Mortgage Broker Broadcast
Developing your knowledge to help you build a successful Mortgage Broker business. Craig Skelton shares his thoughts and experiences on all aspects of mortgage advice covering everything from operating in the banking world, estate agency based advisers all the way up to working as a self employed broker. He will be joined by experts from within the industry and other business sectors which all play a key part in becoming a successful mortgage broker in the modern world.
Mortgage Broker Broadcast
Dissecting the Broker's Role in Today's Economic Climate
When the chatter of an impending recession hits your ear, it's tough not to listen. But what's the real score on the state of the market in the new year? Dave Coleman from Positive Lending joins us once more, bringing a wealth of knowledge to dissect the economic landscape. With inflation stubbornly persistent, we get real about the market's current vibe and the critical importance of solid business relationships. Ever faced a day where nothing but a coffee could see you through? Imagine those stakes but in the world of finance brokerage—yes, we're talking about those personal stories, too, alongside the surprisingly lively buzz in our business sector despite economic headwinds.
The art of finance brokerage isn't just about securing clients—it's about being the linchpin in a world where conventional lending just doesn't cut it. This episode peels back the layers on bridging, second charge, and commercial lending, and why brokers need to stay on their toes as the industry landscape shifts beneath them. New lenders, fluctuating rates—it's a whirlwind out there, and we're here to talk strategies for keeping our clients afloat and financially sound. Join us as we dissect the roles and challenges brokers face and the innovative solutions they bring to the table.
Building a lasting clientele is akin to crafting a fine wine—it gets better with time. We're exploring the proactive steps necessary for cultivating relationships that extend beyond mere transactions. As we touch on the importance of engaging genuinely with clients, we're not just talking shop; we're talking about creating a hub of trust and dependable advice. And stay tuned as we give you a sneak peek of future episodes featuring the sharp insights of Haley Skinner and the entrepreneurial spirit of self-employed broker Marty Nan. Prepare for a conversation that goes beyond the numbers and into the heart of what makes the finance world tick.
The Mortgage Broker Broadcast on
YouTube https://www.youtube.com/playlist?list=PLxXEaYQYmRFg4as3o6uafzq6WP3-omp4N
Apple https://podcasts.apple.com/gb/podcast/mortgage-broker-broadcast/id1560964722
Spotify https://open.spotify.com/show/3xmMdDcgmYh4A74wxeXnCV?si=cbc8f8b024fc4c98
Looking for one to one mentoring, visit my website to see how it works craigskelton.co.uk
#mortgagebroker #mortgagebrokers #mortgagebrokeruk #mortgagebrokercoaching #coaching #mortgagebrokerage #mortgagebrokerbusiness #mortgagebrokermarketing ...
Hi and welcome to this week's Morgans Broker Broadcast. I guess this week is Dave Coleman from Positive Lending, and there's been regularly now on the podcast. This will be the third time he's been on the podcast. Seems to be a regular annual spot with Dave. We're going to get Dave back on the podcast just to sort of talk about Positive Lending, how he's sort of seen the market so far this year after sort of seven, eight weeks into the year and yeah, just really how he's sort of finding the whole space and again, how he's educating brokers and yeah, he's sort of good to getting back on to the podcast. Have a chat about that. Before we do that, though, as always, we've got our regular spot with Lee and his Morgans Broker Bulletin, so first of all, over to Lee, thank you, craig, and welcome to the fourth edition of the Morgans Broker Bulletin.
Speaker 2:If you told me two years ago I'd be doing a bullet then on Craig's podcast, with David Coleman on there, I wouldn't have believed you. So it's a great honor to be on here. We're in a recession, apparently, so not great news and inflation has stayed the same at 4%. Well, I had a few unfinished things to talk about with regards to relationships last week. Now what happens if the relationship is one sided or we don't fulfill what we're gonna say?
Speaker 2:Now I look at time as money, but I also look as energy as money as well, and the last thing we wanna do is use a load of energy up which we don't need to. So if we don't fulfill our side of these relationships and the relationships go sour, what happens? We personally have stress. You give stress to the other side of the relationship. If you don't treat that person well with regards to business, word gets around that you're not a great person to deal with, and there's only so many times you can go back to the well to ask people to work with you. So be careful and be honest when you're fulfilling your relationship obligations, because the last thing you want is that to affect your reputation and your business reputation going forward. So make sure everything is clear from the outset. Have a great week Onwards, upwards and forwards, and I'll speak to you soon.
Speaker 1:Thanks very much for that, lee. Thanks very much for the input and, as always, your time and effort with the Morgie's Broke Bulletin. And, like I say, we've got Dave Coleman on the podcast this week, regular guest coming back, so let's just get Dave onto the podcast. So welcome back onto the podcast, david how are you?
Speaker 3:I'm good. Thank you, mate, I'm good. I'm tired, but that comes from having two kids around about two years and younger, but I'm very well. Thank you, mate, I'm very well. Yeah, everyone's good house full of sickness since the new year, but we're getting through it. But yeah, life is all good, business is good, everything's okay in the grand scheme of things.
Speaker 1:Good, good. Like I said, I'm expecting some sort of sponsored brand coffee top on or something like that for the podcast in terms of I'm waiting for it to come through, mate, I need it, I need it.
