Higher compliance costs and falling fees will drive huge change through the second-charge advice sector, said One Savings Banks’ John Eastgate this morning.
However, he admitted most of the changes for mainstream brokers are less interesting, much like Arsenal manager Arsene Wenger’s relationship with the transfer window.
“He’s very aware of it but it’s for other people to spend some time on it,” said Eastgate.
Speaking to an audience of over 100 brokers at the Complete FS Specialist Lending Expo near Southampton, Eastgate said the Mortgage Credit Directive (MCD) would usher in higher conduct of business standards for second-charge advisers than ever before.
He said the burden to produce ever-higher consumer outcomes will also bring higher compliance costs to advice firms.
“The reality is compliance professionals are in such demand and they cost a lot of money,” he added. “What was good enough before won’t be good enough now.”
He warned brokers to also expect falling advice fees in the second-charge market as the market adjusts to the additional volumes brought in by first-charge brokers, offering the products alongside remortgages after 21 March next year.
Second-charge arrears levels have already fallen from 18% in January 2011 to 14% in July 2015, he said, which needs to go further.
“Everyone would accept lower arrears levels are a good thing. Giving people loans they can’t afford to repay is not a good situation.”
Victoria Hartley is contributing editor at Mortgage Solutions, Specialist Lending Solutions, Your Money and Your Mortgage at London-based publishing company AE3 Media.
She has an MA in Radio from Goldsmiths after gaining a 2:1 in a Comparative American Studies BA at Warwick University. She also holds a TEFL qualification and taught overseas in Mexico and Japan from 1994 to 1997.
Her role includes editorial oversight of the news, analysis and features, event content management and strategic and editorial consultancy for the AE3 Media group. She is an experienced video, broadcast and live-event host and regularly chairs web and podcast debates and interviews.
Multiple award nominations have resulted in two wins: Santander Media Awards, trade journalist of the year and Headlinemoney Awards, mortgage journalist of the year (B2B). Here is one of the award-winning pieces: https://www.mortgagesolutions.co.uk/news/2011/07/21/exclusive-tale-bailey-fraud-witness/
Previous roles include editorships of Mortgage Solutions, consumer title What Mortgage and trade title Credit Today as well as a stint freelancing for a variety of outlets including The Guardian and Which? Money.
