The importance of brokers getting to grips with regulatory guidelines concerning the second charge marketplace was confirmed by an industry panel at the Financial Services Expo (FSE) London.
In a debate on the impact of second-charge lending on the wider financial services marketplace, chaired by Front Events chairman John Malone, the panel was united in urging the intermediary market to be ready for regulatory challenges sooner rather than later.
Rob Jupp, chief executive of Brightstar Financial, said: “The rules are the rules, you can’t interpret them in any other way. They are the rules that the regulator sets out, we have to adhere to them and we have limited time to do so.
“I think the industry is in pretty good shape post-April 1st. There has been a cultural acceptance that this is not something we can fight. The fact is, whether you like it or not, regulation is here to stay and we’ve just got to deal with it and make the best of it.”
Alan Cleary, managing director of Precise Mortgages, commented: “It’s folly to think that you can actually wait until March 2016 when the rules become clear to change your actions and I direct that at brokers and lenders, so that’s just the fact of the market that we happen to sit in at the moment.”
Ray Boulger, senior technical manager at John Charcol, stated: “Good intermediaries will for some time have been considering second charge alongside a further advance alongside a remortgage, even though from a regulatory perspective that hasn’t been necessary. And I strongly recommend any broker who doesn’t already consider second charges when evaluating options for their clients to include it in their consideration. The message for intermediaries must be – don’t wait for the regulator to insist that you consider second charges, look at them now as a valid option.”
Maeve West, sales director, secured lending at Shawbrook Bank, added: “I think it’s fair to say that most intermediaries we deal with certainly haven’t put off facing regulatory change and they’ve started to make the necessary steps they feel they need to do between now and 2016 which is encouraging.
“There is a lot of onus put back on the lenders to help intermediaries understand what the changes will actually mean to them and their businesses. But I think from an intermediary perspective the biggest challenges they actually face is how they incorporate those changes into their business.”
The panel then went on to debate the value of the second-charge market moving forward with lending figures of £200m per month in mid to late 2015 branded as ambitious but not necessarily unattainable in light of impending interest rate rises and regulatory change. What all the panellists did agree on however, was the importance of second-charge loans to a functioning housing and mortgage market and that all intermediaries should be looking at seconds as a viable option moving forward.
