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Thinking Cleary: Whoever wins, new homes are crucial

25 May 2015

As I am writing this column I am eagerly awaiting the results of the General Election. Which way it goes could have dire consequences for the nation and I have my fingers crossed that the electorate once it gets to the privacy of the voting booth will give one party a majority.

Both the main parties have housing high up on their agenda and specifically the building of new homes. The Labour Party have stated in their manifesto that they will get 200,000 homes built per year by 2020 and the Conservatives have stated that they will build 400,000 new houses on Brownfield sites and 200,000 starter homes. But are these just sound bites designed to woo votes or is it something that they can deliver.

Looking back to history for some insight, it would indicate the targets being set are achievable but I had to look back a long way! Post war Britain enjoyed a couple of decades where 300,000 new homes were being built every year and on a few occasions up to almost 350,000. No doubt the destruction caused by bombing raids had a profound effect on post war politicians but from the late 1960s the number of new build started to decline and this trend has continued to this day where we are now building less than 150,000 new homes per year.

Both main parties have presided over a declining housing stock; back in 2000 the Barker Review of Housing Supply concluded that we needed to build 250,000 new homes per year in order to prevent spiralling house prices. The best we have done since then was in 2006/7 when 219,000 new homes were built but unfortunately the financial crisis put paid to that and we hit a post war low of 135,000 mildly recovering last year to 140,000. So based on the stats Politicians, at least of late have not got a great track record in delivering on the new build promise and the consequences are now at crisis level.

If I were in charge for a day I would take Housing Policy out of the political machine and hand the powers to an Independent Bank of England. Housing strategy needs to be looked at in 50 year cycles and with governments only having five year cycles this leads them to making tactical decisions and missing the glaringly obvious bigger picture.

Surely, the time for housing being used as a political football should come to an end. If the Bank of England were in charge of housing policy and had a 50 year plan I doubt very much whether they would allowed the country to run out a bricks, especially as bricks are pretty important in the house building process. Virtually every poll running is predicting that no single party will win an outright majority so it is possible that one or more of the smaller parties will become King Maker.

The Liberal Democrats pledge is based on building 300,000 new houses per year, the creation of at least 10 new Garden Cities and a Rent to Own scheme. UKIP wants to build a million homes on Brownfield sites by 2025 and the SNP the least ambitious wants to see investment to create 100,000 affordable homes built. If the result is a severely hung parliament then my guess is that we will end up in a political quagmire. Despite my views I doubt whether the necessary powers will be handed to the Bank of England but I do believe that the house building crisis will force which every party or parties get into power to get serious and tackle the issue. Rather like the shortage of bricks there is a shortage of lenders active in the new build space and that is one of the reasons why I am putting new build growth high up on our agenda. At the moment there are no specialist lenders active in the new build space so unless you are a grade A, employed customer with an exemplary credit score getting a mortgage for a new build home is just as difficult as getting a mortgage for a second hand property. It doesn’t make any sense to me that just because a person is self employed or was late paying a mobile phone bill a year ago that they should be excluded from buying a new home, there is a need for lenders and intermediaries to play a role if the Country is to finally crack the proverbial new homes nut.

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Viral Experiment - let's do it together!

13 May 2015

Simon Carr, Sales Development Director

Hey hang on a minute; it’s not that kind of experiment! Let me explain as I rub my hands together, characteristically in the style of a mad professor. What I’m looking to do is call upon your internet prowess – well let’s face it you’ve found your way here, so by the powers of deduction you have at least got internet access... in fact, I’d wager you have email and the chances are that you have one of those crazy social media account things – LinkedIn or Twitter?

Here’s the thing. I want to be totally clear. I want us to go viral.... together.

Second Charge Loan Viral Definition


1. of, relating to, or caused by a virus. 2. pertaining to or involving the spreading of information and opinions about second charge loans from person to person, especially on the Internet or in emails: 3. go viral, to spread rapidly via the Internet, email, or other media

Why do I want to go viral?

Let’s face it; the whole is greater than the sum of its parts!

I’ll be honest with you: I don’t care who does it, be it other lenders, our Preferred Master Brokers or Mortgages Brokers (play the theme tune) and so on. This is definitely a case of the more the merrier and, after all, we are all driving the same objective, to raise the profile of second charge loans across the mortgage intermediary industry.

