Degrees don’t matter anymore in the hunt for young talent – Marketwatch

Degrees don’t matter anymore in the hunt for young talent – Marketwatch

However, it is the people that make the industry, and while we share a great business community, it is an ageing one.

So, this week, Mortgage Solutions asks: What can the mortgage industry do to attract new or young talent?

 

James McGregor, director at Mesa Financial

This is definitely a serious problem in the industry, and there needs to be a structural shift.

As an industry, we are very bad at promoting the great work we do and why it’s such a great industry to work in. I ended up in the industry after starting as a cashier at one of the banks, which has worked out great, but I didn’t really know about the industry outside of banking until we started Mesa Financial. The advice I would therefore give to the younger generation that wants to get involved in the industry would be to reach out to any connections they have within the sector and ask them about the route they took.

One of the biggest problems is most businesses are set up for individuals to operate on their own, there is no sense of building a real operational business as many are just a bunch of advisers operating under the same name. This means there is no structure and there are no separately functioning elements, such as marketing departments, sales, finance, operations and HR.

I believe once business structure is set up correctly, you can build a system to bring talent through, similar to international corporate models – essentially bringing talent in at graduate and A level and nurturing them while simultaneously building a more diverse and dynamic business.

As a business, we’re currently building these structures, and also focusing on talent that works outside of the industry.

 

Anthony Rose, co-CEO at LDNFinance

Although I doubt many people set their heart on becoming a mortgage broker as a child, it’s a lucrative job which can be very rewarding. Improving education around this role may help to increase its attractiveness to graduates and school leavers.

At LDNFinance almost a quarter of our workforce is under 25-years-old. We’ve always been successful at recruiting young talent due to the informal but professional culture we have cultivated. As a business, we have been attractive for young people because we encourage and pay for them to take exams, offer employee perks, and reward them for great work.

For our young talent, we clearly define a training and promotion path so the team have something to work towards. As such, they feel motivated for success and work hard to deliver on expectations. We find that once this progression plan is laid out, the team see the earning potential available to them and work hard to overachieve.

Like most brokers, I fell into the industry by chance myself. I am an economics graduate so have always been good with numbers, but mortgage broking offered me the opportunity to combine my numerical skills with people interaction. Over the years I’ve honed my skills and now, am proud to have founded a brokerage whereby I can lead the business, but also share my skills with my team.

However, I firmly believe that a degree is no longer necessary when we’re recruiting, so long as you work hard to learn your skills and the profession. Our workforce is made up of a mix of graduates and non-graduates, and both learn from one another.

For anyone considering a career in mortgages, we find that directly contacting an employer is a good place to start. Include a cover note explaining why you want to work in the industry and what motivates you. At LDNFinance, we also find it impressive when you’ve conducted some self-study as it shows initiative and commitment.

 

David Baker, director at Lift Mortgages

There are definitely younger people coming through, and there is an interest. I’ve had a lot of young people contact me on LinkedIn in response to a talk I did with a well known mortgage recruiter, for example. That said, I do think it’s an ageing population, so anything that can be done to get young people in the door can only make us better off as an industry.

I’d say it’s a good industry to be in, but we have an image problem that isn’t warranted.

We lose a lot of young people who would come into mortgages to the financial advice sector as it’s seen as a bit more glamorous and lucrative, but I think that’s a misconception. Mortgages generally are great business. It’s transactional, which some like and some don’t, but I’d say that there’s minimal after care compared to financial advice. This means you can do a lot of business and you’re not stuck hand holding people’s portfolios for ages later down the line. Mortgage brokers can therefore earn just as much money as financial advisers now due the market changes over the past few years.

Beginner brokers are starting at around £25,000 plus commission, but it’s a long game and the longer you’re in the business, the more people you know, and the more you make over time. Next thing you know, you’re rolling in it.

To bring in new talent we’ve got a programme where we take on a lot of school leavers and train them up. We’ve got an employee called Craig Ryan, for example, who started in the post room after joining us from school then he went to the rate switch team, which is our proving ground and he did great, and now he’s progressed to be a case handler and in the future he’s got aspirations to become a full broker. We’re very proud of him.

However, it’s going to take him about five years to get there and do it all properly. It’s hard graft and I believe you need a certain amount of experience to be a really good broker, and that takes time and training to make sure you’ve got the ability to understand and confidently handle any of the many things that can go wrong. It’s important because you’re dealing with people’s lives here, and their life savings, so you want to be able to react efficiently when things get dicey. So because Craig’s taken the time to get that grounding, he’s going to have a full knowledge of how everything works the first time he picks up the phone instead of us just throwing him in without a real clue how it all fits together and works.

Mental health: ‘Promote the culture that it’s okay not to be okay’ – Marketwatch

Mental health: ‘Promote the culture that it’s okay not to be okay’ – Marketwatch

 

Depression, stress, anxiety, burn out, negative life events, financial difficulties, social stress, exhaustion, loneliness, frustration, pain, sadness, and loss are all a part of life, but that doesn’t stop them being really hard.

