This in turn, the lender says, will lead to better solutions for clients, many of whom are underserved by mainstream lenders.

The club was launched at an event in London yesterday. Founding partners, of which there are already 50, come from across clubs, networks, specialist distributors and new build.

Members can access exclusive products and will be able to build Vida’s proposition in partnership with lender, as it provides a space for debate and discussion.

There will be exclusive content, events and marketing support for members too.

The lender said the club was the “next stage” in its journey to create a structure, processes and environment to acknowledge differences in the market and to improve the journey for all parties.

Richard Tugwell (pictured), director of mortgage distribution at Vida, said: “Our partner companies told us that to build a greater understanding of their market needs they wanted to work more closely with us and co-create solutions for their clients. The V Club gives us the platform to make this happen and to support them as we continue our growth.”

Brokers said unsecured debt was very easy to obtain, with only a credit check required in a lot of cases.

Some noted that often loans were offered through digital banking, making it simpler to potentially take out significant sums of money.

Rob Derry, managing director of Brunel Mortgages, said: “It is absolutely crazy, they do a basic credit check and then the funds can be sent over super quickly.

“Someone with good credit score could log on and borrow a significant amount of money and stick it somewhere and stretch it out to the maximum term in case they want to cover rising bills in the near future.”

He said there may be a lack of understanding about how taking out such loans could negatively impact a credit score, and that some borrowers may have a certain complacency around their credit score and assume it will always be good.

Derry said digital banking users were often offered loans through a lender’s app, which created a sense of trust as users may assume that they would not be offered the loan if the bank did not think they could afford it.

He also said when people check their credit score, they could then be offered more credit cards and loans, which could be very tempting in the current cost of living crisis but may not be the most financially responsible decision.

He continued that as the cost of living rose, people may access loans to save for a “rainy day” but not realise the long-term ramifications this could have on their mortgage affordability.

Derry explained that the monthly loan payment would go down as a regular commitment, and therefore decrease what the customer could afford and therefore borrow for a mortgage.

“It should be a lot harder to get unsecured debt. People might feel the pinch initially but then it would be better for their financial health in the long-run.”

He said that more checks should be needed before unsecured debt was given, whether that was in the form of pay slips or banking statements for that extra level of protection for the consumer.

According to recent figures from The Money Charity, the average total unsecured debt per adult was £3,771 in February this year. This compares to £3,724 in February last year.

The average total debt per UK household in the same period was £63,803, which is up from £60,935 in February last year.

Existing mortgage borrowers could struggle to remortgage

Zoe Goodchild, managing director at Apostle Financial Services saidexisting mortgage borrowers could be “tempted” to take out unsecured debt to “try and sail through this cost of living crisis”.

She added that as the cost of living worsens, the number of people looking at unsecured debt or second charges would rise and could “cause major issues should property prices start to fall”.

“For us, the question is not if house prices fall, but when. Borrowing at the moment is dependent on many things, namely a good credit file, steady income and loan to value, however this potential extra debt people may get into will undoubtedly cause issues should they need to remortgage,” she explained.

She said some lenders would still have the appetite to lend to people in such situations but this could “come at a cost that many will not be able to afford”.

Goodchild urged those looking at taking on additional debt to seek advice from a broker to explore different options such as remortgage or a secure loan.

Scott Taylor-Barr, financial adviser at Carl Summers Financial Services, said those thinking about borrowing money to pay household bills should reconsider.

“This is not going to help you in the long run and will likely create issues for you in the not-too-distant future. Mortgage lenders hate seeing payday loans [or unsecured debt] on someone’s credit file, so you really could be shooting yourself in the foot. Borrowing more money when you are already struggling is very rarely the right move,” he said.

He said those who were really struggling should ask for help from existing lenders across the board, whether that is for a car loan, credit card, personal loan or mortgage.

“Ultimately, it is in their best interest to help you pay the money back to them, so they have teams set up to help. That could mean something as simple as them agreeing to a longer term to reduce your payments, or a temporary period of time on interest only,” Taylor-Barr added.

He noted that action could be “more assertive” as lenders could agree to help once they have assessed your income and expenditure and then ask to cancel certain items first, such as TV and entertainment packages.