Speaker 1:I think you could just start promoting on your post about the brand of coffee and then, yeah, who's sort of the coffee choice? Funny enough, I've been having a detailed chat with Martin Nan, who I advise that work with, and we've been having a detailed chat about coffee this morning, full enough because he's not drinking anymore, I still am, and we've got bean to cut machines going on and we had a bit of a conversation around that. So, yeah, my second conversation of the day about coffee. It's a good topic. Exactly, it shows where we're at at the minute. So, but when we're all right, the children are all right. That's the main thing. They're like sort of just the joys of bugs and things like that going around.
Speaker 3:Exactly right, mate. Yeah, inevitably that's what you pay loads of money to nursery for Get by and viruses and sickness you know I don't think that's going to change anytime soon, to be fair, mate, so it's definitely not.
Speaker 1:Thanks for agreeing. To come back onto podcasts, it is, I was just looking there. It's a regular thing. Now this thing is an annual event. I see it twice a year, I think it's on the podcast and then on the open-works update.
Speaker 3:yeah, on the go-go, exactly yeah, mate thanks for having us back on. It's very much appreciated. It's always good to catch up with you as well. Yeah, I always enjoy our chats.
Speaker 1:I think that's. We had a bit of a chat before about is it okay with the no agenda approach and just let's see where it goes. And, yeah, you trust me with that, which is the main thing, so yeah, so, like I said, it was April last year. We had a chat about various things, but thanks for agreeing to come back on. I just think it's good, like, where we're at. We're sort of seven, eight weeks into the year already and I think it's just good to understand where you're at, like as a business and what you take on is the market point of view. We've hit the news. We were recording this a week before it was released, so we're officially are we officially into a recession now, technically a recession or not?
Speaker 3:kind, of thing. Who knows, who knows.
Speaker 1:Yeah, I think we like the recession. I don't know about how, about you, but we'll talk about that. From a business point of view, certainly doesn't feel like a recession right now.
Speaker 3:No, I mean the year has started. I mean there's definitely feels like there's a lot more activity in the market and that's how the year has started, which is great. I think we had a pretty strong January. Business-wise, completion-wise inquiries are coming in thick and fast. My team has never been busier out actually visiting brokers, and brokers are knocking the door going. We need to know about this. Can you come and talk to us about this? We're now finding more problematic bits and stuff like that. So I think previously, when the market was easier and it hasn't been easy for a while, but there's more demographic of clients that are coming through and there is no such thing as a straightforward application nowadays is there, but now it's getting even more complex and complicated and what we're seeing is that whilst the high street are able to facilitate a good amount of clients, there's a good amount they aren't able to help and once it falls outside of that criteria, then it's calling on a more specialist's need.
Speaker 1:Definitely. I think since we last spoke, your team's changed a bit. We'll get into a bit more, go back into the market a bit, but your team has changed a bit. You've got a few more people working with you now.
Speaker 3:Yeah, we've got two newbies in the team, although they might be new very soon. So Sophie started in January. She's covering the Midlands and she comes from a lender background. So yeah, she's that and she's hit the ground running. She's getting herself well embedded with everything she's doing. And we've got Graham, who covers another patch, and he's one in bed as well. He's in the thick of it as well. So, yeah, they're out and about doing what we do, delivering the message of specialist lending under the umbrella of positive lending. But yeah, we're busy. I mean, the diaries are busy.
Speaker 3:As I say, we're probably averaging what three to four appointments a day with brokers, and the value of that is you could be going to see a broker who works in their shed and you're going to see another broker who's got 30 advisors working at the firm.
Speaker 3:But inevitably and I always feel like I sound a little bit bigheaded when I say this, but inevitably when we walk out of those meetings, we walk out with business because it's recognizing the opportunity and going. I didn't know you could do that and then the brokers going down to the bottom of their drawer, going. I've been putting this one off for the last three months. You can actually help me with it, get it off my desk, get it away from me, but help the client at the same time. So we're seeing a lot more of that stuff come through and I think, with the very nature of what's been going on the market and everyone struggling in one way or another financially, we'll undoubtedly see more specialist lending coming into play to support clients where you're more traditional lenders and means aren't able to do so. No, definitely.
Speaker 1:And it goes back to the thing that I've always believed in, that the relationship. When you've talked about your team going out there and walking away with business, I think that is sort of like a key to any successful mortgage broker businesses having that relationship with the business development managers that don't see it as a a chore. You've got to welcome these people with open arms and I see brokers that will kick down the road or cancel at the last minute the meetings with the BDMs, thinking I've got this on my desk, I want to get this off. But it's getting that balance right where it is important that having those relationships because you never know when you're going to be calling on that kind of person. So I said you know what I've got.
Speaker 1:This scenario is it something you do? And I think you just like say you it's all about your brand awareness. That's absolutely. It is your. That's the thing. What you want to know is your brand in terms of positive, that you want to be out there in the marketplace and that's the only way that you're going to do that is hard for fall.
Speaker 3:I'm guessing yeah, it's knocking on doors. I mean, it's probably been and is. Our biggest USP as a business is we will go out and support brokers, ifa's, intermediaries across the country. If the opportunity is there, we will be there as long as the kettle's down and then we've got a place and we'll come and see them. But I think and the value of it is really is we never really go out and sell positive as a business.