No matter our role in society or our respective companies – everyone is fighting their own battle, and often trying to fight the battles of the people they care about too. Most of this is done in silence, catalysed by lockdowns.

With that in mind, and seeing as this week is Mental Health Awareness Week, Mortgage Solutions is asking: How has your company’s attitude changed toward mental health?

Jane Simpson, managing director, TBMC 

Covid and the lockdowns definitely had an impact on the mental health of people across the country and in every office. As an employer we were very focused on mental health throughout the pandemic, and that hasn’t gone away. We have more open and honest conversations about how our staff are feeling and support them on a deeper level.  Having those initial conversations right through COVID has opened the doors to a more open, lasting, and honest dialogue about mental health.

We provided a lot of training and information to our management team throughout the pandemic, which will help them recognise issues early on and deal with a changing workforce.

We found that offering more flexibility with working arrangements, changing to a fully hybrid working office with designated days in the office to collaborate and socialise, gives a better work/life balance. Hybrid and remote working has also benefitted the business, enabling us to employ staff from a wider geographical area and giving us a higher overall quality of candidate to choose from.

Everyone is different, so we discuss working patterns individually. We have seen more staff asking to alter their hours, which has been driven by people re-evaluating their lives during lockdown and wanting to spend more time with family or on hobbies to give them a better quality of life, which we fully support.

Varied mental health support options are key to this too. We have a wellbeing support team for physical, emotional, financial and social support, free access to the NHS Thrive app, and a 24/7 online GP offering mental health counselling among other services.

Naomi Braisby, human resources director, Landbay

At Landbay we are seeing the stigma around mental welfare being lifted, and people are more willing to talk about it and share their experiences, which means we can give colleagues the resources they need much earlier than before.

We promote the culture that it’s okay not to be okay, and encourage people to speak up when they need support. Within the business, we have trained mental health first aiders and an approachable HR team, providing a point of contact and support, and an external employee assistance programme to provide 24/7 professional counselling. We also have “Time out Tuesdays”, where we organise activities for the team to take time out of their day and focus on their wellbeing – we arrange everything from in-office massages to hotpod yoga.

The wellbeing of our team really matters, and the culture here has always been very supportive. We are like one big family – we are still there for one another as we were before and during the lockdown.

Jason Berry, group sales and marketing director at Crystal Specialist Finance, and co-founder at MIMHC

What started off as a Crystal macro-focussed project has now expended to make it a wider market conversation through the Mortgage Industry Mental Health Charter (MIMHC).

What we saw with the internal focus is that our staff needed support and conversation around how they’re feeling to be encouraged, but more importantly, they needed to feel listened to. We put frameworks in place and listened to how they wanted to conduct their work, which has really improved things.

This is serious for us, it’s not just words. Yesterday we had a coffee roulette – our 58 staff members were paired up randomly to have a 30 minute chat with people they wouldn’t normally talk to about how they’re feeling. As a result of this and other changes, our staff now feel listened to and more motivated.

We also conducted an industry survey in Spring 2021 and found that 75 per cent of respondents said their company offered no mental health support. Turning this around is our number one aim.

Off that research, we could see that mental health and issues have been ignored industrywide, so we created MIMHC to come together as an industry and ensure all companies get mental health on their radar, and to stop staff suffering in silence.

MIMHC is only about six months old, but we’ve already got 35 signatories from a really lovely cross section of the industry. We want to get over 200 signatories by the end of the year. We do a quarterly newsletter and provide access to our website with expert-led reference material and guidance.

This spring we found that 46 per cent of companies have mental health frameworks now, which is amazing, but it still means we’ve got 54 per cent of businesses without it, so we’re only just getting started. I think there’s forward momentum around the topic, especially this week, like Shawbrook with its mental health adviser scheme, but even around this week we’re seeing more action.

However, the 2022 survey also showed that there’s still a lot of people who don’t feel great. Brokers are working longer hours and the continually busy market place is running people down from a lack of sleep and continued work stress over years.

I think, despite the progress, everyone knows that we’ve still got a lot of work to do.

You can sign up to MIMHC here.

Inability to meet EPC deadlines could hit landlord property disposals – Marketwatch

Inability to meet EPC deadlines could hit landlord property disposals – Marketwatch

 

The most recent draft deadline is set to be extended from 30 April 2025 to 31 December 2025, with a further extension to 2026 expected. However, time is becoming a serious factor for landlords looking to not be penalised as the currently proposed 2025 and 2028 deadlines for existing and new and tenancies loom.

So, this week, Mortgage Solutions is asking: How realistic is it for professional landlords to get their properties up to required A-C EPC ratings within the proposed deadlines?

 

Akhil Mair, managing director at Our Mortgage Broker

There’s a lot of noise about this and market movement from a lender perspective, which is great.

Regarding the implications, it can be detrimental from two perspectives. Firstly, the cost. The costs of double glazing, boilers, loft insulation and lighting is going to be expensive. Can a landlord get a mortgage tomorrow or not? Can they change the properties and is it cost effective? Also how much will it disrupt tenants in situ and affect those relationships?