Borrowers should seek a mortgage broker and contact bill providers

Samantha Bickford, mortgage and equity release specialist at Clarity Wealth Management, said borrowers considering taking out unsecured debt should contact household bills providers to see what support could be available and examine outgoings to see what could be reduced.

She added that speaking to a mortgage broker could be vital, as the mortgage was often the biggest financial commitment.

“For those that do find themselves in this situation, specialist advice from a qualified whole of market mortgage broker will be vital in these situations to ensure that they can access the most suitable mortgage options,” Bickford noted.

“I am passionate about ensuring those with ‘real life situations’ can still obtain the most suitable mortgage deal for them and I am concerned there will be lots of first-time buyers or existing homeowners in this situation in the future.”

The lender said there is the potential for higher income multiples on the products, depending on the client circumstance, but did not specify a figure.

The range is aimed at professionals with “sustainable incomes” that will rise when they secure professional qualifications, or customers that can provide evidence of regular bonuses or more than one form of income.

It is up to 95 per cent loan to value, with products starting from 4.29 per cent. Two and five-year fixed rates are available and the maximum loan size is £1.5m.

Adrian Moloney (pictured), group intermediary director at OSB Group, said that the value of a specialist mortgage brokers “cannot be overlooked”, now more than ever, especially for clients who were paying high rents but could not secure a home from high street banks due to multi-income streams.

He said: “At Kent Reliance for Intermediaries, our underwriters are widely acknowledged as having best-in-class service as well as outstanding knowledge. Our expertise means we could provide a common sense solution even if the case falls outside of standard criteria, with the ability to support a wide range of client types and differing income considerations.”

“This new flexible residential range is another example of us working with our broker partners and using our in-house expertise to handcraft positive lending solutions for clients.”

In a LinkedIn post, Parker said that he had been “incredibly honoured” to lead a “fantastic team full of some seriously talented colleagues across field, telephony and distribution”.

He added that the leadership team had been “outstanding” and demonstrated their “commitment” everyday to make Aldermore a great place to work, with the customer, colleague and broker at the heart of it all.

Parker continued to extend his thanks to distribution partners, who he said had been a “pleasure to engage with day in and day out”.

He added that he was “actively seeking a new opportunity” but would be spending time with his family and was “looking forward to a much needed holiday in the sun”.

He has worked at the firm for around three years, and before that was regional corporate sales manager at Bank of Ireland for nearly three years.

Before that he worked North View Group as an intermediary oversight manager for just under a year and before that was a senior technical decision maker at Barclays Wealth and Investment Management for just over two years.

Aldermore declined to comment.

A qualitative research paper by The Financial Services Consumer Panel (the panel) of 45 participants examined the process leading up to the sale of an equity release product and the feelings thereafter. 

Of the respondents, 26 took out equity release while two opted for a retirement interest-only (RIO) mortgage. A further 13 participants were family members who were closely involved in the sale process either during or afterwards and of these, 11 opted for equity release while two chose a RIO. Four considered a mix of later life lending options.

For participants, equity release was seen as the only or preferred option either because it felt right, downsizing was seen as “unappealing”, or they did not see banks as an option due to their age. 

Others momentarily considered borrowing from family or friends, some did not want to rent a room out. Some overlooked the idea of a loan or remortgage for fear they would either not meet criteria or did not want to make monthly payments while retired or on a low income. 

This was found to have shaped their decision even before speaking to a professional. 

Pre-sale process 

Participants were found to have varying degrees of equity release knowledge prior to taking it out.  

This was either informally through Citizen’s Advice Bureau or a bank adviser, while others sought professional advice from independent financial advisers (IFAs). Those who went to an IFA tended to already be strongly considering equity release.  

It was found that although alternative finance was discussed with a professional, this was often to discourage the option and push for equity release instead.  

Online forms were primarily used to begin the equity release sale process and some participants consulted family before taking the product. Others chose not to as they did not want to reveal any financial struggles. 

According to the study, the decision-making process was quick, with many taking equity release two to three months after initially enquiring. Some took up to two years where the buyer was uncertain or the financial need was less urgent. 

Those who did not take out an equity release product ended up using alternative financial options such as savings, selling assets or just going without. They said they realised the potential downsides of equity release but would not write it off in the future. 

