through clients doors to talk about the best options available to a borrower.
The truth at the moment is that too often a secured loan isn’t consider. I hear many reasons for this, many of which the industry has worked hard in recent times to overcome but in the current market conditions a secured loan will often be the best option you can give a client who is looking to raise further funds and the secured loan market deserves greater prominence.
Other things that I’m sure will be considered by the FCA are the consideration period that a customer sits through when he or she makes the decision to obtain a secured loan and the restrictions this brings if any changes are made to an offer during the process, maybe the fact that no upfront fees can be charged will change as with a mortgage often a valuation fee is paid upfront but within secured lending you cannot charge any upfront fee.
So I ask you the question; What changes do you think regulation will bring and if the FCA are reading this what would you like to see them change?
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