December is supposed to be a quieter month for new business and sales activity. However, when I sit down for my Christmas turkey, I will look back on a particularly busy month where my colleagues and I have racked up a similarly high mileage to the rest of the year, as we have continued to take the second charge message to advisers across the UK.
Given how busy we are, I was surprised at the recent FLA figures showing a decline in second charge business in October, because in contrast our experience has been very positive since the Brexit vote and MCD. There was a short hiatus after Brexit and again as everyone absorbed the changes brought about by MCD. However, a combination of growing numbers of enquiries from brokers new to second charge and increasing demand from existing introducers, have been behind our successful last quarter and strong pipeline.
It will be interesting to see whether the FLA figures for November and December are better. The mood in the market among our peers appears to be optimistic and I am sure we are not the only intermediary facing master broker where their completion activity is far healthier then the overall results outlined by the FLA for October.
What is in a name?
I saw recently that a lender had commissioned some research which, having taken a representative poll of members of the public, had found that 79% did not know what a second charge loan was. On the face of it, it would seem to say that as an industry, we have a lot to do to educate and explain not only what a second charge loan is but what it can do and where it should be used.
While the regulator wants advisers to ensure that customers know about all the capital raising options, perhaps it is a sign that there is a way to go before second charge does get a decent shake when alternative borrowing strategies are concerned.
However, I have a simpler answer. If those same people who were polled were asked whether they knew what a secured loan was rather than second charge loan, I am sure many would have been able to answer yes. The regulator’s insistence that we should all adopt the name second charge to bring it into line with first charge mortgages was understandable. But it does take time for a new name to be accepted and understood and I for one will be back on the road in January to ensure that our introducers and their customers are aware of second charge and the advantages it can bring.
Jeff Davidson is head of intermediaries at Fluent for Advisers