So here’s what you get for spreading the word. You get an e-book, let’s call it Education (see what I’ve done there - read my previous blogs), not to mention possibly one of the greatest opportunities ever presented to you. It’s not a cheap scam – there are no hidden costs, definitely no upfront fees; it’s free – think of it as a safety blanket.

In my previous blogs, I discussed education, education, education with a small pinch of dedication – know your market, become a grandmaster of your specialist noble art!

**Shocking spoiler alert** I really don’t care if Prestige Finance, Paragon, Nemo Personal Finance, Blemain Finance, Optimum Credit, Masthaven or Central Trust get deals referred to them off the back of this blog and its viral intent! What I do hope is that Master Brokers, Lenders, Mortgage Networks, Surveyors and Mortgages Brokers (play the theme tune) unite to create a truly widely spread marketing campaign, highlighting the second charge market to all mortgage advisors.

And here is how we do it....By definition going viral uses resources of others (starting with the host - LoanTalk). Well, that’s exactly what I am proposing to do. I would love nothing more than for you all to retweet, share, like (you know the score) this blog, but it has to be from Loan Talk. Basically, join me by sharing this e-book promoting the benefits for second charge loans to the Mortgage Intermediary industry.

Remember, we are promoting the benefits of a second charge loan not the benefits of a Precise Mortgages (although our products are pretty hot!). Therefore, the sum of the whole - you, me and everyone, is greater than the sum of its parts – you!

Hopefully you will have read and shared my other blogs. If not please read and share, they will start to make sense – I promise you!

So education, education, education. Prepare the theme tune, we are going viral. That’s what you need. If you wanna be the best, and you wanna beat the rest. Oo-ooh! Education is what you need. (Trumpet Solo) Education’s what you need, if you wanna be a #MORTGAGEBROKER!

Ladies and Gentlemen, I present to you possibly, the greatest opportunity the mortgage broker market has ever seen – It’s called second charge loans, a facility to consider not ignore.

To view the e-book click here.

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Fitch upgrades Precise Mortgages Servicer Ratings

27 April 2015

Charter Court Financial Services Limited (CCFS), which operates under the brand names of Precise Mortgages and Exact Mortgage Experts, has received several upgrades from Fitch of its Primary and Special Servicing ratings as follows:

  • UK Primary Servicer Rating upgraded to ‘RPS2-‘ from ‘RPS3+’
  • UK Special Servicer Rating upgraded to ‘RSS2’ from ‘RSS2-’
  • The improved financial condition of CCFS has helped to drive the ratings upgrades. CCFS was awarded a banking licence on 6th January 2015 and in doing so the business met the Basel III liquidity ratio requirements as well as undergoing an intensive review by the Prudential Regulation Authority.

    The ratings reflect the high level of industry experience amongst the senior management team. Stability of this group is demonstrated by the fact there have been no departures from the leadership team since Fitch’s first review of the company in 2012.

    Alan Cleary, Managing Director of Precise Mortgages commented: “We continue to develop our specialist lending proposition for our intermediary partners and this positive news confirms that our strategy is being successful.”

    For further information, please download the reports from Fitch Ratings’ websites.

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    ''Spoiler Alert''

    22 April 2015

    Simon Carr, Sales Development Director

    I have absolutely no idea what this means, so I used my internet machine to look it up. I was surprised at what I found,

    spoiler alert

    A phrase, sentence, or really any form of communication that completely ruins that show, movie, or book series or latest news by giving away key plot points or twists.

    Spoiler alerts seems to be cropping up on social media platforms all the time, in fact, I was gazumped by my very own @precise_mtgs only last week who announced the launch of our new second charge product range on Twitter a day early!!!! #Howveryrude

    It seems today’s news is, so yesterday and next week's, we already know.

    For some time I have been fascinated by the social media space, how powerful it has become and therefore how it needs to be controlled. Think of your target audience - does your share, tweet or status update constitute a financial promotion? Be very, very careful, you need to plan and strategise social media campaigns, although I would also warn not to ignore it. Embrace it, but be compliant.

    We recently announced to our specialist distributor panel that we intended running a series of social media courses accredited by the Chartered Institute of Marketing “CIM”, to support them in their growth plans. We have, yet again, been overwhelmed by the response to the invitation – talk about oversubscribed!