Second, the borrowing perspective – if they’ve got a low EPC rating and can’t improve it, does that mean the mortgage will seize? I fear that the EPC law could become a mortgage trap like the cladding issues.

In my experience, while they’re all aware of it, a lot of the landlords we work with are taking it lightheartedly as it’s further down the line, so as advisers we make a lot of noise about it. They’ve been asking for the green products as part of our fact finding exercises anyway.

We recommend A-C rated properties, but most of the older properties have an E or an F. Most can be brought up to spec with a light touch like a few bulbs, but it depends on the property itself.

Every disaster has winners and losers depending on how you look at it and how deep your pockets are. Will a cash buyer with a lot of capital be able to get around the rules because they’re buying in cash?

A lot of our clients are feeling it, they’re always improving their property to get a higher rent and longer tenancies anyway, so it’s something that should be on their minds regardless.

Jeremy Duncombe, managing director at Accord Mortgages

Upgrading properties to be more energy efficient is absolutely the right thing for the market to be aiming for, but the sheer logistics alone of doing so means the current deadlines are ambitious.

There’s a huge amount of property that falls outside the required A-C bandings, and the first deadline of 2025 for new tenancies is realistically, not far around the corner. With that in mind it will take a monumental effort for landlords to get their properties up to the required ratings, much of which will be outside their direct control.

We’ve seen the short supply of tradespeople compared to demand with post-pandemic home improvements, and with that, not only comes a time delay to projects, but significant cost too. Whilst lenders can help with funding, getting the required support from the relevant trades to improve such a significant number of homes feels a real challenge, so it may help to consider extending the deadline to help make sure landlords have adequate time to become compliant.

There are other challenges that may lead to unintended consequences.

If some properties are too far down the energy ratings to be improved within the timescales, we may see an increased number of ex-rentals come to the market as investors see selling-up as an option. Equally, we’re already starting to see landlords turning to new-builds to avoid this issue altogether, but that could create wider supply problems for a housing market that is already struggling to build enough homes.

Whatever happens, it’s vital that brokers are aware of the looming dates and are having good quality conversations with landlords to ensure they can make an informed decision.

Howard Reuben, owner of HD Consultants

For the ad hoc, smaller landlord, the costs could most likely be swallowed as a one-off exceptional maintenance investment, however for portfolio landlords who have a large number of properties sitting at a D or E rating, the prospect of increasing to a C could be not only time consuming, but also incredibly costly.

Older properties, for example the Victorian two-up two-down terraced houses which make up a substantial buy-to-let stock, will often need the most energy efficiency upgrades and with a mooted cost of £8,000 per property, which has been discussed in the press. If you multiply that by 4, 10, 50, 100… we can see the financial crisis, and the knock-on effects that this potential new regulation would create.

If the buy-to-let investors do not have the cash with which to upgrade, we could see the market flooded with non-compliant properties where the buy-to-let investors simply roll their eyes for the last time, and give up on what used to be a fairly passive ‘pension’ pot. The layers of costs, works, enhanced regulations and threats of fines for non-compliance has become too much for many people.

We have been encouraging our landlord clients to act now and a lot are already making changes to increase their rating. In turn, this is enabling them to receive market leading rates as the property can be more desirable, and also take advantage of green mortgages which offer a better interest rate for A-C rated properties.

If the proposed legislation is indeed introduced, for those who can’t or won’t upgrade their buy-to-let properties, we could see the landscape for the smaller landlord start to look quite different on the next few years. We fear for the larger landlords who may have hundreds of thousands of pounds to find too, and it is this sector where we could see the largest disposal of buy-to-let assets in to the owner-occupier market.

This is where we fear for those who choose, or need, to rent rather than buy.

Fast-moving house sales put immense time pressure on brokers – Marketwatch

Fast-moving house sales put immense time pressure on brokers – Marketwatch

This has led to record sale periods, with property being snapped up within 33 days of being on the market on average, with intermediaries left to shoulder the burden of securing a mortgage for their client before another buyer swoops in.

So, this week Mortgage Solutions is asking: Has the pressure on buyers to secure a home quickly had a knock-on effect for brokers? 

 

Dina Bhudia, CEO at P2M Asset Management

We are 100 per cent having to shuffle cases due to the pressure from urgency, and the rates ever increasing means the speed and efficiency of the application is paramount. If business development managers (BDMs) or lender telephone desks are not efficient then they are losing the applications to competitors.

The level of lending seems to outweigh the rate, buyers are needing higher income multiples to meet the higher offers to secure a home. Estate agents don’t help, many are not allowing clients to view the properties unless a decision in principle (DIP) has been evidenced, or even the clients are being cherry picked by the estate agent’s preferred advisers.

Consequently, we are having to get sellers and buyers to ensure they have provided all the documents and make decisions much quicker. Sole trader brokers who don’t have administration support may not be able to meet the increased expectations of speed, as they are having to deal with the whole process on their own.

