John Charcol’s Nick Morrey to join Coreco
In his role he will manage and grow Coreco’s team of brokers in its London and Southend offices and across the country.
This will include technical assistance to brokers, helping new joiners and fostering lender relationships.
Morrey has worked at John Charcol since 2002. He is currently product technical manager and head of the specialist mortgage technical service team.
He supported advisers across its three locations and worked with lenders on policies, criteria, products and approval processes. He also wrote technical guides and blogs for the broker.
Coreco’s managing director Andrew Montlake said that Morrey had had a broad range of experience and was well-respected by lenders and the industry.
He said: “He will be an invaluable help to all our brokers, both new and experienced, as well as to me personally. This will allow me to push forward with our overall strategy and exciting plans we have in store for Coreco.
“We already have a highly respected brand and our Coreco family is packed full of great talent, but we want to cement ourselves as the top brokerage that talented individuals of all backgrounds aspire to work for.”
He added that there would be further announcements in the future as it completed structural changes.
Morrey said: “I am very excited to be joining Monty and the rest of the Coreco team, some of whom I have known for years. Coreco are a terrific company with a great reputation. They have mortgages and customer service at the heart of their DNA, and I am very much looking forward to being a part of the projects to come.”
Hometrack to provide bespoke property valuation reports to Coreco
Hometrack’s property valuation reports include a valuation from its automated valuation model (AVM), local market trends, comparable properties and recent market sales.
The intelligence firm said the reports would arm Coreco’s brokers with relevant information, provided quickly and accurately, which would allow them to better advise their customer’s individual needs.
Andrew Montlake (pictured), Coreco’s managing director, said: “These can really help to guide our clients, and brokers, as to the likely value of the property they are remortgaging or looking to purchase. This enables us to set expectations accordingly and help to remove the prospect of time-sapping down-valuations.
“Clients expect so much more these days in terms of service and the customer journey, and rightly so, and anything brokers can do to make the mortgage experience more satisfying by adding value at every stage will enhance this.”
Hometrack’s product and technology vice president Spencer Wyer said: “The pandemic has underlined the need for automation in the property valuation market, with digital valuations the only viable option in a time of social distancing.
“While the world is opening back up now, that need for speed has in no way diminished. We look forward to supporting Coreco and its brokers with the most accurate property valuation reports in the industry, and to growing our relationship for the future with new and innovative products we are working on for brokers.”
Hometrack has recently partnered with Yorkshire Building Society and Leeds Building Society to offer a climate change risk product to help evaluate its impact on their mortgage portfolios.
It has also appointed open finance data, intelligence and payments platform Moneyhub as its preferred open banking partner.
Majority of brokers want lenders to remove pandemic-based criteria – poll result
Around 67 per cent of brokers said they wanted lenders to remove pandemic-based criteria as soon as possible, according to the latest Mortgage Solutions poll.
Meanwhile 17 per cent said they wanted lenders to remove them at the end of this year and 16 per cent said changes should not be made any earlier than next year.
During the pandemic lenders brought in a range of measures to ensure that they lent responsibly, such as requiring larger savings in reserve, removing higher LTV products or not lending to those on government support.
And while brokers said that some lenders were already rolling back some pandemic-based criteria, full removal may be some way off.
Coreco’s managing director Andrew Montlake said: “There will obviously be a lingering on where furlough is concerned particularly for some businesses in certain higher risk areas like travel and entertainment, which is to be expected. Lenders still have to go through their due diligence, but this should be more on a case-by-case basis rather than a catch-all policy.”
Miles Robinson, Trussle’s head of mortgages, added that many lenders were simplifying their requirements with the majority now requesting applicants show three months’ statements to show their finances and income were stable.
He added that some lenders had introduced cut-off points to Covid-19 support schemes. For example, they wouldn’t lend to those who took government support out in the last three months but those who took them out a year ago could be eligible. He said this was “proving helpful to many”.