Speaker 3:We go out and sell the opportunity in the market about the products where they sit within that broker or that firms, client, bank and what they might be seeing, what might be coming up, help with them, recognize what the opportunities are, but also allowing them to get access to lenders they can't access directly or support them with inquiries or clients that they maybe not be able to do directly or maybe they don't have the appetite to do directly, and it allows them to get that off their desk into the hands of us. So we're supporting that client in the background and they can crack them with their bread and butter business. So it's a win-win all around really, and once that kind of message is delivered, then it just goes hand in hand. And, as I say that we typically. It's very unusual for us to walk out of a firm, of whatever size, and with nothing in our hands. Someone's always got something that they want to discuss and we can look at for them.
Speaker 1:That is always the case and, like you see, you've always got that bottom drug, the one that you keep pushing down the road, kicking down the road, that kind of client thinking, and they keep ringing your bath. But we've probably talked about before. It's about building your brand, it's about building your client base and I think once you've got that, you've gone to that end degree for that client and you've sort of found that solution from where the other brokers have just cannot be bothered to deal with that or even do the fact finder even talk about it. They've not gone to end degree for that client. Once you do do that, it's just then build such a big, such a loyalty from that client point of view, because they're not going to be they may be specialists for life, but they may not be specialists. But the guarantee thing is they will need a broker and they will come back to you because you helped them at their time of need, when maybe they've had a no from one, two, three others, because there's big blunders, they just can't be arsed dealing with the complexity of it. But because you can be bothered and because you are prepared to put a bit more working hours into it and a bit more determination to get a solution then and the persistency with it.
Speaker 1:And again that breeds you're going to get, if you are not, that you want that. I mean maybe you want that as your core business, maybe you have got, I don't know. I've not seen many brokers that are that's all they want all the time, because we do want those vanilla cases to mix up a little bit. But certainly from a client point of view, if you've helped that client and then they know that something else in that situation they're going to. And again it also helps it. Like if you're keen on social media, if you've got, so you're helping giving out these stories and how you've helped clients in these scenarios will just help with your branding, help with the SEO content if you're putting a blog out there or doing something like that. So everybody wins, like you say.
Speaker 3:Yeah, well, and also look the message. I see brokers all the time and a common response is I just don't get this client bank. I was like, well, you probably do, but you're on us picking it up and you have a broker down the road is picking up your business. Do you really want that to happen? So, if you do, okay, great, all right. Well, thanks for your time. I'll see you later. But you don't. You want the business, don't you?
Speaker 3:Every broker wants the business, and a lot of the time, as much as there's definitely more adverse creeping into the market and that kind of client bank, sadly so. It's the sad reason to be doing business. But actually a lot of the stuff we deal with it isn't adverse or a stinky deal, it's actually vanilla. But it's where a traditional lender isn't possible or doesn't provide the best outcome, and that's where we come into play. No one's ever really gonna pick up their broker and go I'd love a second charge mortgage, please. They pick up the phone and go I need 50 grand, how do I get it? Make it happen, that's it.
Speaker 3:And then the broker's job is to provide that solution, get an outcome for the client, and then you know if they can't do that via the traditional options available to them. That's when they pick up the phone to me or my team and say, right, I've got something for you, can we have a look at this? Or my client wants to do their own development, they wanna go to auction, they've got this, or whatever it may be. And then we can look at it and, to your point, you know you're gonna have clients that maybe are gonna be in the specialist banner for the remainder of their term in finance, but actually a lot of those won't be. They'll come out of it and they need a solution now to help them transact or continue what they're doing, with a view that you know whenever the time is right and appropriate. Well, actually, you're more mainstream and traditional and we'll open the door to them again because whatever they've got is gonna be historic enough and that broker's gonna be able to better their situation going forward.
Speaker 1:Definitely. And so we, I've just realized then, we've gone straight into the podcast. We've done no introductions, no, nothing. Literally we've gone full straight. We're already sort of 10 minutes in and we've just gone straight in there. But we'll pop a bit too late to the introductions now. But you're absolutely right. Are you finding that with the start of the year, like I said, we are sort of seven, eight weeks into it, and, from a broker point of view, are you finding typical stuff? Are you finding you're doing a variety of stuff? Is there any sort of a lot? Are you doing a lot of this or a lot of that, or is it just quite varied at the moment?
Speaker 3:It's a real mixed bag. So I think overall first charge mortgages were down last year, which I think would probably relate to the mainstream world as well. On first charge, we've definitely seen an increase in activity in the first charge desk as going into this year. And again it is that quirkiest stuff. It's the limited company purchase, spv or adverse quirky income structure, unusual property types, all that kind of stuff. But the busiest parts really at the moment I would say, well, there's cross-free parts. Bridging, I'd probably say, is the busiest part of the business, followed very closely by second charge and commercial.
Speaker 3:There is a lot of commercial activity happening at the moment. I think your investor, land lord, is now maybe exploring outside of the traditional buy to let and actually looking at commercial property to invest in. Or if they're a business owner, we're seeing that actually their cost running the business is going up. Their rental, their lease, is going up in cost as well. So they're now looking at the possibility of acquiring a property and owning it because it actually makes sense for them to do so financially. So there's definitely more activity in that.