I really wish lenders could make it easier by requesting less documents, automating initial document checks, and instruct surveys earlier on in the process, this way it keeps the estate agents at bay.

I have a great team, and we are having to prioritise and delegate, however capacity is definitely there, as using CRMs and fintech to assist with managing the process and client expectations. However some cases still need to be discussed more in the specialist world.

The difficulty is more in the remortgage process with lender solicitors, clients find the automated process very frustrating, and the legal process does not seem to be very client user friendly.

 

Alex Winn, mortgage team lead at Habito

The housing market for buyers feels fraught. We have most contact from customers, but many estate agents and brokers working in those agencies often put pressure on buyers to secure their home quickly.

We regularly hear from buyers who’ve felt pushed to use in-house broking services that work from a limited panel and charge fees, which may not be in their best interest. But, if the agent is saying speed is key in the transaction, buyers might feel like they have no time to shop around, or they’ll risk losing their dream home.

Selling quickly isn’t usually an issue; it’s finding the right property and being ready to proceed. That said, there are still limitations that we have to work with, such as solicitor or lender timescales, which typically sit outside of a broker’s influence. I’ve noticed agents can then shift their focus to the next property instruction, so because it’s a seller’s market, the amount of chasing from agents on completing sales has actually declined.

Speed is certainly the name of the game for borrowers when it comes to getting lower rates. Rapid rate changes and product withdrawals are making timings a little more challenging – lenders giving more notice on product withdrawals would be very helpful.

However, with rising product interest rates I’d expect the ‘frenzy’ may start to slow for new lending.

For brokers, remortgaging will continue to be really important as homeowners look for ways to save money on their household bills. For us at Habito, anything that makes the process slicker and removes friction for customers, as fintech does, can certainly help with speed to mortgage offer.

 

Dee Ganesharajah, senior associate at Mesa Financial 

We’ve felt the knock-on pressure immensely. Nowadays, most clients expect everything to have been done yesterday. The fear of not having their offer accepted or being gazumped seems to push buyers to offer over the odds and stretch the realms of affordability.

The knock-on effect to me as broker means coming up with a suitable option as quickly as possible. With so many brokers competing for business at the moment, speed and efficiency is everything. This means being flexible with working all hours, being clued up with lender’s service levels as well as criteria and most importantly, always managing clients expectations.

The lack of supply of houses has also affected work load, as clients keep going back and forth with different scenarios, like property values and borrowing, not to mention rates constantly changing not helping matters. This all results in us re-broking cases numerous times prior to offer.

We have seen a slightly quieter period post-Easter, with clients waiting for new properties to come on the market. I don’t think this will help the frenzy, in fact I think it will exasperate things. However, I feel that volume levels may level off, due to people’s hesitancy around the economy and geo-political issues to sell their property.

Top 10 most read mortgage broker stories this week – 22/04/2022

Top 10 most read mortgage broker stories this week – 22/04/2022

News around when ground rent changes would come into effect, as well as Building Safety Bill amendments, were also well-read by brokers.

Coverage from The Buy to Let Forum also piqued broker interest. Phil Rickards, head of BM Solutions said that EPC legislation and product volatility would be key challenges for the sector and the lender panel added that key opportunities in the sector would be remortgage, holiday let and limited company lending.

Brokers warn of ‘false economy’ of protection policy cancellation ‒ analysis

BTL2022: EPC legislation and product volatility key challenges for buy to let

FCA finalises diversity requirements for listed firms

Deposit loans, no fees, and 100 per cent LTVs; the perfect mortgage can’t exist – Marketwatch

Ground rent charges on new leases to be banned from June

Distance from London biggest influence on town’s house prices ‒ ONS

BTL2022: Remortgage, holiday let and limited companies key opportunities in buy to let

Tough Talk: Bluestone CEO Steve Seal on consumer duty and the fairness of specialist mortgage pricing

MPs refuse to include shorter buildings in leaseholder cladding protections

Lenders reduce loan sizes as cost of living squeezes affordability, report brokers

 

 

 

 

 

Deposit loans, no fees, and 100 per cent LTVs; the perfect mortgage can’t exist – Marketwatch

Deposit loans, no fees, and 100 per cent LTVs; the perfect mortgage can’t exist – Marketwatch

The market has rarely been so turbulent or technical; house prices are soaring to record highs with continued lack of supply against overwhelming demand, and some properties are making more money than their owners do annually. Brokers are also seeing more complex cases and specialist lenders are being “forced into the spotlight” as borrowers’ needs become increasingly diverse.

So, this week, Mortgage Solutions is asking: What is the perfect mortgage product, and can it become a reality?

 

Greg Cunnington, COO at LDNFinance

The perfect mortgage product would be a lifetime fixed rate at two or five-year pricing, no early repayment penalties at any time; no lender fees. How about a 100 per cent loan to value (LTV), all available on an interest only basis, and the lifetime fixed nature meaning affordability can be stretched to 10 times loan to income (LTI)? I can feel lenders beating down the doors to create this masterpiece.