Understanding the product 

Participants did not seem to fully understand all the details of equity release at the point of purchase, though many had the understanding that the value of the home would go to the provider and their inheritance would be reduced once they died. 

They understood that if they did not make monthly payments, the interest would be compounded but the report said this was “not always fully appreciated”. 

Different product features were harder for some to understand. For example, the difference between a drawdown and a lump sum or restrictions around terminating a product. 

Participants said both overt and covert techniques were used to guide decisions, with some saying they felt pressured to take out equity release or pushed to borrow more than they originally intended. 

Some reported they were unaware of their product’s interest rate or were unable to find paperwork after taking out equity release. 

Most participants went to an agent for an equity release specialist company over an IFA as they believed the latter would be more costly. 

Those who did go to an IFA tended to already have access to one as they were wealthier, or they knew of one through their social circle. For those who did go to an IFA, some reported not realising when discussions on equity release became formal and or when they were informal. 

As some had already decided on equity release by the time they spoke to a financial expert, conversations tended to be to reassure them of their choice or to seek the best deal. 

The report said: “It appears that overall, consumers believed they received comprehensive advice when taking out equity release. However, the process of taking expert independent advice was often flawed, for several reasons.  

“Examples included the consumer not fully engaging with the advice, not fully understanding the intricacies of equity release, not fully trusting experts to act in their best interest or finding the paperwork hard to digest.” 

After purchase 

Participants reported limited contact from providers, agents and advisers after an equity release purchase with the exception being an annual statement or marketing to encourage a further drawdown or additional products. 

Most participants said a review every one to five years would be appropriate, but concerns were raised around potential costs. 

Just one respondent proactively reviewed their equity release product after purchase. 

Although the majority stuck with their choice, the few who thought about changing or cancelling the product felt it would be easy to do so, just expensive. Others felt they were unable to change the terms once signing.  

Some suggested the use of a portal like an app or helpline to monitor the product and accrued interest. 

Overall, the report said participants had mixed feelings about their equity release product. 

It added: “For those who considered the product to be a bad solution, there was consternation about their swiftly disappearing inheritance and their culpability in the decision making.  

“For those who considered the product to be a good solution, some still felt residual discomfort with their product.” 

In terms of financial and emotional outcomes, participants reported both positive and negative feelings. 

The panel put feelings of emotional harm reported into four categories: a sense of personal loss; a feeling of guilt; feeling financially ‘stupid’, inadequate and naïve, leading to embarrassment; and anxiety from a dawning realisation of the long-term financial impact. 

Factors such as feeling vulnerable to pressure, being single-minded or having less time to decide led to feelings of emotional harm. 

Advice in hindsight 

In hindsight, participants said they would like the option to review alternatives before committing to equity release. They also advised doing thorough research beforehand, discussing with family, speaking to an IFA about equity release implications or taking the product out later in life. 

The report said: “Overall, many participants stated that they had not considered the full ramifications of taking out equity release. 

“Most notably, these related to restrictions pertaining to further property purchases, as well as repayments in terms of charges and fees, including those for further drawdown. They noted that the language used by advisers, or found in associated literature, could be challenging to comprehend and contain jargon which they did not readily understand.” 

Some said their experience could be bettered with more guidance including face-to-face meetings and more opportunities to ask questions. 

It was also suggested that more information could be given on how to choose qualified independent advisers and ways advisers could highlight alternatives to equity release. Participants also said there could be more safeguards for vulnerable customers and a nomination of who should receive documentation before and after a sale. 

A widely available factsheet on equity release was also proposed by participants, as well as several reviews before and after a sale. 

The Q1 figure is in-line with figures from Q3 last year, which at the time was a record-breaking figure, according to the latest mortgage market tracker from the Intermediary Mortgage Lenders Association (IMLA).

Intermediary caseloads hit 103 in Q4, which was the largest average intermediary caseload since research started in 2015.

The report added that the average number of decisions in principle (DIP) rose by two per cent compared to the previous quarter.

It said it had been gradually growing since the beginning of the year, from 28 per intermediary in January, to 32 in February and a two-year high of 37 in March.

Conversions of DIPs have fallen by around two per cent, with the largest decrease, 10 per cent, occurring among homemovers.

IMLA suggested that this was due to a shift in focus to remortgages, which had 72 cases of conversion, up from 69 in the previous quarter.

