Bridging
The green housing agenda could drive greater second charge and bridging demand – Belton
The need to improve the UK’s housing stock and make it more efficient could lead to more demand for second charge and bridging products, so brokers need to be aware of all options.
Speaking at the London Institute of Banking and Finance (LIBF) mortgage conference on Wednesday, Danny Belton, head of lender relationships at Legal and General Mortgage Club, said brokers were not expected to become experts but they “can’t shy away from this”.
He added: “You are going to be the first port of call for many customers. Is your knowledge and expertise at the level where you can say ‘this is the agenda, this is what’s going on, would you like to find more information’? ‘I can point you in the right direction. I am the person who can help you arrange that finance’.”
He said brokers would need to look at options they may not otherwise consider and broaden their knowledge, adding: “It [green agenda] will see the growth, potentially, of more second charges. How many of you advise on that?
“We will see more growth in the bridging sector. Smaller loans may be required by some as they may not want to give up their mortgage, so we have to look at other options.”
He said this also would require careful consideration around what lenders to choose as some did not accept a second charge on top of a first charge mortgage.
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Belton said: “I think that needs to change, I think there needs to be a bit more openness about it to recognise that customers have taken these loans for the right reasons, in order to improve their property as part of the green agenda.”
Non-banks and Consumer Duty
Belton said as Consumer Duty was coming down the line, brokers should think about whether their service provided fair value.
He said lenders had already issued around four to five fair value statements, while others had published around 10.
Belton said: “The thought is there, everybody is doing it. I’m challenging those who are not covered by Consumer Duty i.e. lenders that offer non-regulated products, to actually produce a fair value statement. Why? Because that’s good practice.
“You want to know that advisers have thought about their propositions and are doing the right thing for your customer.”