Sounds good right? But the above is a combination of what clients think would be their perfect mortgage product were this an execution-only industry – thank goodness for advice – but the reality is that none of the above would be realistic or possible as a combination. However, elements of all carry true – a mortgage product needs to be priced as competitively and fairly as possible.

In fairness, lenders are doing a great job here, with margins wafer thin right now, but clients increasingly want the flexibility to overpay more, so an increase to 20 per cent of the loan amount from 10 per cent as industry standard would be great. The more products on the market with no early repayment penalties the better, which some lenders already do very well.

The perfect product would be different for every client circumstance. For some of our larger loan clients for example, they love the ability to be able to purchase at a higher LTV but on an interest-only basis with committed bullet repayments to pay the loan down in the initial period, so they like this flexibility. They are also comfortable with an initial short-term product. By contrast, for some clients in settled financial circumstances on basic salaries with no plans to move, a longer-term fixed rate may well be the peace of mind they want.

The key is to ensure we have as much diversity in the products available on the market as possible. Different lenders should play to their strengths and offer different product types, so that as intermediaries we can do what we do best in finding the best option for our clients and their individual circumstances.

 

Charlotte Nixon, proposition director for mortgages and protection at Quilter Financial Planning

The perfect product is always the one that best suits a client’s unique financial circumstances and therefore there is never going to be perfect product for every type of buyer. However, first-time buyers do all face a very similar problem and one that has been massively exacerbated by the surge in house prices and the cost-of-living crisis.

Young people, or ‘generation rent’, have never faced a bigger battle to get onto the housing ladder and the struggle starts with saving for a deposit. The perfect product for this group needs to address the fact that first time buyers keep getting the rug pulled from under them while they save. House prices surge and the deposit they have been building no longer gets them what they need. The advent of lifetime ISAs and the implementation of other government schemes have had some limited success but we need lenders to build into their products a mechanism of helping buyers with their deposit too.

In theory, if a lender feels that a customer has the ability to pay back a large sum over a long period then there should also be a means of lending a smaller amount for the deposit over fewer years at a higher rate.

The increase in the popularity of guarantor mortgages has helped in this respect but there are still many people out there that don’t have this available to them. More innovation in this space could help shape a product that better suits the needs of first-time buyers that are living in fiscally very different times to when many of the blueprints to the products on the market now were created.

 

Nick Morrey, technical director at Correco

Borrower’s requirements are extremely broad, so the perfect product would have to be a mixture of both criteria and features.

For residential it would be a dream to have a product that was competitive in price with two, three, five, 10 and 20-year fixed rates that all have early repayment charges (ERCs) for a maximum of five years or opt out clauses for standard sale/reduction/redemption, and flexible with more than 10 per cent overpayment and borrow back facilities – similar to offsetting but not as far as a ‘single account’.

Affordability would be based on affordability only – no income multiple limit, especially for longer termed fixed rates.

The market did have something similar years ago, but flexible choices have dwindled and longer-term rates have never taken off, largely due to long, inflexible ERC periods.

Another dream would be to add some adverse history tolerance but with slightly higher rates and an automatic re-scoring either every year or at the end of the product term. This would enable an adverse borrower to switch to a prime lending product without the need to remortgage the moment they are able.

Lenders may struggle to provide such options, but some were readily available before 2009. Investment in systems and new ideas has almost ceased, potentially leaving the industry ripe for a disruptor with sophisticated, flexible systems to force innovation and investment beyond just rate and criteria tweaks over dividends and stagnation.

Finally, lenders could try and harmonise their legal requirements so a remortgage requires hardly any legal work at all – something like the current account switch guarantee to encourage consumer choice.

Government action needed to make green mortgages more attractive – Marketwatch

Government action needed to make green mortgages more attractive – Marketwatch

 

The proposals, which have yet to come into law, mean landlord’s properties should have an EPC rating of C or higher by 2025.

Generally, green mortgages aim to reward customers for making their properties as energy efficient as possible, preferably achieving an Energy Performance Certificate (EPC) rating of C or higher.

However, brokers have expressed doubts about the current benefits offered by green mortgages, and have made a few suggestions about what more needs to be done to make ‘going green’ more enticing for their clients.

In this week’s Marketwatch we address green mortgages and their impact on the market, borrowers and the environment.

 

Matthew Fleming-Duffy, director at Cherry Mortgage and Finance Ltd

It seems to be legislation that’s driven the market to create green mortgage products, as most people don’t ask for a green mortgage when enquiring about their borrowing options. Britain has a long way to go before these products really gain traction, but further legislation may be necessary to ensure homeowners are encouraged to transition away from fossil fuels.

It’s great to see lenders picking up on it though. Saffron Building Society, for example, is offering a two-year fixed rate at 2.07 per cent up to 80 per cent loan to value (LTV). The Green Mortgage Hub – launched by the Green Finance Institute at the end of 2021 – currently lists 36 products which offer financial incentives to owners or purchasers of energy efficient properties.

Landlords may feel particularly under the cosh, but they are particularly well-served in the market now with better pricing being offered by several lenders for properties that are energy efficient.