However, Robinson said that despite the economy improving and the lifting of most Covid-19 restrictions lenders were still being cautious.
He said: “It is understandable that many lenders are reluctant to remove all pandemic-based criteria from mortgage applications. Whilst many restrictions have now been lifted, it is important to note that we are not yet clear of the uncertainty of Covid-19 which could then resonate back in the property market.”
Mortgage Advice Bureau’s head of lending Brian Murphy said it was not surprising that most advisers wanted criteria changes to be “reversed and normalised” imminently, but lenders needed to see the full impact of government schemes first.
He said: “To date the impact the pandemic has wreaked on the economy, particularly in terms of unemployment, has not been as severe as most were forecasting. Once the last of the government support measures have ended, there will no doubt need to be a period of reflection while lenders assess the consequences before normalising criteria to pre-pandemic levels.”
According to Knowledge Bank’s operations director Matthew Corker, searches for Covid-19 related criteria on its criteria platform are down 90 per cent in virtually all lending.
Corker said: “While the numbers have dropped dramatically, there are a few searches for pandemic criteria. Although lockdown restrictions have ended some are still on furlough, and we are not fully out of the woods yet, so lenders are rightly being cautious about removing pandemic criteria.”
He added that it is likely that there would be further changes to criteria as the furlough scheme ends, and the economy continues to improve.
Nicholas Morrey, John Charcol’s product technical manager, said that the challenge for lenders centred around affordability and how that fits with the ethos of responsible lending.
He said: “If someone applying for a mortgage is on the same income as they were before the pandemic but has taken on financial commitments they did not have before, like government loans, then lenders will struggle to lend them the same amount they did previously, let alone more.
“But should that be put down as a pandemic-related cost and ignored? Of course not. If someone has been furloughed but is going back to work in the same role, and for the same money as before the pandemic should they have their borrowing capacity curtailed? Absolutely not.”
Lenders and self-employed borrowers
Brokers said that a significant issue would be around how lenders approach self-employed borrowers.
During the pandemic some lenders became more selective around self-employed lending, not lending to those who took out government support or lending to certain sectors.
Morrey explained that in the fourth quarter the most recent accounts were not up-to-date enough to form an accurate picture of income and affordability.
He added that if lenders used the most recent year, 2020 to 2021, as part of their affordability calculations then it would possibly impact applications for around three years. This means that applications made in 2022 could be impacted by government support taken in 2020.
Morrey said that Santander’s move to ignore this tax year’s figures, opting to use the year prior, was “forward thinking”. But he added that there could be a drop in self-employed applications in the future.
“I expect others to release their intentions in this area over the next month or they will likely see a sudden drop off in self-employed mortgage applicants whose situations are back to normal or even better,” he said.
Montlake added: “Not all businesses are in trouble just because they have taken advantage of government support measures. Lumping all the self-employed into the same boat, even companies who have prospered during these times, is hard to explain to those who feel they are in a good position to buy a property.”
Brokers want the same quality of support when using lender live chat – Montlake
Speaking on a panel debate hosted by Accord Mortgages in association with Mortgage Solutions, Montlake (pictured) said technology had come to the fore over the last 12 months and brokers had become more used to it. However, he said they needed to feel like they were getting the same level of service from all channels.
He added: “There are some lenders where it doesn’t seem to be the case. It’s about that consistency, it’s about communication.
“With some lenders, we’re getting a different answer on live chat than we are on the telephone so that kind of thing has to stop. As more and more of us start to work from home and don’t have that knowledge share in the office as much as we did, I think it will start to improve.”
Jeremy Duncombe, director of intermediaries at Accord Mortgages, said its support team were the same both online and over the phone.
The lender switched to remote operations as soon as the lockdown was announced allowing it to accommodate more conversations with intermediaries.
Duncombe said the seamlessness of its process encouraged brokers to pick up the phone, but urged them to use more self-serve online resources to avoid being held up on the telephone.
