View more on these topics

Your Views

Brokers can’t ‘roll over’ clients just to get a fee

The intermediary sector was unimpressed by an article in a national newspaper in which it was claimed that brokers were being paid retention fees for ‘simply rolling over’ clients onto new deals…

Mortgage advice is, quite rightly, heavily regulated. It protects clients, it protects the public from further bailouts to the ‘pesky banks’ and it protects some brokers from themselves. As a result, running a mortgage advice business is not cheap.

We pay to trade – whether it be for regulator charges, network compliance charges, or industry levies to pay compen-sation to people poorly advised on different financial products by ‘other’ advisers. That’s just so we can trade.

Then you’ve got normal running costs such as offices, staffing, professional indemnity insurance, marketing. The list goes on.

When the work actually gets done, we put in many hours of research time before advising the clients on the most cost-effective route to take.

No mortgage broker is going to get rich by earning £300 on a £100,000 mortgage.

Some mortgage brokers charge fees to clients for their advice, some don’t. That choice is based on risk – will a broker risk their time, maybe for three or six months of a house purchase transaction, to potentially not be paid a penny from the lender should a mortgage not complete as planned?

Documentation is strict and potential clients are fully aware of any charges that could apply before they begin working with a broker. Clients get full illustrations which detail the mortgage deal advised, and a mortgage suitability letter. If the best advice is for the client to take a deal that doesn’t produce commission for the broker, that’s what we do.

It’s about trust. We can’t just ‘roll over’ a client to earn commission.
Stuart Gregory

Modern-day banditry over leaseholds

And leasehold new-builds were in the spotlight again for the wrong reasons…

I must admit I cringe when a  client advises they are purchasing a new-build property. I know I will start receiving the twice/thrice daily phone calls from the sales office demanding to know when the valuer will be making an inspection.

I am reading more and more reports where new-build purchasers have been sold property which is leasehold, subject to escalating ground rent and huge sums to purchase the freehold.

The sales office and nominated conveyancers, in most purchases, nominated by the developer have glossed over the fact that the property is leasehold and not freehold.

The developer sells on the freehold and the new owners receive escalating ground rents, increasing rapidly over the years. Owners face large bills and solicitor costs to purchase the freehold and escape the escalating rents.

This amounts to modern-day banditry.
John Emmett

Award an endorsement of everyone’s efforts

Finally, the best of the industry attended the Mortgage Strategy Awards last Wednesday night and the feedback has been phenomenal. The winner of the Mortgage Personality of the Year award was keen to acknowledge the work of others in the industry…

I was absolutely bowled over to receive the Mortgage Personality Award – recognition by lenders and the leading industry magazine really does count for something.

But as I said in the video interview, it’s an endorsement for everything that everyone such as Phil Rickards, Liz Sims, Doug Hall and many others do as they travel around industry events getting the message on tax changes and PRA rules on BTL to brokers of all shapes and size.
David Whittaker



House prices up 5.8% in year to February, says Land Registry

The average UK house price in February rose 5.8 per cent year-on-year and 0.6 per cent month-on-month, according to HM Land Registry. However this still remains below the average annual house price growth seen in 2016 which was 7.3 per cent. The average property in February cost £217,502. The average English property was worth £234,446 […]


Government unveils letting agent fee ban details

  The Government has today laid out its plans to ban unfair letting agent fees in a drive to encourage better competition in the rental market. The measures will stop hidden charges and end tenants being hit by costly upfront payments that can be difficult to afford. The proposals also ban any letting agent fees […]

How to cut mortgage fraud risk

Recent figures from Financial Fraud Action UK revealed a financial scam was committed, on average, every 15 seconds during the first six months of 2016, says Roy Armitage, head of credit at Lendinvest. That represents a 53 per cent rise year-on-year, with these scams coming in all shapes and sizes. Furthermore, a staggering 56 per cent of […]


News and expert analysis straight to your inbox

Sign up