They are facing fines for non-compliance with the Minimum Energy Efficiency Standards legislation, and generally being unable to remortgage if their properties have an EPC rating below E. However, replacing halogen lightbulbs with LED bulbs and insulating the walls and roof are simple, low-cost ways to improve a property’s EPC rating. More expensive solutions like double-glazing and installing a new boiler may become essential as the government drives its legislative plan, which may mean some landlords decide to sell rather than consider such a cash outlay.

 

Lewis Shaw, founder at Shaw Financial Services

Green mortgages are a gimmick, a way for lenders to jump on the green bandwagon to get some of the kudos that goes with being a responsible and caring business pretending to care about climate breakdown and ecological collapse. They’re trying to prove they’re doing something positive about climate change, yet, at the same time, the big six and others are still bankrolling and investing in fossil fuel extraction and the fossil fuel industry – the same industry that has caused, and is continuing to cause, environmental destruction. Talk about bait and switch.

The majority of green loans are for category A or B properties, which is fine on paper, but it’s a load of rubbish in practice because the new properties are actually built to poor standards. Most of the time the properties are still under construction when the EPC surveyors are looking at them and therefore make much of the rating up on assumptions based on current construction methods and principles, not through a proper post-build check.

The reality is that not a lot of these new homes are actually as energy efficient as we’re lead to believe. I suspect that once these sites are built, if you got an assessor out there they would be fine if they’d been built to the book, as you’re meant to, but new builds are notorious for having problems with the standard of development. They may have green mortgage labels on them but they’ve got heat holes all over a lot of them.

In that respect the green mortgages are almost exclusively for new builds, but they’re not a true reflection of the reality.

We need to overhaul the listed building status rules to allow owners to make old buildings more energy efficient. It’s great having all that history, but if we can make subtle yet efficient changes to them we’ll be able to fight the climate catastrophe instead of contribute to it while still enjoying their aesthetics.

Furthermore, the UK accounts for a very small amount of the world’s emissions without including our global footprint from imports. Around 40 per cent of our energy use is directly related to housing, but it’s such a small amount on a global scale, especially when the big six who are giving out “green mortgages” continue to lend billions to fossil fuel companies – it’s absolute nonsense.

 

Imran Hussain, director at Harmony Financial Services

Right now, I feel green mortgages have very little impact on the environment. Green mortgages could be perceived as a bit of decent PR by lenders right now as they aren’t really available to anyone purchasing an older property due to the EPC requirements as millions of UK homes will struggle to achieve a C or higher, so the market is pretty much just new builds.

It’s a great idea to encourage people to be more eco-friendly and that initiative is good, but we need government buy-in to ensure that all the properties in the UK are involved, not just new builds.

Whether or not a mortgage is green does not influence affordability in the slightest as clients’ borrowing is driven by income and current debts, but what is advantageous is the rates being ever so slightly lower so can save the borrower a few pounds per month. It’s a case of whether people have that money to invest, and many people don’t.

But, the government could give or lend £10,000 per house hold to be spent on energy improvements that would have to be proven to be spent on the home through receipts to avoid fraud, much like work expenses. They could simultaneously invigorate British manufacturing through providing specific grants for windows or home improvement products that are manufactured in the UK, making triple glazing cheaper because it costs thousands, as a long-term solution that also encourages British manufacturing and creates more jobs.

The government has reduced taxes on energy efficiency, so why not put a tax break or rebate on things like insulation and solar panels for lofts and walls? It needs to be worth the time and resources to make a property more energy efficient for the individual.

They could subsidise pensioners’ homes, keep the elderly warm and when they move or pass on it will still be a C for the next person.

The type of property matters too – with older properties there’s only so much insulation that can be installed, and insulation will have eroded over time unnoticed. If you’ve got a homeowner in a terrace then there are different things that they can do, or afford to do. They won’t be able to put up solar panels for example as they’ll end up on the neighbour’s roof, but rewiring with more energy efficient wiring could be an option.

Lenders could do something similar, but they have the problem that everything is about affordability. They could have a charge on the home, but not side-step Mortgage Market Review (MMR), to be sure that from a lender perspective it can be justified.

Ultimately we don’t want pensioners using their savings on home improvements, so if the government could match a limited low LTV loan, like they do with Gift Aid, then consumers could pay it back at capped low interest, like the base rate, or one per cent fixed, as the money would be deemed cheap. It could be a separate loan guaranteed against the property, or a charge on the property so the lender gets the money and interest back when the place is sold.

 

Rob Peters, principal at Simple Fast Mortgage

Green mortgages offer eco-conscious borrowers an ethically appealing mix of reduced fees and interest rates combined with a sense of ‘doing their bit’ for the planet. Ultimately the mortgage has nothing to do with it – it’s the property that’s green.

I don’t think that the incentives provided by green mortgages at the moment are really worth the investment. The key thing is that if the work you do is going to provide long term benefits and cost savings then it’s worth it, so you should look at the green mortgage incentives as a bonus, rather than the main reason to do.