“We absolutely want to talk to people, we absolutely want to answer questions on webchat but there is a lot of help out there to allow brokers not to have to queue,” he said.
Watch the video below [10:03] hosted by Paula John, editor in chief at Mortgage Solutions joined by Jeremy Duncombe, director of intermediaries at Accord Mortgages, Kevin Roberts, director of Legal and General Mortgage Club and Andrew Montlake, managing director of Coreco.
The mortgage market has been underperforming on remortgages and PTs – Accord
Speaking on Mortgage Solutions TV in association with Accord Mortgages, director of intermediaries Jeremy Duncombe said there were still opportunities for refinancing after the tax break.
He said the stamp duty holiday was one of the reasons for the performance of the property market but the desire for bigger homes and relocating from the city were additional factors driving demand.
Duncombe (pictured) said: “I’m really confident that it’s not a stamp duty-driven market, there are lots of other things contributing. I’m really confident for the rest of this year that we’ll still be in a really positive place.
“In addition, even if the market does quieten off a little bit with purchases, there are opportunities for remortgages and product transfers – where we can potentially argue we’ve been underperforming recently.”
Kevin Roberts, director of Legal and General Mortgage Club, said it would be a “bumper year” for product transfers, with 770,000 two and five-year fixed terms set to mature in 2021.
Although he admitted attention given to remortgage and product transfer business dipped, as purchase activity went up, Roberts said upcoming refinancing was “why we’re optimistic of the year ahead.”
When asked if brokers were ready and at capacity to handle the incoming refinance business, Duncombe said intermediaries tended to move with the market and deal with trends as they emerged.
However, he suggested brokers needed to have a plan as early as possible to handle product transfers and remortgages.
Andrew Montlake, managing director of Coreco, said good brokers were already doing this.
Duncombe said: “It’s really important we have these customer contact strategies in place. Having a really good customer relationship management (CRM) system, using the information that’s out there, writing to your customers all the way through, not just in the last three months.
“The important thing, if the purchase market does subdue slightly, is that you’re not scrambling round at the last minute trying to do those product transfers and remortgages. That you’ve got the actions in place ahead, so your customers are expecting it, and it’s a much easier proposition for them. The last thing a broker wants is for a customer to feel like they have to go direct to the lender.”
Watch the video below [9:19] hosted by Paula John, editor in chief at Mortgage Solutions joined by Jeremy Duncome, director of intermediaries at Accord Mortgages, Kevin Roberts, director of Legal and General Mortgage Club and Andrew Montlake, managing director of Coreco.
This video was filmed on 16 June, before the tapering of the stamp duty holiday.
Coreco’s Montlake joins Newspage as non-exec director to boost brokers’ media profile
Newspage is a free platform that allows brokers and intermediaries from across different financial sectors to create their own news page, so that they can be featured in local, trade, national and international media.
The platform, which was launched last year, allows them to add experts, tag their areas of expertise and get news alerts for stories that they would be interested in participating in.
This can help promote the business and the broker themselves, whilst bringing important issues to the fore.
Montlake said: “Newspage is doing something that’s never been done before, which is to give every company the chance to be in the mainstream media, for free.
“I have said for years that it would be great to get more voices out there showing the great things we do in our industry and now there is a tool to do exactly that, and not just for people in financial services and property, but in all industries.”
Newspage founder Dominic Hiatt said: “To have someone of Monty’s calibre and connections onboard is a real boost for everyone at Newspage and a vindication of our model.
“He knows financial services and property inside out, knows his way around the media and, best of all, is in a rock band. His advice and expertise will be invaluable as we continue to grow.”
Mortgage arrears suppressed in Q1 with modest uptick recorded – UK Finance
The body said this was a “direct result” of financial support offered to borrowers during the pandemic.
The number of homeowner mortgages in arrears of 2.5 per cent or more of the outstanding balance rose by 230 to 77,640 quarter-to-quarter. Annually, this was a moderate increase of seven per cent.
