An interview with Roger

Roger, can you tell us about your current role and how you got into property finance?

My current role is finding solutions for people who want property finance. I work with experts in different areas of commercial and asset finance, finding solutions for people and their property. I got into property finance almost by accident over 20 years ago, but found it combined my love of working with people with the satisfaction of often very complex problem-solving.

How have you seen the sector change over your career?

When I started, property finance was very much a relationship transaction, with individuals working with individuals. Generally, lending was sensible, with a common sense approach – when something didn’t quite fit, experienced people took a view.  From 2004 to the property crash in 2008, common sense went out the window and if you were breathing (or sometimes if you weren’t), lenders would throw money at you. Post-2008, even good mortgage cases have had a high chance of being turned down, despite the underwriting loosening a bit in the last few years.

How has technology influenced the sector?

When I began, the work was almost 100% paper based, but now more electronic systems have come into effect with electronic underwriting and systems taking over from ‘common sense’ human beings, particularly in recent years and after the breaking of the banking system. Often the underwriting jobs have become deskilled and if you don’t have 3 months payslips and a ‘normal profile’, it is easier for the computer to say no on an over-simplistic algorithm.

What impact has this had on clients?

It has made it very difficult who people who don’t fit in nice boxes or who are developing their business without thinking about boring things like mortgages.  It has also become more complex with lenders taking a much deeper interest in their client’s lifestyles rather than just their incomes, which can lead to some perverse decisions. The good news is, I can normally find a solution, which is very satisfying, especially when people have been turned down by their bank for no good reason.

Are current political events influencing the financial decisions people are making?

Strangely, despite the negativity in the press, all my clients are pushing ahead and living their lives. I have seen very little change, apart a steady growth. Whatever happens in the political realm, the world will keep spinning on its axis – people will still demand products and services and all the fear-mongering will prove to be less awful than the press expect. With something like Brexit, it is complicated, but there will be both unexpected consequences and opportunities. The companies who just concentrate on offering a great service will continue to grow and become more successful.

What have some of your highlights been?

I think my highlights have all been helping people achieve what they want, especially if they didn’t think something could be done. In this job, small achievements can be just as important to someone’s life as a big thing.

What are the challenges currently facing your sector?

The banks and building societies still don’t have the appetite to lend as much money as they should and for everyone having a professional on your side is key.  The FCA (Financial Conduct Authority, who regulate financial services) gives the impression that they are keen in making sure that lenders comply, rather than innovate the market and help customers. Lenders run scared of broad brushstroke regulation, which navel gazes, and says this might be not be appropriate for a section of the market, rather than it might be appropriate for another sector. As they back this up with retrospective fining lenders are shy of stepping out of line and this can make it very challenging for someone negotiating the market. Normally we can find someone who will help, despite the general reluctance to lend!

What’s the best bit of business advice you’ve been given?

Just do it. And commit to it! There are a lot of people out there who don’t act on their dreams, and you should probably stop worrying and just do it. It might just work.  I have found that if I commit to something, things tend to grow exponentially, although the destination isn’t always reached in the way you expect. Something I should have taken more notice of is listening to people who have done it before and ask them questions, as I have never found a really successful person who wasn’t willing to share their secrets.

What do you think your industry will look like in 10 years’ time?

I suspect that it will fragment into two parts. The market has started to do this, with the deskilling of many high street lenders’ underwriters to a tick box exercise.  In 10 years, it is likely that computers will take more and more of this role with open banking and comprehensive valuation databases. This will lead to a simple electronic yes/no system for employed applicants with bland credit files that a computer system can easily categorise, after interrogating databases to give a quick simple answer. In this way, it will move towards a car finance style instant offer. I suspect we will begin to see electronic advisers who will point these applicants to the cheapest product with a simple decision tree process. With improvements in government records and legal systems, it is possible that the long delays in buying and selling will be a distant memory.

And what will happen to clients with more complex situations? 

For more complex situations in terms of income and future planning, I can see greater and greater need for advice, to make sure that firstly you can get a product, and secondly that this products does exactly what you want without a nasty sting in the tail. Boutique bespoke lenders, which are beginning to appear on the market, will probably take more of this market, underwriting in the way that the old fashioned bank manager used to work, trying to understand why something looks the way it does and why your life has been arranged for your benefit, not just to satisfy a mortgage lender. We could move towards much more individual pricing of loans like the commercial market, so your mortgage could be much much cheaper than your neighbour with an identical house and the ‘same’ mortgage.

What advice do you have for first time buyers?

I often meet first time buyers who have bought a house, but never thought about the mortgage that buys it. The difference in what they have bought, and what they could have had, could be £10,000s or £100,000s less if they had applied the same thought to the finance as they did to the curtains. Clever people will still deal face to face, but they might become a minority. Often presentation can make a massive difference to the gist of a mortgage or finance.