The second charge market is not yet cohesive enough to present a united front. There is no common message and the marketing is at best fragmented and at worst invisible.
So how does the market generate more second charge business? I believe the answer is two-fold.
Firstly, I believe that the industry needs its own trade body in order for mortgage brokers, packagers and lenders to help shape the future of the second charge marketplace.
To engage and promote the industry we need to listen to the mortgage broker. They are the ones who take what we say to them and then transfer that knowledge to their own clients.
We need to be heard outside of the introverted and, to some extent, self-serving cocoon that currently exists in the industry. To thrive we need to have the mortgage brokers leading this. We need a board of lenders, packagers, brokers and even consumers to help get the second charge market ratified by those who can help it grow.
Secondly, I think we need a product levy. The trade body needs to be seen as not only not for profit but also not for the personal benefit of people who are running it. The best way I feel we can achieve this is via a product levy. If the average run rate is currently 1300 completions per month, why not deduct £50 at source which can then be directed to help grow the industry? This could give the best part of £750,000 as an annual marketing budget.
This board should be entrusted with the money and be used on board approval, and money should only be used to promote the industry they would be no expenses being claimed by anyone on the panel, with the board being altered to allow more people to give their opinion.
One additional idea may be for mortgage brokers to join the body, subject to attending two workshop/masterclasses/events by a packager or lender. We want the broker to drive this as without them we are all going to have to get our CVs updated.
The time continues to be ripe for a change in direction for what is clearly an important product product for a mortgage broker to have in their armoury. There is a demand globally for transparency across many sectors so let’s take ownership of the problem and ensure that the second charge market is seen to be leading from the front.
Scott Thorpe is director of London Money Loans