Within this total, 28,100 mortgages were in early arrears of between 2.5 and five per cent of the remaining balance, a decrease of one per cent on the previous quarter.
In Q1 last year, there were 30,170 mortgages in the same level of arrears representing an annual seven per cent drop. UK Finance said the level of arrears at the time were due to payment difficulties faced by borrowers before support measures were brought in.
Since then, deferred mortgage payments have allowed these borrowers to catch up with payments and prevented them from falling into deeper debt.
This led to an overall decline in early homeowner arrears in 2020 and resulted in the low number seen in Q1 of this year.
UK Finance said it expected the number of early arrears to go up as forbearance is withdrawn and the true economic impact of the pandemic becomes apparent.
The number of buy-to-let mortgages in arrears of 2.5 per cent or more of the outstanding balance rose by 130 to 5,970 in Q1.
This was up by 35 per cent compared to the first three months of 2020, where 4,420 buy-to-let mortgages were in arrears of more than 2.5 per cent.
Again, the relatively low number was attributed to the support offered to borrowers by lenders.
Possessions dampened with pandemic bans
With a moratorium on involuntary repossessions and evictions during the pandemic, just 190 homeowner mortgaged properties and 180 buy-to-let mortgaged properties were taken into possession in the first quarter of 2021.
This was a quarterly rise of 40 and represented annual declines of 82 and 72 per cent respectively.
Although the Financial Conduct Authority (FCA) allowed firms to resume repossessions in November, lenders continued to pause possessions in line with the government’s ‘winter truce’ from December to January.
The bailiff eviction ban on rental properties was also extended until 31 May.
Possessions are expected to increase due to the backlog of cases that did not take place in 2020, UK Finance added.
Continued support essential
Andrew Montlake, managing director of Coreco, said: “Lenders and landlords alike have, quite rightly, been patient throughout the pandemic as many people struggled with their businesses, were put on furlough pay or sadly lost their jobs. This is reflected in these very low figures.
“As we start to emerge from the pandemic and all the various government support measures come to an end, there is, unfortunately, likely to be an increase in the number of repossessions.
He added: “The hope is that lenders and landlords continue to maintain a degree of forbearance going forward and that any move to repossess a property or evict a tenant is very much a last resort.
“Even when the pandemic technically ends, the financial problems many people will experience will only just be beginning.”
Interest rates set to fall to meet rebounding mortgage demand – BoE
The Bank of England’s Credit Conditions survey found lenders expected increased appetite for house purchases and remortgages in the three months to May after reported declines in Q1.
Meanwhile lenders said overall spreads on secured lending to households had narrowed in Q1 and were expected to continue shrinking over the next quarter, suggesting rates would fall.
Survey results are measured in net percentage balances between -100 and 100, weighting responses based on lender market shares.
A net balance of –21.9 lenders indicated the demand for purchase loans dropped in the first three months of the year while demand for remortgages recorded a net balance of -29.3. This was compared to scores of 31.5 and 2.3 respectively in Q4, marking a significant quarterly drop.
For the next three months, a net balance of 42.8 was given for projected purchase demand in Q2, while remortgages were scored 14.4.
Andrew Montlake, managing director of Coreco, said: “Lenders clearly believed demand for mortgages decreased in the three months to the end of February because a lot of people felt they had missed out on the stamp duty holiday deadline. But in March, after the Budget, everyone then piled in again.
“It’s no surprise that lenders reported spreads narrowed as lenders have started to compete a lot more aggressively for market share.”
Unsurprisingly, lenders expect to be more willing to provide loans to borrowers with less than 10 per cent equity in their homes over the next three months, with a positive score of 57.2.
This is compared to a score of -0.4 recorded for the sentiment towards low deposit borrowers in Q1.
This comes ahead of the launch of the government-backed mortgage guarantee scheme on Monday as well as lenders releasing 95 per cent loan to value (LTV) products of their own accord in recent weeks.
Coinciding with this, lenders said the availability of loans for borrowers on high LTVs would improve in Q2, with a score of 64.9.