Speaker 3:The second charge well, there's nothing really that innovative that's changed within it, although we do have a couple of new lenders coming to market this year, but it's the relevance of the product, it's the stronger affordability, the loan purpose that might not be deemed suitable elsewhere, the LTV restrictions that might be put onto a further advance or further borrowing. And if your clients got a 1% rate or whatever, a 2% rate those rates that are sadly no longer around anymore well, they're gonna wanna probably safeguard that for as long as possible. So they're gonna take the capital raise on a second, on the smaller amount, rather than refinancing the larger loan size at a higher rate.
Speaker 1:And it is just having that no-transcript. A broker is open to that and understand how second charges work. You find, when you were out there and your team out there, in terms of educating brokers from what positive offer is it explaining to them? Because if you look at my sort of thought on it is that, have we got a lot of. There's a lot of brokers that have left the industry when things have been challenging and tough and replacing cases three and four times over. I know there is less brokers in the marketplace this year than what they were last year. However, there's still a lot of new brokers that are coming into the industry totally green, totally lean and theme at one in hand and not are you finding that they just don't get? That is a lot of education from your point of view with your team and when you face to face understanding what second charge mortgages are, what, not just talking about you as a proposition and what you offer is there a lot of people from a broker point of view as well.
Speaker 3:Absolutely mate. I think as a product, the amount of brokers that go secured loans, well, it is still secured loan, but secured loan was going back in the day. It was unregulated, the fees were high, the rates were high. It was a completely different market back then. But I think, much like bridging as well, I think there's still such a big stigma around those products second charge and bridging because of historical transactions, misuse of products etc.
Speaker 3:But, like I said, it's unusual that a client would phone up to their financial advisor broker and go I really want a second charge. They go I need this money. How do I make it happen? And the broker's job there is to ascertain what. Can I get them? A further advance? Can we look at remortgages or another lender on the market that would be best suited for them? There is, but actually you're going to pay an ERC on their first charge, so that's going to cost them extra amount of money. Is that the right thing to do? They want to borrow 50 grand but actually on a further advance, right now they can only get 20 because the LTV's being capped or it doesn't fit on affordability or they've got high debt. It's just not going to work. The lender's not going to be happy with it or they won't allow them to do that the full debt con they want to do. So it's understanding.
Speaker 3:Like you said, it's not really about us pushing positive lending and we don't do that. We don't go out and positive this positive that it's about. These products need to be in your toolbox when you're talking to your client. And if you can do it further advance, great. That's the right thing for the client. And if a remortgage doesn't come with additional costs or isn't going to be detrimental to the client's outcome, great, that's the right thing to do. And if the first charge lender will do the loan purpose or whatever you're looking to for the client, great, that is the right thing to do. But if it doesn't, don't turn your client away. Have a conversation because actually we might be able to achieve what they want in the here and now.
Speaker 3:And actually I mean last year the flavor was the typically the. It would be a PT on the first charge, which probably preferred rate at the time, immediately raised by the way of a second charge to do whatever the client wanted to do. Number one reason probably was debt consolidation with a few that further down the line when the time is right or appropriate. Well, that broker would refinance that second charge into a first charge mortgage again. So brokers are looking to go well, I get the PT now. Yes, it pays me less, but it's part of the transaction. I'm going to do a second charge that gets the client exactly what they want to do right now and it also generates revenue for me. And actually there's a future refinance opportunity, a revenue opportunity in the future, which then typically betters the client as well. So you know, a second charge rate is always going to be higher than a first charge mainstream rate, but when you're looking at refinancing it further down the line, you're going to achieve a more mainstream rate again. So you've got that client retention, ongoing business reason to pick up the phone and speak to your client, and I think more brokers are sort of cottoning onto that and engaging with that.
Speaker 3:And we've seen some brokers actually contacting their clients, potentially at 12 months ahead of their product review, to go what's your current financial situation? How much debt have you got? Can we have a review on that? Because if this is outstanding, when it's time to remortgage you, we might be in a bit of a bother. We don't know if we can do it. So they're actually preempting the game and going look, if we tidy up your debt now, get rid of your toxic debt, and when it's time is ready, actually I'm going to be in a much stronger position to get you a better offering with a first charge mortgage. And they're engaging in conversations ahead of time now.
Speaker 1:Which is far better. That's better for everybody. And concerning like, from a broker point of view, client retention is key and, like with this podcast, is aimed at self employed mortgage brokers. That are, they're the people that listen to this podcast and comments that generally are the self employed. So retention for a self employed mortgage broker is key. And if you are going to, you're looking at I think realization is now is that brokers tend to be working smarter with the clients. They're not looking at generating more and generating more and generating more. They understand that it's working smarter with their clients.
Speaker 1:Going to that end degree, not only now, I'm seeing so much better retention from a client point of view, communication with the clients. Well then, going back, you're on a five year fix and I'll speak to you in four and a half years time. There is that ongoing communication connecting with them on social media, the posting on social media or the email campaigns, I think as well with regards to that, and so, like looking at, looking at what you're talking about there, it just gives you a broker. So, as we'll say to me, I just don't want to ask that. I don't know what to speak a year into the moving in. What do I talk about Is that?
