Brokers who do the least business take up most of lenders’ time – Star Letter 06/05/2022
This week’s comment came in response to the article: Randomised BDM help desks weaken lender-broker relationships – analysis
Arron said: “According to a Paragon poll, most brokers submit around 40 cases a year. The Financial Conduct Authority (FCA) suggests most brokers only use three to nine lenders.
“Many business development managers (BDMs) have told me it is these brokers who do so little business and lack experience with lenders that can take up 80 per cent of their time – Pareto’s Law – going through every part of the application process. This time is better spent responding to more productive brokers.”
Landlords selling up
The second comment came in response to the article: Dramatic rise in number of no fault evictions
Charlie said: “A lot of landlords are selling up, in this case there would be a Section 21 notice. They [government] wanted rid of private landlords and it’s starting to happen, especially the smaller one to three property landlords.”
‘It is time to ban agents from selling services to both sides of a transaction’ – Star Letter 22/04/2022
This week’s comment came in response to the feature: ‘Immoral’ estate agent sponsored advisers are bad for everyone ‒ JLM Mortgage Services
Arron said: “It is time to ban agents from selling services to both sides of a transaction, as it has muddied who is their customer and whose interests are primary.
“Inflated legal fees are now becoming the norm with £500 referral fees. Together with compelled mortgage advice, none of this serves consumer interests or protection.”
Darryl Dhoffer added: “I pre-arm my clients who are looking to buy with the following – and it does seem to work with some agents: ‘The Estate Agents Act 1979 states that every offer must be put forward to the seller regardless of whether the buyer has obtained their mortgage from the broker recommended by the estate agent’.”
In-house referrals for estate agent and developer services should be banned – Star Letter 18/03/2022
The first comment was in response to the story: End to doubling ground rent terms for thousands of leaseholders
Arron said: “This scandal was possible because developers are still coercing buyers into using in-house brokers and solicitors. These should be independent parties looking out for the buyer instead of their income generator.
“The government needs to ban developers from selling or recommending any services to buyers; alas there will be backhand deals if there is a grey area.”
Arron added: “The same should apply to estate agents as I still get cases where buyers are told their offer will not be put forward if they do not use in-house services.
“Buyers cannot be assured of independence nor confidentiality, so the only safe option is to ban referrals.”
Landlords are victims of cladding scandal too
The second comment was in response to last week’s Star Letter article, where a reader suggested buy-to-let landlords should be prepared to pay cladding costs as part of their property investment risk: BTL landlords should pay cladding costs – Star Letter 11/03/2022
Kerry Pace said: “I am a buy-to-let landlord by accident rather than design. My first buy-to-let – a very modest 450 square foot one bedroom flat in Croydon was my residential property – bought before my marriage. There were penalties attached to the mortgage so I kept the flat. I wasn’t even on the mortgage of my first marital home.
“Our cladding affected flat was bought – same size as the first buy-to-let – five years ago for our own use, not as a buy-to-let initially. We tried to sell because it wasn’t suitable for us. We found we could not due to cladding. In the meanwhile we had found a more suitable property which will be our ‘forever home’ when we return full-time to London.
“We would have sold the cladding affected flat but we can’t. We would have sold the only buy-to-let we had until this issue started, but now we can’t because we had to raise the mortgage to enable us to buy the new flat. This means we now have a massive capital gains bill we cannot afford right now.”
She added: “Even with cladding ‘sorted’ we won’t make a penny on the sale of the flat as it’s actually dropped in value since the purchase and I suspect it will be tainted by all of this.
“How can it be OK to provide help to leaseholders with no regard to status and yet discriminate against landlords with leaseholds on 11-18m flats? This is just unfair. It is clear it is unfair to discriminate victims and treat people differently.”
Kerry also responded to the article: Reimburse leaseholders for cladding costs and include portfolio landlords in exemptions, MPs say
She said: “Landlords are taxpayers too and are not to blame for this. You cannot discriminate in this way. Nobody expects to make a profit on sale of any asset, but nobody should be expected to find potentially massive sums to fix something that isn’t their fault.”
Landlords should realise property is a risk and pay cladding costs – Star Letter 11/03/2022
Landlords should of course pay for the cladding cost. They cannot expect the taxpayer to subsidise the profit they make on selling the property as they have enjoyed a good level of rental income over many years.
