It is a worry that in these last days before statutory regulation, when mortgage advisers are being urged to join umbrella organisations which promise to take care of their interests, that there are more stories of advisers getting into disagreements with the very groups which pledge to protect them.
Regulation will undoubtedly raise standards and the status of independent advice in the market, but it is likely it will prove more expensive, and therefore it is of the utmost importance that advisers looking for support choose who they deal with carefully.
With the proliferation of new organisations promising protection for small mortgage advisers there will inevitably be those who cannot live up to their billing, either deliberately or inadvertently, but it is down to the broker concerned to fully investigate firms before they do business with them. To do anything else is to risk losing money and a lengthy compensation process, or in the worst case scenario to end up answering a complaint to the Financial Services Authority.
While some firms may promise to hold your hand, it is never wise to enter into any agreement without having the utmost confidence in the management of the company you are dealing with.
This maxim looks as if will also be of relevance to borrowers. With the publication of the latest Housing Bill from the Government, which is consulting on the Home Information Pack nÃ©e Sellers’ Pack.
On the whole it looks as if many of the issues with the Sellers’ Packs still remain, despite the change in name, as it still proposes that the ‘Packs provide a compulsory Home Condition Report when they put the house up for sale. The unheeded argument was that many lenders and borrowers will not want to rely on the contents of such a report because there exists a potential conflict of interests.
However, it seems likely to be at least three years before the Bill becomes law, and there is a long way to go before then. So if the housing market takes a prolonged downturn then, as Stephen Smith of Legal & General says, it would be a brave Government that forced such a Bill through in the middle of a housing market depression (see Market Watch, page 12).
Unfortunately for those who are seeking to significantly alter the Bill the latest surveys are suggesting that the fundamentals of the housing market are still very solid and a crash is highly unlikely, which means they will have to fight it all the way.
Ben Marquand, editor