Speaker 1:Well, there's a million and one things you can talk about to a client that's moved in. 12 months ago, about the school, I said, the debt, or how they've finding things that they moved in. Are they enjoying doing what they're doing? Are they all? Because you've spent so much time with that client at a stressful time, you've got to know so much detail about them.
Speaker 1:Well, what's the worst can happen? You pick up the phone 12 months later to see how they're getting on and they say to you know what? Yeah, we've had to take out, we've got some with, we are struggling, or what we've had, we've wanted to do this, or we've done that, or we want to do, we want to improve the garden, or we want to have an extension, like that. And knowing, like you said, the rates are so precious in terms of the ones and two cents and the better, the better ones you want to protect that. Well, you can be that now and shine night on in China. I'm saying I've got a solution for you and let's, let's protect that mainstream aspect of it, but let's look at how we can help you with this, which is a massive thing.
Speaker 3:Yeah, massive. I think every broker in the land you know, whether you're new to market or you've been in the market for longer. Your client bank you want to build that we're actually effectively you end up with being a friends and family and a recommendation business, because that's your gold right. They're clients for life. And I think, looking at clients, having them conversations and I have these conversations with brokers that we go and visit as I look some of the conversations won't even land with me, won't land with us off the back of it, because your phone, your client and you'll have a conversation.
Speaker 3:It might be that they need a will, that they need more protection, they're going for a divorce, there's been a health issue All of those things that you wouldn't know unless you're picking up the phone. Have a conversation. That might lead into something we can help with. It might lead into something else you can help them with as a different part of your business. But the fact is the conversation happening allows you know that to flow, because I think, as a consumer, if you've got a high level of debt or you've got debt, you're struggling with your struggling financially. There's probably still a bit of a stigma about that, about being open about it and talking about it. If you're prompted by the person you trust in to sort out your mortgage and keep a roof over your head, well then you can have that discussion and that that leads into the opportunity of how that can be helped and what we can do to better your situation in the here and now.
Speaker 1:And that's the thing like what better way to be? Like you said, you've got to be more proactive about that than reactive in a bad situation. If you're not speaking to them for the next four and a half years, if it's on a five year deal, if you are then proactive and picking up that, call people with phone, making that call, you've just cementing what you, that that trust that you had with them 12 months ago, whenever the case may be. So it's good. But it's a really good sort of thing to think about from a broker's point of view, about how you are genuinely returning your clients. And it's good to get your perspective on it, because you're not just looking at it from a business or a positive point of view, as in the bright, positive lending.
Speaker 1:You're talking about it from a whole experience, from a broker's point of view, because they say, if you've got 300 clients as a broker, you've and you're doing everything you possibly can and you've got you, you're doing the referrals and all the things and you're looking after those clients. You don't really need many more clients than that if you're doing everything you're doing with those clients. So that's a great place to be not thinking, oh, where's my next leave going to come from. I need to get on to and buying these, because that's one thing that I'm saying, particularly over the last three or four months and certainly the start of the year, is that we've got less people buying leads now than we've ever had before, because you're just seeing that it's not a good investment. It's not a good return on investment on that point of view. So why have you done that?
Speaker 3:Yeah, I mean there was a few firms that I was in last year speaking to and they were buying leads and the lead could be brilliant, it could be a great client, but you can't change what's going on the market with criteria. So the client could be keen as mustard but if the lender isn't able to provide the parameters for that client to borrow, transact, purchase, whatever it may be, that lead is dead and you're spending good premium money on that lead. So actually there's a good amount of firms that I was seeing last year and they were like business is quieter, things are slower, we're quiet. You don't need to be quiet, this is what you need. It's not my job to teach people how to suck eggs and there's far from it but helping recognize the opportunity. I mean there was one firm that went into the firm of eight advisors who said we just haven't got the business really quiet down and I was like, okay, so let's go through. How many clients have you gone? Fix rate products? When do you contact them? And do you know what? I think within the space of two weeks I've probably had about a dozen second in charge inquiries because they've done a whole campaign email campaign, phone contact the clients.
Speaker 3:Guess what? There was a lot of people that wanted to do stuff, needed to do stuff, didn't know they could do stuff, and it's just those conversations and, as with everything in life, yeah, you have a chat. It leads to different things, right? It's as simple as that. So when the market's tougher, you've got to be more proactive. You don't need it. I think it is more difficult, obviously, if you're coming into it as a broken new entry because you've got to build your client bank, unless you're fortunate enough to be with a business that's providing that in the background for you. So that is a little bit tougher and maybe you need to explore other areas, like the commercial and the bridge development world, that kind of stuff. But people that have been transacting for five years or more, they will have a client bank, even if it's a smaller client bank of people that they probably can help and do business with.
Speaker 1:Definitely and I think the thing is as well with that is that it's again one of the things that I see with regards to broke communities that there will be brokers out there that won't want to touch second charges. They just can't be bothered, they don't want to be proactive with their clients, they don't want to do anything, but then at the same time there will be brokers out there that will want to do that and will want to be proactive with that kind of thing. So there's a lot of if you are seen to be providing solutions for that, obviously the relationship's got to be right because you are a broker. If I come and bothered speaking to my clients and they were ringing me about second charges or whatever the case may be and I didn't want to bother doing that, we shouldn't be turning that business away. As a broker, we should be working with partnerships with other brokers that they want to bother with doing things like that. But we don't obviously like a blue sky thinking kind of way of doing things, but we don't. But I think the way that the broker community is and the more we're sort of speaking to each other and the more we're doing things and we are seeing partnerships of groups and things like community groups on Facebook and things like that.