Tricky mortgage cases are more rewarding and lead to referrals – Star Letter 04/03/2022
This week’s comment came in response to last week’s Star Letter: Brokers fear ‘rise of rejection will lead to panel removal’ – Star Letter 25/02/2022, where a reader suggested that brokers felt nervous when dealing with complex cases as they feared having mortgage applications denied would lead to them being removed from lender panels.
In response, Alykas236 said: “Surely, the ‘tricky’ cases are the ones brokers need to be helping on?
“Often, the tricky cases are a) more rewarding – professionally as well as financially – and b) lead to more referrals and add-on protection and general insurance sales.
“Brokers dealing in purely ‘vanilla’ cases are surely spelling the end of their own businesses? Adding value and expertise is why we are in business, no?”
Brokers fear ‘rise of rejection will lead to panel removal’ – Star Letter 25/02/2022
This week’s comment came in response to research from Bluestone Mortgages which showed that over three quarters of those surveyed who were self-employed, had a blip in their credit history or no credit history, but their financial situation was otherwise stable, had decided not to apply for a mortgage due to a fear of rejection.
Reader 5Lk9m2Q7NR said: “[It is] Not only retail customers but also brokers [that] are in fear of rejection. We are a broker but we are picky on our customers. We are worried a rise of rejection will lead to panel removal which basically means [the] end of our business. We avoid tricky cases and this eventually hurts customers.
“I’d blame lender’s non-transparent broker panel review process.”
If govt wants to improve housing stock, bring back green grants – Star Letter 04/02/2022
This week’s comment came from Andy Wilson, in response to the story: LLLE2022: Lifetime mortgages can improve energy efficiency of UK’s housing stock – Singleton
He said: “The problem is that no matter what energy savings measures you try and retrofit to old houses, the installation costs will nearly always outweigh the energy savings, even in the long term. There is no guarantee that the current sky-high gas prices will continue beyond a year or two.
“If you then add the cost of borrowing the money to the installation costs, most older homeowners would never break even. However, it is more easily justified if it makes the home more comfortable and warmer to live in, and so improving the quality of life.”
Wilson added: “If the government want to improve the housing stock to become more energy efficient, they need to once again dish out green grants – and this time, not allow spray foam insulation to be one of the measures used.”
The property sector should have an independent valuation process – Star Letter 08/10/2021
This week’s comment came from Adam Hosker, in response to the feature: Let’s drop the term ‘down valuation’ and unify the industry – Baguley
He said: “Totally agree but if you want this to change, its more than rebranding down valuation. It starts by recognising valuers are not infallible and putting in place an independent valuation process.
“Let’s fix it rather than putting on a rebranding bandage.”
He added: “Yes, agents need to present why they believe valuations may differ, then what next? Fix the next and there is less of an argument.”
Long way to go before brokers get on board with ‘smoke and mirrors’ crypto-mortgages – Star Letter 01/10/2021
This week’s comment comes from Andy Wilson in response to the story ‘Coadjute creates first UK cryptocurrency for mortgage transactions‘.
Wilson writes: “Sounds wonderful, doesn’t it? No more delays on the day of completion, less stress for the homeowners, fewer irate phone calls for the mortgage brokers, estate agents and solicitors sat on the back of the removal wagon with nowhere to plug the kettle in.
“However, mention the word ‘cryptocurrency’ to any of those parties and you will get an immediate response of ‘too risky’ and ‘it’s not for us’, me included.
“I don’t profess to know anything at all about bitcoin, cryptocurrencies, blockchain or wallets (other than the one with my Costa card in it) and frankly I don’t need to. Financial transactions in this country should be in good old fashioned sterling, including house sales.
“Everyone can understand that; it is (relatively) safe, money gets to its destination eventually and there is no risk of having your life savings turned into a digital string of numbers that can be stolen in seconds and never, ever traced again (my own perception, but probably not uncommon).
“I accept I am perhaps a dinosaur in this respect. But there is a long, long way to go before ordinary mortgage brokers need to get on board with such innovation, and the scary smoke and mirrors world of cryptocurrency.”
‘Sub-one per cent deals are great for borrowers’ – Star Letter 27/08/2021
This week’s comment was in response to our Star Letter last week, where Lankydes said sub-one per cent deals were “utter stupidity”.
Positivethinker17 said: “[With] fractional reserve banking there’s never really been any value to the money.
“[There is] nothing new here and sub-one per cent deals are great for borrowers.”.