Majority of brokers ‘very confident’ about business and market outlook

IMLA said that despite the slight fall in average case numbers, intermediary confidence remains strong, with 62 per cent of respondents saying they were “very confident” about the outlook for their company.

Nearly all intermediaries surveyed, 98 per cent, were confident overall, and only two per cent said they were “not very confident”.

Over half of brokers, 54 per cent, said that there were “very confident” about the intermediary sector, up from 52 per cent in the previous quarter.

Around 45 per cent of intermediaries said they were “very confident” about the mortgage industry, which is on a par with the record 46 per cent in Q3 last year.

Kate Davies (pictured), executive director at IMLA, said that despite the slight drop from the “record peak” in Q4, evidence suggests that advisers are “maintaining their momentum”.

“The data from the first quarter of 2022 shows a strong level of activity and a solid underlying demand underpinning the mortgage market,” she said.

Davies continued that rising inflation, along with proportionate interest rate rises, mean mortgage market demand could match the rates of 2021 as borrowers seek to secure fixed-rate deals.

“Throughout 2022, as volatile macro-economic trends impact personal finances, advisers will continue to play a crucial role in helping borrowers to find an appropriate, affordable and sensible deal,” she noted.

The team has been recruited internally and will be supported by 16 field-based BDMs who work across Precise Mortgages and Kent Reliance for Intermediaries.

It will be split between the Wolverhampton and Kent offices and the team will be under the direction of Simon Cockerill (pictured), head of intermediary sales development.

Team members include Nathan Chand, Joe Baxter, Carla Elwell, Jack Cope, Amit Vymar, Dhiraj Dhanda, Samantha Brain, Jignesh Mistry, George Williams and Vijay Badhan.

Their contact details can be found through the BDM finder page on each lender’s website.

The launch of the team followed a six-month pilot scheme in the North of England, and during the first six weeks the office-based BDMs made over 960 interactions with brokers, which included inbound and outbound calls and virtual meetings.

The company said that initial feedback showed an “increase in broker satisfaction” and “welcome support” for the field-based BDM team.

Cockerill said the firm was always looking at how it could best support brokers and the goal was to “ensure consistent levels of support could be accessed by brokers nationwide, regardless of location”.

“This is where we can really utilise our office-based BDMs, who complement our already very successful field-based team,” he said.

He added that the pilot had given the company “unique insight” as brokers felt office-based BDMs improved their experience and the results were “extremely promising”

“Rolling out this initiative nationally, so that the majority of postcodes have both a field and office BDM, means we can deliver on supporting brokers with their top requirement which is accessibility to answer pre-application enquiries,” Cockerill said.

Speaking to Specialist Lending Solutions, managing director of Truffle Specialist Finance James Rainbird (pictured), said that the firm had had a record quarter for second charges in its most recent three-month period.

He said it was “happy with its direction of travel” in the space, however, he said that the firm was looking to ensure it had the “right resource going forward to keep pace with demand”.

“There is strong, and growing demand in this product space, and it’s up to us to ensure we are effectively resourced to continue to meet that demand,” Rainbird noted.

Rainbird said that this is an area of growth as consumer awareness of the product increases and lenders continue to bring out new product offerings.

He also pointed to the withdrawal of further advances and remortgages as a potential “boost” to the second charge mortgage market.

Rainbird said that it could be “very difficult” for new businesses to enter the market without “real experience and lender relationships”, adding that lenders’ back-office teams could be “challenging”.

He said that the firm’s underwriters were “working tirelessly” chasing consents, redemptions and building society questionnaires, and that this could slow the process as a lot of bank staff were still working remotely.

“The volume the banks are receiving as well is high. You’ve got to have a good back-office team, good CRM systems in place to ensure that you’re getting those results then for the consumer and for the introducing brokers,” Rainbird noted.

He added that “strong working relationships” with lenders, surveyors and accountants were “absolutely key”.

Rainbird continued that bridging and commercial was a “key area of growth for the firm” and that locally it was looking to grows its first charge and protection division as it was “actively recruiting in that area”.

Based in Penarth, which is just outside of Cardiff, Rainbird said that several lenders had left the high street, which presented an opportunity for Truffle to fill the gap.