Speaker 1:With regards to the broker population, it's okay to put on there that you do welcome stuff like that and I'm not going to nick your mainstream stuff. I'm not going to take your protection, I'm not going to rebroke, I'm not going to do anything with that, but you know what? You're too busy to do that right now. I do this day in, day out. Send me that, I'll look after it. Give you the feedback You've retained the client from referring to the other existing broker point of view and from the existing the new broker point of view, They've got some business they didn't have before. So it's very much around working as partnerships where we've, in the past, it's been very it's like that abundance mindset with regards to things like this in terms of opening eyes and working together. But people I think we are seeing more and more of that, but not enough. We can really improve on that moving forward.
Speaker 3:Yeah, I said this to. I don't know what day we're on now, Wednesday, no Thursday.
Speaker 3:Yeah, at the beginning of the week I was in a team meeting and they were literally fresh to second charge, knew nothing, which is music to my eyes because it's a great opportunity to educate that firm and everything else. But as I stood up, I said that if you ask me fired loads of questions me now at mainstream mortgages resume, buy to let. I'm probably going to melt and fall into the floor and disappear or hope the floor swallows me up, because it's not my ground. I don't talk about that day in, day out. But if you phone me with a second charge, a bridge or whatever it may be, I'm going to be able to help you because we do this day in, day out. That's why we are specialists and experts in that field. So when those clients do present themselves, or if your client knows that you've got access to those kind of products, you don't need to be an expert. You need to work with us because we are the experts and we help you transact on that deal and facilitate what the appliance looking to do.
Speaker 1:Exactly, and I see it's been. It's having that been scared of that kind of transaction and not being it's like knowledge, isn't it? And you do really help and support the brokers with their knowledge regarding this whole thing, because it's not something that we're dealing with day in, day out. They don't want to look stupid in front of their client but actually if they can talk to you and you give them sort of how it is and give them that honest feedback, they can give that to their client and again look like the skill and knowledge in this particular area that they've not touched for a year or two years or whatever their case may be.
Speaker 3:So yeah, absolutely.
Speaker 1:Well, and one thing that I wanted to just sort of get you take on really is that you talk to a little bit. You've sort of talked twice about the commercial aspects of things in terms of from there were two things with it really how does commercial lending with positive work? So in terms of if I'm a broker right now and I've got a commercial opportunity, how does that work? And then, secondly, how have you sort of seen the commercial market start for the so far this year?
Speaker 3:Yeah, we hold a market access, so we have everything from high street, fruitier, specialist and challenger banks, so everything's to cover all eventualities. I think probably one of the toughest parts with commercial has been the cost, because everything went up in costs, as did with the rest of the world on finance and so on. But then, yeah, there's more consideration around is the client going to be under occupier? Are they going to be investor? How long have they been trading? Ideally, lenders want two years books, preferably free or more. What business they running If they're purchasing? What's surrounding that business? What's adjacent to it, what's above it? What's their experience in the market? Yeah, et cetera, et cetera, et cetera. So there's a lot of variables around it, but I think there's just there's more appetite for it from an investment point of view and a safe.
Speaker 3:If people that are running businesses, their cost of business is going up, their bills are going up, the utilities are going up, their lease is being or coming to an end of the term, but their rentals going to increase and actually they can achieve a term product that's actually going to make more financial sense to them. That's what they're looking at doing and it's just stayed very point. It's just there's a lot of activity and I think it's been a lot harder to place with a lot of clients, just because of the cost. But again, for brokers, I mean there are brokers that will specialize in commercial or take on commercial themselves, the heroes that they are. And I mean I'm not saying that tongue-in-cheek fair play, because it's not a quick transaction, it's not a fast transaction, it's pretty long-winded and can be a lot of chops and changes along the way as well, but the majority of brokers will go.
Speaker 3:Can you do this? Can you contact the client? Can you take on the deal and pay me some money and end of it? Yes, we can. Oh, brilliant, dave, it's yours, have it. I mean the nicest possible way, have it. Keep me in the loop about what's going on.
Speaker 3:And then we've did that. I mean, yeah, a key area we saw last year was people looking to acquire commercial premises. Well, it's not a quick transaction and if there is a time restraint on it, we're actually doing bridging finance as the short-term solution, with the working on the commercial exit in the background, so that the client could actually obtain the property they wanted to get, which, again, being multi-products as a business, is where we're able to step in and go. You're never going to get that commercial walk is through in the time that that client's told them they can get it through or they've got to play with. But what we can do is look at this, here's an option and we can exit on the back end of it with the commercial term For the broker.
Speaker 3:That's brilliant, because they've ended up with two deals off the back of sending one inquiry. But also, more importantly, if that's the client's wishes, they can transact and do what they actually need to do rather than losing out on the property. Sometimes it doesn't always work out that the client said well, I don't want to take the cost of the extra bridge and if I'm not going to be able to do it in time, I'll go back to the drawing board and start elsewhere. That's the client's prerogative and with everything we do, regardless of whatever product, he's got to be right for the client. But where it does work for the client and the client's in agreement for what needs to happen, then we've got the solution.