We recently placed an investor in Scotland with a green mortgage. He was an expat with two properties, one was a B and one was a C rating. He took a green product deal on the B-rated property and it provided 0.75 per cent saving in lender fees, a 0.15 per cent lower interest rate and £500 cashback. Overall, the client was almost £3,000 better off over the five-year term based on the loan amount.

But the question was whether it was worth him bringing the other property up to a B and it just wasn’t worth it. It would have meant disturbing the tenants and the building costs would have been more than £3,000 incentive, so he went with a different option and dodged the hassle.

Chatbots are as much use as a good FAQ section – Marketwatch

Chatbots are as much use as a good FAQ section – Marketwatch

However, with an often limited set of responses they can garner mixed reviews from brokers, with some seeing them as a waste of the time as unsatisfactory answers lead to them ringing the lenders’ business development managers (BDMs) anyway.

So this week, Mortgage Solutions is asking: Are there any instances where a lender chatbot has successfully resolved an issue or answered a question?

 

Dina Bhudia, CEO at P2M Group

I tend to use chatbots when I need clarity on lending criteria especially on what types of income they will consider. It’s speedier in terms of getting answers and can save time in certain instances, especially when you just don’t know where to search on the lenders’ website due to complexity and different layouts.

I would however avoid chatbots when it comes to getting clarity on things that aren’t really searchable on the website. Things like what type of property the lender would lend on – the number of storeys, multi-unit freehold blocks (MUFB), flats above a commercial unit like a shop; or where the client circumstances are soft facts, like a house with two or more kitchens or out buildings.

Client scenarios are also something that chatbots are pretty useless with – where there’s extended families living in the property, multiple incomes are needed for affordability, and disability income. Or when regular outgoings change drastically, like when a child switches from fee-paying to mainstream schooling. Clients circumstances also change if they are going to move into the property they were letting out.

There’s also the cultural element, like how BAME (black, Asian and minority ethnic) communities are more likely to share costs, and bills are paid by other members of the household, which underwriters generally have a lack of understanding on, let alone the chatbots.

 

Payam Azadi, director at Niche Advice

In short, they’re bloody annoying.

You’ve got a couple of lenders doing different things – the more historical lenders have live chat with an individual behind them and it’s not a standard scripted engine. They’re really useful because it’s hard to get hold of a BDM. The fact that it’s written and saved is great, especially when we’re looking for criteria.

However the people who are manning those chats often need better training – you can ask the same question and get three different answers – but the facility and use of it is absolutely awesome.

Then you’ve got ‘lazy live chat’, where the lender’s put a bot on there with a set of answers. It’s useless and a glorified FAQ.

It’s okay if you’ve got very basic questions but often we’re dealing with multiple issues, like ‘what’s your minimum income and your minimum age, do you go beyond retirement for income’ – you’re amalgamating three different things in the chat, for which the FAQ bots are useless. Lenders would be better off having a more comprehensive FAQ section rather than wasting their money on a semi-intelligent bot.

 

Nick Mendes, mortgage technical manager at John Charcol

Sometimes it can be very frustrating depending on the lender and their system. With Natwest, for example, their chatbot will often divert you away from what you want, but other lenders, like HSBC, have one where if it can’t answer the question it’ll put you straight through to the BDMs, which is great.

At the end of the day the chatbots are good for the lender to filter out simple or stupid questions, so it frees the BDMs up to answer more complex ones. As a broker we enjoy talking to people, but sometimes you’re on the phone to a client and the chatbot can give you an answer while you’re talking to them.

There are just a few things that need to be ironed out.

It’s another tool that saves time but fundamentally I wouldn’t trust everything it comes up with. It’s like trusting new tech in general – you punch in the things you need to check, it gives you an answer, but you then check the website or speak to the BDM anyway just to be sure.

The lenders that really encourage people to use the technology, like Accord, are really clear about what the chatbot can help with. It also comes up with the higher source questions and uses that data to quickly funnel down things that are coming up frequently and bring them to the top which is really useful as there’s normally a reason why it’ll be a common theme.

It helps spot things like an anomaly, or finding out who to contact. It’s really clear and comes up with quick updates.

 

 Niamh Byrne, head of mortgages at Financial Advice Centre

I personally have found chatbots efficient, helpful and time saving particularly when using them for quick criteria checks or application progress reporting. I use the bots regularly, often for straightforward criteria advice and enjoy not having to sit in a call queue.

Similarly, many lenders have now integrated their updates team to the chat service, which again saves time when we are just checking receipt of documents and lenders assessment timeframes.

The team operating the chat are trained to the same level as telephony reps which gives me confidence in their reliability, and ability to get the job done when needed. Downloadable transcripts of the chat also support our compliance measures by evidencing research, tracking and due diligence for each application. Chatbots have certainly improved processing and would be my ‘go to’ service for basic advice and processing.

Admittedly, by nature of the chatbot they do have limitations. Due to the complexity of some cases, and individuality of clients circumstances I feel telephone access to a BDM or call centre will always be needed. Rapport, understanding and one to one relationships are not easy to build over an online service, and given the tailored nature of our advice process we often still rely on the ‘human’ interaction telephony services offer.