More borrowers are expected to default on their loans over the next three months, following a reported rise in defaults in Q1.
Some 20.3 per cent of lenders reported an increase in defaults during the quarter and 36.1 per cent predicted there would be more.
Credit criteria is expected to loosen over Q2 with a score of 20.3 for Q2, compared to the negative sentiment of –5.1 in Q1. Approvals will also improve with a net balance of –0.4 for the next three months compared to a sentiment of –2.1 recorded in the previous quarter.
However, the credit quality of new mortgages in Q2 is predicted to slip with lenders recording a net balance of -4.6 for the next three months compared to the positive score of 15.4 in Q1.
Filling the protection perception gap – Coreco’s Montlake
Following on from the new protection challenge launched in November by trade body AMI, panel guest Montlake discusses his preference to hand off the insurance discussion to a specialist.
In the podcast presented by protection adviser Kathryn Knowles, managing director at Cura with a PHD in business, Montlake said overcoming this disconnect can only be done by making sure brokers’ processes are spot on.
“Different people have different approaches – others like to have the protection discussion and the most successful make sure the first thing they talk about is protection, saying I want to talk about how I’m going to keep you in your home.”
He added: “The reality is as a busy mortgage broker, mortgages are hard in terms of the paperwork and managing lots of enquiries and the most important thing for the client is the fact they want that home or property.
“That’s what they’re focused on which makes it so hard for a broker to slow them down and get into a proper explanation of how it works and how they should have it.”
To listen to the debate, click here.
Montlake sets out AMI priorities as Sinclair commits for at least two more years
Long-serving chief executive Robert Sinclair added that he was expecting to remain for at least another two years but that it was important to start successions planning for his eventual departure.
Speaking on the latest Brightstar video debate, Montlake (pictured), who is also managing director of advice firm Coreco, said it was “an honour” to have been elected to the position in December as a practicing broker who still saw clients and wrote business regularly.
Montlake explained that while it had been a tough last year with the national pandemic, he felt the industry could take some positives from its situation and how people had come together.
“We’re coming into a very difficult period and its very important we go forward with a spirit of collaboration with the Financial Conduct Authority (FCA), with lenders, with UK Finance, the Intermediary Mortgage Lenders Association (IMLA), other trade bodies and really work together for the good of the industry,” he said.
“Because I’m sensing something we can take that’s positive out of this is that we have all started to talk to each other better and on a deeper a level and understanding the issues we’re going through.
“A more harmonious way of engagement going forward is important and making sure that us as an industry meet the demands of the consumer of the future.”
He emphasised this would mean working together in different ways and making sure that as an industry, despite whatever technology was adopted, advice was still front and centre.
In addition to AMI’s broad agenda working on regulation, Montlake also raised the issue of diversity.
“We’re delighted that Dom Scott of Alexander Hall has joined our board and diversity in financial services is something we’re passionate about and we’re going to work hard to try and do something and change the map on that. So that’s another thing that’s important,” he added.
Meanwhile, Brightstar CEO Rob Jupp hosting the debate quizzed Sinclair on how long he would be remaining at the trade body.
Having joined the former Association of Independent Financial Advisers (AIFA) body in 2006, Sinclair was part of the team that formed the separate AMI body in early 2012.
Sinclair noted he was still enjoying his position and did not have any immediate plans to leave, but admitted the time was nearing to begin a succession plan.
“While the board and membership think I’m doing a good job I will stay. There comes a point where you need to work out what your succession plan is and a conversation we will have over next two years is, what is the plan?” he said
“How do we build AMI into a shape that I can move on and out at some point – probably not in two or three years, but four years, possibly.”
“I don’t intend going anywhere in next two, but then you need to think about what that transition looks like.”
Sinclair added that it would be his fourth time of renegotiating the compensation scheme and he feared he could become a barrier to innovation, potentially repeating discussions from previous years, something which he did not wish to happen.