Retirement property defies house price slump

Retirement property is bucking the national trend, with sales climbing 3.8% during May, according to Retirement Homesearch. While the housing market has seen a significant downturn in recent months, with both Nationwide and Halifax reporting price falls of 2.4% in May, the retirement market has seen average prices rise by 3.7% in the same period.

According to Retirement Homesearch data, the price of the average retirement property was £139,597, compared with £134,442 in April. Since May 2007, prices have risen by 5.3% from £132,614.

David Gabriel, property sales manager at Retirement Homesearch, comments: “May was one of the best months we’ve experienced for almost a year in terms of the average price of properties sold, with demand for higher-end retirement property looking particularly healthy.”

Gabriel says there is growing demand for retirement property as the number of people whose children have become independent grows, causing many to consider downsizing.

He says demand is particularly high for properties that are easily maintained and safe, giving peace of mind to pensions who wish to travel in their retirement.

Egg suspends UK mortgage lending

Egg, the online banking brand owned by Citigroup, has pulled out of the UK mortgage market from today.

All new lending will be suspended until further notice owning to market conditions, according to Egg, but existing customers will be unaffected.

Egg represents less than 1% of the UK mortgage market as a whole, and specialised in offset and flexible mortgages.

Citigroup has already disbanded its Future Mortgages brand in the UK after the firm reported huge writedowns from the US sub-prime mortgage crisis.

The news will further limit the options available to borrowers, many of whom are struggling to purchase homes or refinance their properties.

Bradford & Bingley increases mortgage rates for new borrowers

Bradford & Bingley has increased its mortgage rates by up to 0.55%, for new borrowers, from today. On its standard range, its new two and three-year fixed rates have increased by 0.20%.

Its 10 year fixed rates have increased by 0.10%, and its new two-year and 10 year variable rate deals have increased by 0.10%

The bank says it is going to charge more for new mortgages because of the increased cost of raising funds in the financial markets.

All of its new fixed rate buy-to-let mortgages have increased by 0.55%, with its new variable rate mortgages shooting up by 0.45%

It revealed earlier in the week that arrears among some of its borrowers had shot up by 52% in the first four months of the year.

It has also been reported that Abbey is expected to raise some of its rates next week.

Norwich Union to make up to 1,800 UK staff redundant

Norwich Union is set to make around 1,800 redundancies over the next two years in a mass restructuring of the company.

NU says the company needs to be streamlined in terms of products, processes and services and that the changes will reflect the increased popularity of online insurance purchasing.

Operations in Basildon, Birmingham, Bristol, Cheadle, Dundee, Exeter, Glasgow, Ipswich, Leeds, Liverpool, Sheffield, Southampton and Worthing will be the trimmed with at least 1,500 staff being made redundant by the end of 2010.

Igal Mayer, chief executive of Norwich Union Insurance, says: “We are a very strong business that has grown over the years into a complex organisation. We want to deliver excellent, consistent and reliable customer service with market leading efficiency.

“To achieve this we will need to fundamentally simplify our business, consolidating our expertise into seven insurance centres of the future in the UK.”

He adds: “What we are announcing today represents significant operational change but I am convinced we are on the right course and that we have the best people working on delivering the right products and processes to service our customers and partners well.”

Almost half of firms claim to be unaffected by crunch

44% of financial services institutions said that it was business as usual and that the current economic climate has had no effect on their business, according to a survey conducted by Focus Solutions.

Consumers were also high on the list when discussing the main benefits of the Retail Distribution Review (RDR), 43% said that it would provide consumers with greater confidence in the advice sector with a simpler financial advice process and 33% believed it would provide higher standards and better qualified advisers to give advice.

Over a third of respondents found that the ability to adapt quickly and easily to future legislation was a key challenge for organisations operating in the new regulatory world, followed by finding the right technology solution, 18% and securing distribution, 18%.

Nearly half of all delegates believe that changing regulation has meant that technology has had to be smarter to allow for constant changes, 44% and that regulation has enforced the wider use of technology than would otherwise be the case – 26%. Technology is recognised now as an absolute must in order to retain and service clients in a more pro-active manner.

The survey was carried out at the focus:360° launch event on Tuesday 20 May at One Wimpole Street, London and focussed on the effects of the changing financial services distribution landscape in the new regulatory ‘world’, future advice models, how they will evolve post the RDR and how technology solutions need to be able to continuously adapt inline with regulatory and market changes.

Richard Stevenson, chief executive, Focus Solutions, said: “It was clear from the event and subsequent feedback, organisations have a number of key challenges to overcome when operating in this changing regulatory world and this launch event for focus:360° has shown delegates that there are solutions that can cope well with these ever increasing demands. We have combined our software assets, consultancy experience and delivery expertise together to bring a unique offering to the market in focus:360° and we look forward to announcing new contracts in the near future across the provider and distributor space.”

AFB open for nominations to board

Nominations have opened today for the election of three positions to the Board of the Association of Finance Brokers (AFB).

The positions are split between small, medium, and large firms. All Board positions are re-elected on at least a three year rolling cycle. Existing Board members, Paul Carley (small firms) and Steve Feeney (medium firms) are both standing for re-election.

Robert Sinclair, director of the AFB, said: “We are an open and transparent body, which is fully representative of its members and their interests, and we welcome all nominations to the Board.

“These are challenging times for the industry and the wider economy and it is more important than ever that the industry has a strong trade body representing its interests with regulators, politicians and the media. However, we are only as strong as our members make us. That is why it is vital we have engaged members who are willing to serve on the Board. The secured loans industry faces a number of key challenges this year and sitting on the AFB Board offers a great opportunity to influence the future shape of our industry.”

