PODCAST: HIGHSTREET VERSUS MAINSTREAM

Part 1: Plenty of opportunity in the later life lending market

Speaking on the podcast, Deacon said that later life lending was a “key area of lending” for the business, and while market activity was more subdued last year, he was more optimistic about the year ahead.

“We are hopefully moving into a new era where interest rates are a bit more stable. There’s more confidence returning to the market. We had cost-of-living pressures throughout last year and, obviously, high interest rates and rates increasing month-on-month."

“However, the market has plenty of opportunity. Yes, there are challenges, but there are always elements to it that we can move along with. The market itself is a growing market, the demographic of people in that age group is growing”.

Part 2: Regulator and lender innovation needed around lending into retirement

Speaking on the podcast, Edward Payne, Director of Clifton Mortgages, said these clients had “very good payment profiles” but may struggle to get enough with a lifetime mortgage, and there are potential borrowing hurdles for retirement interest-only (RIO) mortgages such as sole survivor income. 

Moreover, he said that several lenders would go up to 75 or 80 years old, with Family Building Society going past 90 years old, but it did it in a “responsible way”.

“Family Building Society only do it for people who can actually show that they can afford the mortgage and they’re just slightly more creative in terms of the way they view that income and give the customers more credit,” he said.

PART 3: LOOKING AT INCOME AS PART OF CONSUMER DUTY

Speaking on the podcast, Edward Payne, Director of Clifton Mortgages, said that the sector “need to really start to think about foreseeable harm” as it was the “key thing when it comes to Consumer Duty”.

He explained that, since 2008, “affordability has been the watchword”, which has meant ensuring that the customer has sufficient income to cover the mortgage.

PART 4: SHOULD EVERYBODY USE A PACKAGER?

Michael Craig, Managing Director at Brilliant Solutions, called for more education from packagers, mortgage clubs and lenders, whether that is in the form of roadshows, case studies or testimonials.

Darren Deacon also commented, saying that packagers were “crucial” as they had “extra reach, they can reach additional firms”.

“I think a lot of the problem with some advisers is they’ll say, well, if I’ve got to go to a packager, my customer may think I don’t know what I’m doing. Well I would turn it on its head and say, no, you don’t know what you’re doing, you can reach out to that packager, who deals with us on a daily basis,” he noted.

Furthermore, he said that he would encourage every broker and adviser to “open the door to their Business Development Manager (BDM)”, adding that it was a “use them or lose them” situation. Deacon said that a good BDM is “so valuable in being able to put a case together”, especially in the later life lending market.