He said that Penarth was predominantly made up of over-40s, professionals and quite an affluent area, with many still wanting to have “face to face” meetings.
Rainbird said that whilst it was always looking for the “right candidates” to grow its advisory team, this had to be balanced with back-office support.

“You can write as much business as you want, but if you don’t have the back office support and relationships then you’re going to struggle. So yeah, there’s a balance for us between advisers and underwriting,” he said.

Investing in CRM system to give brokers ‘accountability and better reporting’

Rainbird said it was “investing substantial funds” into a new CRM back-office system, which will “help streamline our internal process” and give “brokers some accountability and better reporting, a case tracking system as well, where they can actually upload documents”.

He added that this would “minimise the amount of traffic” that’s coming into the office, such as emails and phone calls.

“Technology is hugely important for our business going forward and for our introducing brokers as well, if we can make it increasingly attractive for them. It helps in terms of reporting, incentives and client retention– if we have greater automation, it incentivises our introducing brokers to stay with us,” he explained.

Affordability challenge for consumers

Rainbird said that Truffle had seen an increase in applications across all product sectors but was not able to place a number of them due to affordability issues.

He cited several factors that were impacting affordability, including interest rate rises and cost of living increased.

“We’re often still able to find solutions for clients in those circumstances. That’s a positive in itself because we are saying to our introducers, who have those clients, that we are able to help them place those deals,” he noted.

The business offers specialist first charge residential, second charge, first and second charge buy-to-let, bridging, equity release, development finance, commercial finance and mortgage protection business.

“Affordability has always been an issue. But, thankfully, we’ve got lenders that are proactive, and they’re always looking at ways they can perhaps tweak their criteria in order for us to continue to write business and for consumers to have the right products.”

Rebrand has led to increase in new business

Rainbird said that there had been “incredible reception” from existing brokers, the media and local businesses following the rebrand to Truffle Specialist Finance.

He said that there had been a perception from local businesses that the firm only did second charges, unsecured and payday loans, however, this had now changed.

Rainbird said that it had seen an increase in new accounts since the change.

“I think from where the business was and has come from, to where we are today, certainly as an industry and as a business the word loans has become antiquated. If we have a look at the suite of products that we offer, the word loan is not used,” he said.

“I think it was perfect timing for us to just to bring the brand up to date and for it to also reflect on our time in the industry, our professionalism and our commitment to the industry as well.”

Some examples cited include adverts from sub-one per cent deals, low rates that no longer exist, fast decisions in principles, and outdated criteria.

Brokers said the problem is being exacerbated by the fast turnaround of products, with some lenders changing their rates bi-weekly.

According to Moneyfacts, the average shelf life for residential products has varied significantly over the past year.

In May last year, the average shelf life of a residential product was 32 days. It then fluctuated slightly until January when it reached a high of 42 days.

Since then, shelf lives have plummeted, falling to 28 days in February and 21 days in April. The current shelf life of a listing stands at 22 days.

‘Dangerous territory’

Matthew Poole, director of Poole Family Financial, said: “As a mortgage broker it’s easy for us to spot something that doesn’t seem quite right when rates are advertised. But it’s not so easy for the general public when there are literally thousands of deals available at any one time.

“Mortgage rates are changing rapidly at the moment so if you see a really low interest rate advertised, don’t bank on being offered that rate when you reach out to the company advertising it.”

He added that companies that are using these kinds of adverts would be looking to “generate interest, and it will be a lead generation tool.”

“It’s dangerous territory to be advertising interest rates as they can change at any point without notice. Advertising rates that are no longer available is a breach of the Financial Conduct Authority’s (FCA) guidelines, where financial promotions should be clear, not misleading and fair,” he said.

The FCA guidelines also state that promotions and communications to customers should not be promoting products which they know are no longer available.

Graham Taylor, managing director of Hudson Rose, said that he had seen several examples of adverts for rates that no longer exist, mainly on Facebook and Instagram.

He said: “With the market rising as it is, it is currently very difficult to be confident in putting out specific product information.

“So perhaps such firms could be given the benefit of the doubt at being ‘caught out’ with sudden rate withdrawals. However, it is their responsibility to make sure that their adverts are not misleading and the cynic in me might think it is sharp practice to hoover up enquiries.”