Work performance issues can be staved off at recruitment but some things are unavoidable – Marketwatch

Work performance issues can be staved off at recruitment but some things are unavoidable – Marketwatch

 

Particularly during the pandemic where people would have been juggling many things at a time, the need to maintain a certain level of performance while being considerate to factors outside of an employee’s control is always important. 

So this week, Mortgage Solutions is asking: How do you manage a team member whose performance has slipped? 

 

Jane Simpson, managing director of TBMC 

It’s really important to us as a business that we create an environment where our staff are happy in their jobs, which we find results in fewer issues with productivity.  

This starts right at the interview stage. Once we have the correct people in the door, a level of responsibility sits with the business to get that person to a competent level. 

We will extend probation if there is a need – we would rather get the individual to the level they need to be and to a place where they feel confident. This can prevent the need for ‘performance management’ later down the line. 

That being said, there are of course instances where performance slips.  

Managers have weekly catch ups and formal one-to-ones with staff and we try and broach the subject as early as possible. There is usually an underlying reason and if we get in early enough, we can try and help resolve the issue.  

Where an individual’s team has had periods of under-staffing due to sickness, service levels may have been impacted. General market changes or trends will be considered, as well as the overall performance of the company and other staff.  

We take this into consideration before any personal performance conversations are had. It’s important that as a business we are setting targets which are stretching but also realistic. 

Where performance levels have dropped, or attitude towards the role appears to have changed, that would be reason for a conversation. We can then discuss any underlying causes and support needed. 

Initially, we will try and informally discuss an action plan and give them one or two months to show an improvement. If we don’t see improvements within this timescale we can move to a more formal plan, but we would rather avoid this. 

If the underlying issue is one of a personal nature, we also offer our staff access to an employee assistance scheme or a wellbeing team. 

Newer staff will be receiving a higher level of support and given lower targets for up to six months but expected to get up to the average levels within that time.  

Annual targets can change depending on the industry and goals of the company, we assess the performance of the business and plan for the year ahead, which can alter targets. 

 

Andy Wilson, managing director of Andy Wilson FS 

I imagine that for larger firms, the biggest measure of performance is directly related to the financial side of business production. However, I do not use this to determine whether a colleague is under performing or not. 

We have two mortgage advisers in the business, and myself specialising in equity release. One has been with me for three years, and the other only seven months, but they are both time-served, with many years of experience and honed skills. More importantly, they are both self-employed consultants, and so earn a proportion of the business they generate. This is a powerful self-motivator.  

There is no ‘coasting’ with a fixed salary. 

We do not have production targets, and I do not micro-manage either of them. My supervision is one of a light-touch approach. They know the standards we need to meet, and both aim to exceed them. If they want or need time off, they take it. I encourage them not to have holidays at the same time, but even a necessary clash is okay, as I can step in to cover the mortgage function for short periods. 

This all means my measures of a change in performance are perhaps different to many.  

One of my main focus points is whether they are meeting the professional, ethical and integrity standards for the business, which we have all signed up to. I can see this from file checks, and client feedback forms, and the lovely comments I receive from satisfied clients. 

I carry out file checks over and above those done by our network, and would pick up advice and administration issues there.  

Dealing with these would involve a coffee and a chat, and to try and understand what is driving the reduced performance.  

I am very aware of the effects external matters can have on people, and Covid has been an obvious potential cause of stress and distractions. We meet as a team every week despite working from three remote sites, and discuss issues, problems and business obstacles and we try to eradicate them where possible. 

Our only other team member is my wife, who handles the financial and admin sides of the business. I can tell you now, she is never on the receiving end of under-performance comments.  

I cannot afford to have the withdrawal of labour in both the business and our home that would surely follow. 

 

Dominik LipnickiDominik Lipnicki, director of Your Mortgage Decisions 

I think that everyone’s form fluctuates to some degree and that is to be expected.  

First and foremost, I believe that the only way to truly compare adviser’s performance is to ensure that the appointments that they see, on paper at least, are placeable and ethical. What you put in is what you get out and quality over quantity is king. 

I think that recruiting people with the right ethics and motivation is very important as you cannot instill that via training sessions, but sales targets are of relatively little use, our advisers do a great job for the clients that they see and that results in sales, you cannot look at it the other way around. 

Allowances must always be made for people’s personal circumstances and as the last few years have shown, we never know what’s around the corner. Particularly during the first phase of the pandemic, we had some advisers that needed to shield, and it was our job to ensure that we used technology to make that possible. 

As a company, we have advisers that have a huge amount of experience as well as some who are new to the industry. Whilst we support the experienced advisers, we effectively mentor newer colleagues to ensure that they have all the support required to be successful from day one.  

There is no one size fits all, each person will require development in different areas and we very much tailor make the ongoing training to support our adviser’s individual needs. 

 

Top 10 most read mortgage broker stories this week – 18/03/2022

Top 10 most read mortgage broker stories this week – 18/03/2022

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