Star letter: It is haymaking time but what can we offer brokers?
We are now in a traditional haymaking season for mortgage brokers as homeowners want to be moved by Christmas, having been cooped up in a small house all summer. But what have we got to offer them?
The competition for market share has dried up a bit lately and we no longer see new rates hitting the headlines on a regular basis. That does not bother me much as I would prefer criteria changes over lower rates every day of the week, but what can we do to get the market going?
In the buy-to-let arena, we have seen lots of interesting tweaks and alterations as Aldermore, BM Solutions, Kensington and The Mortgage Works (to name just four that emailed me this week with updates) make subtle changes to win more business. This is not a case of ‘Follow the leader’ because all of them have made changes in different areas to increase market share and no doubt balance the books.
The residential market seems a bit dull and we need someone to take the bull by the horns and release a product change that will turn heads. After all, we are quick to moan about the thousands of mortgage prisoners who need to be spurred in to action.
The fear of a rate rise did see some jump on to a fixed rate but that seems to have dissipated somewhat.
If I was a betting man, I would say the sleeping giant that is Woolwich will be the horn grabber. But I have been wrong before.
Robert Winfield, Chartwell Funding
Our topsy-turvy industry gives cause for complaint
Last month, Mortgage Strategy reported that Bank of Scotland had once again topped the mortgage complaints table.
I am not surprised because Lloyds has ruined hundreds of brokers by removing them from its panel and most of them had never had a single complaint against them.
Unfortunately, Lloyds is still in the business and getting thousands of complaints a year while those brokers are out of the business who never received a complaint.
Making BTL more professional will keep politicians out
In a recent issue of Mortgage Strategy, Imla executive director Peter Williams discussed how the buy-to-let market had gone from “celebrity to notoriety”.
While a moderate amount of buy-to-let may be sustainable in the longer term, I believe there will be a serious correction in the present level of activity in the sector.
Sentiment is against further growth and the demand for rentals versus buying does not seem to match the political realities.
We should focus on how to transition the housing market to a more balanced proportion of owner-occupied properties while recognising that individuals may wish to invest for the long term in this industry.
To protect the sector from excessive political intervention, we need to move to a more professional, regulated industry.
This in turn will safeguard the future of buy-to-let by reducing any variability in the quality of service. This variability is one of the main sources of political pressure.
Landlord tax relief change was devised on another planet
I read recently that more than 21,000 people had signed a petition against the incoming reduction to buy-to-let tax relief.
Is the Government’s next step to stop car-lease firms offsetting their vehicle acquisition costs because the man in the street cannot do the same on his private car?
What planet is George Osborne on?
Private investors should not really borrow money to invest in shares but if they did, why wouldn’t it be a business expense? Perhaps it should be.
In addition, dividend income from shares is taxed as a top slice of income. Shares are just another asset class that attracts capital gains tax, in much the same way as non-main residential property.
If the Government has hinged its argument on these two points, it will not be long before this legislation is overturned.
Chris Hulme, Clayton Hulme