In part two of our year in review we continue our look at some of the biggest moments over the past 12 months.
School may have been out for summer but the FCA was adamant that AR brokers still had a lot to learn about giving advice when it published the findings of its thematic review in July. The regulator warned that advisers in many of the UK’s largest networks were giving “inconsistent” advice to clients without being able to justify why they have recommended a product.
The paper, Embedding the Mortgage Market Review: Advice and Distribution, said: “Appointed representatives of many large retail intermediary networks are delivering advice with little or no structure”.
And there was further news from the regulator when chief executive Martin Wheatley announced he was to step down with effect from 12 September 2015.
The regulator said Tracey McDermott would be taking over as acting chief executive from 12 September while the search for a permanent chief executive takes place and Wheatley would continue to act as an adviser to the FCA board until 31 January 2016.
Meanwhile Precise Mortgages unveiled its second charge buy-to-let mortgage range with rates starting from 5.95% for prime deals.
Pull out quote
“It had been all too easy for brokers to misinterpret the guidelines on advice processes. This [FCA] report plainly stated exactly how the regulator expects brokers to offer advice, removing any risk for confusion. It also came as great comfort and reassurance to those companies in the second charge sector, like ourselves, that have been busy putting plans in place for the post MCD-world. For those companies that perhaps were still unsure it gave the chance to make the necessary changes now in order to be ready for the new regime.” Steve Walker, managing director, Promise Solutions
As August began figures from the Finance and Leasing Association revealed second charge mortgage lending increased by 26% in the 12 months to June 2015 year-on-year.
The FLA recorded £666m of second charge lending annually, £181m in the three months to June and £63m just in June.
Packager Positive Lending announced it has appointed Anna Bennett, former marketing director with development finance lender BLG, InterBay Commercial and marketing manager with GMAC-RFC, as its marketing director.
Research from Altfi Data was released revealing lending through alternative finance platforms hit a new record in July with £252.3m of new loans originated – up £32m from the previous month. The top three platforms by origination volume were Zopa (£52.2m) Funding Circle (£47.5m) and RateSettter (£43.5m).
And Enterprise Finance received Financial Conduct Authority approval to advise on regulated mortgage contracts, including second charge mortgages and bridging.
Pull out quote
“Receiving confirmation of our variation of permissions from the Financial Conduct Authority at the end of August was another high point, especially given we were one of the first master brokers to be notified. We’ve been preparing for the new regulatory regime for some time now, but receiving approval so far in advance of the deadline seal of approval was official endorsement that we are ahead of the curve.” Harry Landy, sales director Enterprise Finance
September saw TFC Homeloans announce a partnership with national brokerage Mortgageforce to enable its members to access specialist funding solutions.
Speaking at the time Nigel Payne, TFC managing director, said: “It’s fantastic to be recognised as a preferred specialist distributor for Mortgageforce because I consider the organisation to be one of the best in the business.”
There was concern from the regulator that some consumer credit broking firms were still lacking understanding of new regulation.
Speaking at the FCA mortgage conference Linda Woodall, acting director of supervision, retail and authorisations at the regulator, said educating brokers unused to FCA regulation was still “a work in progress” and admitted she had concerns that too many brokers still didn’t understand what was required of them.
She said: “The key thing in both the mortgage and consumer credit markets is an understanding of affordability.”
Meanwhile Specialist Financial Services – which offers second charge mortgages, specialist commercial mortgages and bridging finance – was granted full FCA consumer credit permissions.
In October Shawbrook Bank announced it had entered the regulated bridging market with loans starting from 0.69% to 70% loan-to-value.
The two products, called RB1 and RB2, are designed for clients wanting to downsize and/or to avoid chain breaks, where for example the customer wants to proceed with a purchase even if the buyer of their property has withdrawn.
Figures from the FLA revealed second charge mortgage lending grew by 31% in August compared with the same month in 2014.
Masthaven Finance unveiled plans to become a new UK retail bank offering online, fixed interest savings and specialist mortgages.
The planned bank has already met the strict UK regulatory capital rules and is preparing to launch in the summer of 2016 with former Saffron chief executive Jon Hall as managing director.
And Brightstar launched a new division to deal with the growing demand for development finance. The development finance division will be headed up jointly by Rob Collins and Kit Thompson.
As November began Dragonfly Property Finance announced plans to rebrand as Octopus Property in the New Year in order to move its brand in line with parent firm Octopus group.
“We have always been part of Octopus and the rebrand cements this relationship with the broader Octopus group,” says Mark Posniak, managing director of Dragonfly Property Finance. “We firmly believe that the strength of the Octopus brand will put us in an even stronger market position helping us to accelerate our growth in the years ahead. We have big plans for the future and while the Dragonfly brand is strong, we feel we will be able to achieve them much sooner by being part of Octopus Property.”
Tryloans became the latest lender to receive full permission from the Financial Conduct Authority to conduct regulated business with managing director Martin Swann calling the announcement “testament to the hard work of the whole management team”.
And Finance 4 Business managing director Russell Martin was confirmed as the new chairman of the Association of Bridging Professionals, taking over from Brightstar CEO Rob Jupp who has been heading the association since August 2013.
As Mortgage Introducer went to press the second charge sector was preparing for the Christmas wind down ahead of what is expected to be one of the most significant years in the industry’s history.
With the March 21st deadline looming the New Year is sure get off to a busy start as brokers and lenders get their houses in order for MCD regulation.
If you thought 2015 was interesting, you haven’t seen nothing yet!