    The course content includes:

    • the role of social media, latest trends and stats

    • social media channel planning framework

    • best practice use of Facebook, Twitter and LinkedIn to grow your business

    • integration and measurement of digital campaigns.

    Once completed those who were quick enough to sign up to this invitation will have mastered the noble art of social media kung fu. They will become my first crusaders and join me as we embark on this heroic crusade…

    Here it comes…SPOILER ALERT.

    Crusaders unite, spread the word, something powerful is coming and it’s coming in my next blog… Oh hang on I’ve got an itch… (It’s like the ending to a TV series; I know, I know you’re a little disappointed, yet you want more). Whilst you wait for my next blog and as the da da dah da da der der der fades in to the background, why not keep an eye on @precise_mtgs …

    Join me next time, where all will be revealed!

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    Thinking Cleary: Protect pensioners from property clubs

    09 April 2015

    Some pensioners with a newfound pocketful of cash may make a big mistake and jump headlong into the buy-to-let market

    The pension reforms have arrived and no doubt this will be a significant improvement to the lives of many pensioners. But I have a concern that some pensioners with a newfound pocketful of cash may make a big mistake and jump headlong into the buy-to-let market.

    As someone heavily involved in the design and delivery of mortgage products, I always run the ‘Mum Test’ to ensure that our products will be good for consumers. The test involves me thinking about whether I would want my Mum, or any other close relative, to buy one of my products.

    This is how my latest Mum Test ran in my head:

    Mum: Hi Alan. Guess what?

    Me: What?

    Mum: I have just bought a house!

    Me: What did you do that for?

    Mum: I cashed in my pension and the bloke at the property club said I would get 6 per cent interest guaranteed.

    Me: This is a wind-up, right?

    Mum: No. It’s much better than putting your money in a bank account, isn’t it?

    Me: But you’ve never been a landlord before!

    Mum: I watched that programme on TV and it looks easy.

    Me: Dammnnnn!

    Mum: The property club was great. They made it sound so easy!

    You may think I am nuts but that is truly what ran through my head when I started to think about the unintended consequences of the reforms.

    Do not get me wrong – I think the reforms are a good thing. But it is up to us in the mortgage industry to ensure that pensioners do not become landlords without knowing about the pitfalls as well as the upsides.

    We all know about the type of people who are likely to prey upon nouveau riche pensioners, so let’s watch out for those dodgy property clubs that we saw operating during the boom – which convinced countless people that being a landlord was a road to riches – and report them to the FCA, if necessary.

    The FCA has powers to deal with property clubs and you can find further information on this in PERG 11.2. Lenders will no doubt remember that those so-called property clubs were a hotbed of mortgage fraud, which told naive people that they could get properties at a discount and that they would not have to put any cash into the deal. The sting in the tail was the fees they charged – and the horrendous losses that many unsuspecting new landlords got saddled with.

    Lenders and mortgage intermediaries can play a big part in protecting consumers. So between us we must make people aware that rental yields are not guaranteed, that voids do occur and that managing and maintaining a rental property involves time and effort as well as cost. And taking on a buy-to-let mortgage should not be undertaken lightly.

    Also, as soon as we see some D-list celebrity launch a programme about how easy it is to be a landlord and how you can make a fortune by buying a rundown property, sprucing it up in less than an hour and then letting it out for loadsamoney, we should all be very nervous.

    A poll carried out in 2011 by insurer Esurv showed how influential this type of programme can be. Almost a third of the 1,032 people polled stated that the rise of television property programmes – such as Grand Designs, The Home Show, Kirstie’s Homemade Home, Location Location Location and even MTV Cribs – had inspired them to put much more effort into maintaining the appearance of their home and influenced how they decorated it.

    The Government has stated that everyone who is eligible to take advantage of the new reforms will have access to free, impartial guidance. This will help consumers to make informed and confident choices on how they put their pension savings to best use.

    The guidance, called Pension Wise, is available through a number of different channels: via the internet, over the phone or face to face at a Citizens Advice Bureau. It is entirely impartial, and therefore not given by anyone who could be trying to sell a product.

    Of course, becoming a landlord will no doubt be a good option for some pensioners and, as long as they consult a regulated mortgage adviser, it could be a much better option than buying an annuity at today’s dismal rates.

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