Speaker 1:I think that's the thing. Again, it goes back to education for the brokers of understanding that commercial does take a little bit long. We all think residential takes long, but then when you look at the commercial aspect and I think it is I was funny if I was talking to a broker yesterday about this exact thing in terms of their understanding that things just take longer when it's sort of commercial transaction, it just does and that's not that. I think we have enough to worry about and trying to change enough in the process of residential mortgages and that's the kind of thing that we can't do anything about, we can't control, and we do talk a lot about that and worry about that and complain a lot about that when we can do nothing about it. Commercial aspect as well. Again it goes back to and I only know through experience of referring and doing commercial, I only know that these things do take a little bit longer because it's more, because obviously residential when you're moving home it's a bit more personal than it is from a business transaction point of view. So it's interesting to get your take in terms of how the start from commercial, because that's what I do see, that it's quite a big year for commercial and it's having that.
Speaker 1:Again, talk about it. Having that tooling your toolbox, having that in your locker to go. Do you know what? I can talk about it? I've got a little bit of understanding about it and, like you say, I think it's the solution for the client. Is that because with yourself you've got that bridging aspect as well as the commercial Client sort of say OK, this is the scenario, it needs to be completed within the next four weeks or whatever. You think you've got no chance whatsoever. Like you can smile about that. Like a broker who's not educated might say that in quarry and gone, board going, yeah, but no Client, I'm sure we can get the money to you within four weeks. You know, as I know, that you've got not a kind of no chance of that happening.
Speaker 1:However, there is a solution with bridging. But this is where your niche and what you do comes into it, because, again, it's all about educating the broker to go, but do you know what? We're not going to get that in within four weeks or whatever. But this is something we could look at, doing this and then that. And let me say do you find that cost from a commercial? Obviously, commercial lending just costs. More obviously, bridging is not a cheap option Once you've educated the broker, and the broker can then educate the client and then understand that well, this just does cost more as a transaction. I think it's, so the process is slower and it costs more. Brokers need a better time to understand that.
Speaker 3:Yeah, I mean talk about bridging. Everyone says it's expensive, but again, some people might find out I need a bridge because they know what they're doing or they know that that's the only way they can transact, but a lot of the time. I give an example last week broker phoned me. Client's gone to auction Was successful, which is quite unusual. Walked out, paid their fees non-refundable 14 days to put a mortgage in place. Hadn't spoken to their broker before going to the auction house.
Speaker 2:Just got in and thought yeah, I can get a mortgage at the end of it.
Speaker 3:Dave, help, can you help? So the bridging market isn't transacting as quickly as it used to as well, and I don't think any part of the market is in the current conditions. Have we got a lender that can do it? Yes, we have, absolutely. We've got a lender of the work in the time restraints needed, but they're going to have to take a bridge, so kind of relay the information to the broker and he's like well, the client's probably not going to be happy with that. The client probably should have told you that I can't walk in a bid on a property that they were going to walk out with. Yeah, and a lot of the time we'll provide terms before the client goes to auction they walk out empty-handed, because that's the very nature of what happens.
Speaker 3:But in the instance where something is needed, well, sometimes cost isn't even part of the conversation, because it's like well, you've just put down X amount of deposit and non-refundable fees, and if you don't put the finance in place by this time, you're probably going to lose the property as well. So you're out of pocket by thousands and thousands of pounds. But then you know bridging, I think when you kind of explain that it's actually a term product condensed into typically a 12-month term, and it's going to allow you to acquire what you need. So something that a surveyor is not going to put a value on, something that a lender is not going to say is lettable or livable, it allows you to obtain it. So, do you want the property, yes or no?
Speaker 3:And also there's a lot of different ways that you can make bridging finance more attractive on rate and cost-wise by cross-charging and using different securities and understanding the true client's demographic, which I fortunately pick up quite a lot of inquiries where others in the market aren't asking those questions. I hope they carry on to do that, but you don't get by understanding their situation and there's ways to make it more cost-effective and attractive to them. But it's a short-term solution. It's going to come at a cost. Mortgage lenders make their money over the term that you're fixed in for or over the full term you've got it and that's where they're making their money. If you're condensing that into 12 months, something's got to give. So it kind of you know. But again, I suppose from a point of view of the broker maybe not doing bridging, understanding that and the client definitely not understanding that that's the education piece that continues and keeps me and my team in the job.
Speaker 1:Exactly, and the lack of education with other firms and other lenders in terms of that aspect. Because I say it is Everything we talk about. It's just about knowing your client. It's not just knowing that one Transaction is looking at everything overall. What are they looking to do short term? What are they looking to do long term? Talking about those long-term goals and things that.
Speaker 1:Because, like you say, short term borrowing cost money, like it's so it's gonna. It's it just cost money so long as you, the quick, you understand that as a broker and it's a different transaction to a residential mortgage that whatever center rate is over the 30 years, 35 years, however many years, the lender is gonna make money on that. It's just a different product base. There. The right, it goes back to equity release like a we I, we talk, I talk about actually it's a lot. Equity release is the right product for the right person. Is it for everybody? No, it's not. It's bridging for everybody? No, it's not, but for the right person at the right time, I'm bridging. Equity release is priceless. It literally is priceless for that individual.