The timetable for the election is as follows:

Nominations Open – 6 June 2008
Nominations Close – 9 July 2008
Election Opens – 21 July 2008
Election Closes – 6 August 2008
Results announced – 8 August 2008

To stand for election, full AFB individuals must complete a nomination form and be nominated by two members from the same constituency, one of which can be from their own firm. To request a nomination form e-mail Rebecca Goddard at Rebecca@theafb.net

Deal means Lloyds TSB can ‘cherry pick’ NRock borrowers

Only a select few borrowers stand to benefit from the mortgage partnership deal struck between Lloyds TSB and Northern Rock, industry experts argue. The agreement between the two banks, announced yesterday, will allow only fixed-rate Northern Rock customers to switch to a Lloyds TSB mortgage once they have come to the end of their deal.

The agreement has been welcomed by those who say Rock’s borrowers will now have more options once they come to remortgage.

But Louise Cuming, head of mortgages at Moneysupermarket, says that Lloyds TSB will “undoubtedly cherry pick” Northern Rock borrowers, leaving many out in the cold.

“This may be good news for some Northern Rock borrowers, but the Lloyds TSB deal will only be offered to a select tier of customers,” she says.

“Lloyds TSB will undoubtedly cherry pick Northern Rock’s prime borrowers and anyone who doesn’t make the grade will find themselves part of a growing borrowing underclass.

“These people will face an uphill struggle to find an affordable mortgage when their fixed rate deal comes to an end.”

Darren Cook, spokesperson for Moneyfacts, says Northern Rock borrowers who have not yet sufficiently lowered their LTV will still be facing the lender’s SVR.

He says: “Current products from Lloyds TSB are only available for loans up to 90% loan-to-value.

“We are concerned how Northern Rock plans to deal with those of its customers with loan-to-values higher than this, some as high as 125%.”

This article was first published by IFAonline, part of the Incisive Media group.

Mortgage Next adds Blemain and Cheshire to packager panel

Mortgage Next has added Blemain Finance and The Cheshire Mortgage Corporation to packager panel of lenders.

Blemain Finance is providing a range of specialist buy to let mortgage products which are available for any status, including CCJs and discharged bankrupts, as well as any income source whether employed, self-employed, or pensions. The products will also cater for a wide range of property types.

Cheshire Mortgage Corporation is making available a full range of all status mortgage products including self-cert, DSS income and sub-prime mortgages. Micro Mortgages are available from £3,000 to £25,000 and Universal Mortgages up to £500,000 for all property types including shared ownership and non-standard construction properties. Both lenders will be available to ARs of the Mortgage Next Network and directly authorised brokers using Mortgage Next Partners.

Lisa Barber, sales and marketing director at Mortgage Next, said: “It’s great to be adding lenders to our packager panel who offer specific plans for most circumstances in the non-conforming market, including right to buy and shared ownership. Our members have struggled to find lenders who will consider special cases in the current climate and these two additions to our packaged panel will be warmly welcomed. We look forward to working with both Blemain Finance and Cheshire Mortgage Corporation over the coming months.”

Gary Bailey Director of the Blemain Group said: “We’re delighted to be working with Mortgage Next and guarantee that their members will not only have access to a range of competitive and accommodating products, but will also receive a fast and efficient service. In such a tough mortgage market, I have no doubt we will be able to enhance the service proposition offered by Mortgage Next to their members.”

Exclusive Connections uses insurance to guarantee proc fees

Exclusive Connections has launched a new scheme that guarantees procuration fee payments to its introducers.

The new scheme, which is funded by Exclusive Connections, has put insurance in place to ensure the broker is paid the fees due to them from the lender on completed business even if the packager handling the case or the lender involved goes out of business and are unable to honour their commitment.

Matthew Arena, managing director of Exclusive Connections, “Although Exclusive Connections has always ensured that broker procuration fees are kept separate, we felt it was important to look at transparent guarantees for members and their introducers to give them the confidence to know that when they deal with Exclusive Connections not only do they get access to the best products and service through our locally based members, but with this independent cover they have complete peace of mind with a cast iron guarantee that all fee payments will be honoured regardless.”

The policy cover is being provided by specialist insurer, Composite Title.

Paul Beresford, director of Composite Title, said “The market is obviously suffering from uncertainty with concerns about how long the current downturn will last and how it will affect trading conditions. We believe our policy can give some comfort to those who are working very hard to continue in business and the last thing they need is to be worried about the payments which are the lifeblood of their business.”

The insurance cover is available to all brokers who transact business through the packager network managed by Exclusive Connections.

Clarion rebrands Expo

Clarion Events, the organisers of the Mortgage Business Expo trade exhibitions, is fully rebranding the show.

The exhibition will now be known as MBE with Clarion also introducing a new logo to accompany the next London event in November.

The new logo incorporates a much more prominent position for MBE with references to Mortgage Business Expo retained for 2008 only.

To coincide with the rebranding, Clarion have also announced the launch of a number of sub-brands, which include: MBE Residential Mortgages; MBE Commercial Property Finance, MBE Equity Release; MBE General Insurance; MBE Debt Management; MBE Secured Lending and MBE International Property Investment.

Daniel Nwaokolo, MBE London show director, said: “The MBE exhibitors, which currently take place in London, Belfast, Glasgow and Manchester, will continue to be focused on the intermediary market and the needs of this highly important distribution channel.

“This year, more than any other, MBE London will be concentrating on the greater need for business diversification and the income opportunities available in the various complimentary and substitute product sectors. This is why we have introduced the MBE sub-brands.

“The new MBE London website will be launched on the 4th June 2008 and we would like to invite all delegates and exhibitors to use this resource to get the most out of their MBE experience when the show opens at Earl’s Court on the 12th and 13th of November.”