Rhys Schofield, managing director at Peak Mortgages and Protection, said that when lenders were changing their rates so often, the public should “take any advert they see with a bucket of salt”.

He said: “My advice to the public is that it’s completely illogical to try to keep up with rates yourself because even professional, qualified brokers with advanced tech, who do this for a living are working round the clock to keep up with rate changes.”

Social media adverts are like the ‘Wild West’

Brokers said that whilst rules around adverts for mortgages, which fall under the banner of financial promotions, were strictly defined by the FCA, they are often not followed on social media.

Scott Taylor-Barr, financial adviser at Carl Summers Financial Services, said there were clear guidelines around what content could be included, the wording, figures and font size for small print, to name a few.

“What I do find really frustrating is when adverts, usually on social media, blatantly ignore the rules,” he said.

Lewis Shaw, founder and mortgage expert at Shaw Financial Services, said that social media was the “scourge of financial promotions”, adding that it was like the “Wild West”.

“There are so many adverts that are misleading, inaccurate or disingenuous, mainly across Facebook and Instagram in my experience, and almost exclusively about debt consolidation. For most consumers, the best thing to do is take them with a pinch of salt and if you think it sounds too good to be true, remember that it always will be,” he said.

Importance of mortgage advice

Brokers said that it’s important to seek out mortgage advice, and that doing extensive research is key.

Taylor-Barr said: “Getting really good quality mortgage advice is always going to pay dividends, but customers should be aware of anything that looks too good to be true, with mortgages or any other deals they see, because often these will be scams at worst or unscrupulous rogues at best.”

He advised customers to do research, go to the website via a browser and check out companies on the FCA register.

“That way you can feel confident you are dealing with a genuine, trustworthy, professional who has your best interests at heart,” he said.

Ian Hewett, founder of The Bearded Mortgage Broker said: “Always try and speak to a broker, some are fee free, some charge, most will give good service.

“Look at reviews, look at their social media, and have a chat with them to find out who you would like to work with. You would do the same for a babysitter, so why not do it when it comes to your finances.”

Mortgage Solutions has approached Meta, the parent company for Facebook and Instagram, for comment but has not received a reply at the time of publication.

Latent defect insurance provides cover for damage as a result of defective design, workmanship or materials, not discovered before the cover commences and after practical completion.

A 10-year warranty on new-build homes protects homeowners of newly built, converted or refurbished properties from structural defects. If there is first party insurance in place it can rectify any issues and cover the cost for complete or partial rebuilding in the event of structural failure, including professional fees and demolition.

It is a requirement of UK Finance, formally the Council of Mortgage Lenders, for all new-build residential open market sales. You will also see it in place on mixed-use schemes and while there isn’t a lending requirement for it, we are seeing an increase in warranty requests from funders and investors on commercial developments.

Fluid market

The recent increase in the number of providers in the latent defects insurance market has resulted in property professionals being inundated with various proposals from providers offering their services.

In a similar fashion to the liquidity levels in the funding markets, this is a positive move for developers and property people. However, it does pose the problem of identifying who the right insurer is for each project and obtaining the most suitable terms for each development.

With that in mind, the need for unconflicted, truly independent advice has become essential. Brokers working with developers on finance are well placed to advise on finance options, but with the growth in new build warranty providers working with a specialist advisory firm, it is crucial for all intermediaries to bare it in mind.

Various solutions

As developers look for more creative solutions to help solve the housing crisis, insurers have adapted their policies to cater for varying scenarios. Brokers working with developers looking to build mixed-use and or larger schemes should always look for appropriate advice on what’s available and most suited to them. When it comes to larger builds, it’s even more important to obtain a full market overview.

The key features for a 10-year new-build warranty include 10 to 12-year building warranty cover from building regulation sign off, defect periods ranging from zero, one and two-years, £1,000 excess per claim per dwelling and assignable policy.

These should come from UK Finance approved companies that are recognised and accepted by mortgage lenders.

Expert advice

Organising new-build warranties can be a time-consuming and confusing exercise for brokers. A number of funding intermediaries are choosing to partner with firms who specialise in handling and placement of such policies.

These specialists can provide objective advice, finding them the most suitable cover for the developers’ project. Our firm, for example, also has access to all A-rated insurance providers across the market and delivers a market comparison enabling developers to make decisions confidently and swiftly.