Speaker 1:So as a broker, you can't make judgment in terms of I don't think clients will be happy that, in terms of paying those fees. You ain't paying them like you're not. You're not the one that's paying them, so they they're not. You're gonna see it as a fee or a percentage. Where the client is about. Your job is to see that short-term piece for the client. So they go, look at it short-term but look at it long term as well. If they're commercial lending, they're having to bridge. They've gone to an auction and the hammers gone down and they've had to submit their 10%, which is what happens at the auction. If they're buying a 200 grand, 300 grand, they've just sort of 20, 30 grand put down as security. If they're not completing in 40 days, it's gone. It's not like oh yeah, we'll give you a bit more time and I just need a bit more time. It's not like a rescue, it's literally a business transaction and that has to happen. It's black on that point of view.
Speaker 3:Yeah, definitely, and we're seeing a lot of purchase pre-sale stuff at the moment. So potentially the clients found the property good opportunity, whether that's a desirable property, a forever home, or you know, a property that's just come on the market a really good price. They've not even considered putting their property on the market yet. So they need to be a cash buyer. So they're using bridging finance for that. Or, yeah, there's a lot more downsizing going on at the moment. So clients are saying, actually, the cost of running this property, it's not viable, we don't need it, we don't need that six bedrooms when there's two of us living in there. So actually, let's downsize, let's move to wherever. It may be that we would. We were probably looking to go long term anyway and they're acquiring that property but using fridge as finance either to acquire or maybe to renovate before they move into it ahead of selling theirs. And actually, if the bridging finance is used Appropriately, it works perfectly for those kind of scenarios and it's you know, and again you had a broker say this to me this morning. Dave, I'm so sorry, this is a sick inquiry. I've sent you in, you know, two months or whatever for a bridging finance. I was like, well, first of all, you're looking for it, so well done. But they've all gone in the bin. Well, a lot of it will, because the client goes that's too expensive. Okay, it's too expensive. Okay, I'm not in love with that property, as much as I thought it was okay.
Speaker 3:Back to the drawing board. A rich relative comes out the woodwork that they didn't want to speak to and gives them the money, or the mortgage is put in place in time by the mortgage broker. Great, that's the best outcome. Brilliant, that is the best outcome. But where that's not possible, you know the client does need the finance. Where Someone else isn't willing to lend on it, or their age is an issue or their income is an issue with them, they've got adverse or whatever else, then the bridge loan is there, and if it doesn't go ahead because the clients managed to obtain it elsewhere, well, typically that's probably the better option for them. But if they can't and they really want that property or they need need it to do whatever they need to do, that's when the the value of that product comes into play.
Speaker 1:Definitely and, like I said, he just goes back to the right product for the right person at the right time. That's exactly. It's like the story that you've just talked about there. Like that he's the right product. So, dave, we've been on sort of 40 odd minutes again and with no agenda and just sort of chatting away and Anything else you want to talk about that we haven't talked about. Or you sort of done now after you, sort of hard day shift of long, a lot, lots of long coffees and sick children.
Speaker 3:There's. There's definitely more coffees to be had, for sure. My wife was just. So I've actually been out this morning visiting brokers and I came back so I had another virtual session before yours and then yours, and then I've got to a quick change. I'm heading to London to meet up with the lender and then meeting up with another industry friend to talk about doing a podcast actually, funny enough, but so, yeah, so that we might be getting you on to mine. And then, yeah, just catching up with another broker in London as well. So, yeah, just continuing the same sort of agenda. Really, it's just busy, busy, busy. Back long way at last. I'd much rather be busy than not, and it's great to see the market being more active and Brokers looking for ways to help clients and being more open to you know, the stuff we, the stuff we do, is it is always going to be secondary to any broker, but it should always be part of their talk, it when they're, when they talk to clients.
Speaker 1:Absolutely 100% agree, and that's key to building long-term mortgage brokers as well. That's important thing from a broker's broke point of view. So, dave, you've obviously got busy schedule this afternoon, so thank you so much for your time. Thanks for agreeing to coming back on, and I've obviously in October they go thing and then we'll get you back on there again sometime early 2025, and who knows where we'll be then we will see so, but thanks ever so much for your time.
Speaker 3:Thank you, mate, really appreciate it.
Speaker 1:Thanks for being a great guest, as always. Dave, really appreciate you taking the time and effort, you busy schedule of educating brokers and talking about everything positive and so, yeah, I really appreciate your time and effort. Coming back on to the podcast for the third time, I'm sure we will have you back on in the future any Comments, any issues, any thoughts on this week's podcast and, as always, please leave them in the platform you listen to, a watch the podcast or direct message me if you feel better doing it that way. Absolutely fine, absolutely fine. I've got a few more solo episodes coming up.
Speaker 1:We've also got Haley Skinner coming back on the podcast in a few weeks time. Marty Nan as well is coming back on the podcast to talk about his Space and what he's been doing. He's been self-employed as a broker now, so we've got a lot of other things coming up over the next few weeks. So, yeah, and any other guests or any of the suggestions or anything you want me to talk about, again, please leave them in the message, in the comments, message me directly in terms of your thoughts and feedback and, as always, don't forget to run your own race.