You are here: Home - News -

There may be trouble ahead

by:
  • 05/06/2003
  • 0
At a time when the mortgage industry is basking in complementary remarks from such figures as the Ch...

At a time when the mortgage industry is basking in complementary remarks from such figures as the Chancellor and Clive Wood, the chairman of the Council of Mortgage Lenders, the intermediary sector should be feeling rightly satisfied with its role in this success.

Despite all the talk of examinations and regulation, and the associated anxiety they bring, the last 12 months have been a boom time for mortgage advisers. And this success has culminated in the rightful recognition of brokers’ importance to the industry with the long awaited launch of the Association of Mortgage Intermediaries, the first trade body set up specifically for mortgage intermediaries.

However, there are indications of trouble ahead, as there have been growing signs of unrest in the mortgage protection market. Re-insurers are becoming increasingly worried about a predicted claims explosion in critical illness policies and are making it almost impossible for insurers to offer guaranteed rates. This has caused insurers to alter their policies ahead of time and consequently increase their premiums. One of the only insurers to maintain its guaranteed premium prices was Prudential and consequently it has been swamped with applications. It has now joined the other life insurers, but its recent decision not to honour ongoing applications will potentially cause problems for thousands of brokers and their clients, as they may now have to look for a different insurer and start the application again, leaving their mortgage vulnerable.

Despite this, mortgage brokers must not let adverse media coverage put them off selling protection. The continued success of the market depends on providing sustainable homeownership, as the latest Power Hour finds out. With only 14% of mortgage payment protection policies sold by intermediaries, the potential for increased revenue cannot be ignored.

Ben Marquand, editor


Tags

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
FSA proposes application fees

The Financial Services Authority (FSA) has published CP180, its proposed approach to application fee...

Close