"It’s no secret that the housing market has been sluggish recently and there are problems with a lack of properties coming onto the market."
We spoke to Dave Miller, client account manager at Spicerhaart Corporate Sales, about the firm's proposition and what can be done to prevent an interest-only maturity crisis.
FR: Tell us a bit about Spicerhaart Corporate Sales’ proposition and what it offers to lenders, brokers and borrowers.
Spicerhaart Corporate Sales is the specialist asset management arm of the Spicerhaart Group. We offer a total management service for repossessions, part-exchanges, relocation schemes and a range of other property sales.
Our goal is always to achieve the best possible sale price for a property, in the shortest possible time. This is achieved by continuous investment in people and technology, embracing innovative processes to improve efficiency and effectiveness.
We also offer a range of valuation services for residential and commercial properties.
FR: As client account manager at Spicerhaart, what does your role involve and what does a typical day look like?
A typical day starts at 6am, heading into work or if I’m feeling energetic going to the gym! I spend about three or four days a week in the office in Blackpool, and the rest of the time is on the road, meeting both existing and prospective clients.
My job is to manage our client relationships to drive performance and positive customer outcomes by always looking for innovative solutions that we can offer.
As such my role is varied and includes everything from performance reviews on properties we are selling, dealing with projects that we are currently working on, preparing and delivering presentations, producing tender documents and also dealing with individual properties and complex cases that we are instructed on. I can genuinely say that no two days are the same and one phone call or email can change everything dramatically, so I have to be on my toes.
Typically a day will involve fielding a broad range of emails, reviewing cases and speaking to our operational teams to ensure that we are doing everything possible to get the best price in the shortest possible timeframe. Various conference calls or meetings could be scheduled and then there are high-profile cases to manage – contentious properties, high value properties, complex commercial properties, even equestrian facilities.
I usually leave work about 6.30pm to avoid the traffic on the drive home. It’s about an hour’s drive and once at home I get to see the children briefly, put them to bed and then have a bit of downtime, or try to clear some more emails.
FR: Earlier this year Spicerhaart launched an interest-only solution for lenders – tell us how the proposition is helping lenders and customers and what more can be done to prevent an interest-only maturity crisis.
The market-leading approach we offer is unique, offering lenders and also borrowers a bespoke service. We deliver a strategy for lenders within 90 days for cases across the UK where the term has expired and there has been no effective customer engagement.
Our focus is on securing fair customer outcomes – with repossession always a last resort. We engage directly with customers and explore the full range of options for redemption of the loan, conversion to a repayment basis, refinancing and voluntary sale.
We have seen a significant drop in the number of interest-only loans, with the numbers falling by more than half in the past seven years, based on the latest UK Finance figures. UK Finance also reported that there were only 13.4% of loans that had an LTV greater than 75%. This suggests that there are a number of options for these borrowers.
We don’t foresee a maturity crisis as there are options available for the vast majority of borrowers, we see our role is providing these options in a clear and transparent manner to help borrowers understand the options available to them and to the lender, and then offer the appropriate assistance to aid the borrower achieve their agreed goal.
The continual evolution of the later-life lending market has certainly assisted a lot of interest-only borrowers and I’m sure more innovative products will come to the market to assist borrowers in the coming years.
There are 126,000 loans due to mature by 2020, however, and it is these customers we want to try and help. We foresee there will be a much greater need for our services as we move into the new year as the latest figures only showed 31,000 expired loans.
FR: What other challenges are facing brokers and lenders in the current financial landscape?
It’s no secret that the housing market has been sluggish recently and there are problems with a lack of properties coming onto the market.
Although there are still problems with affordability for a lot of first-time buyers, Help to Buy and the stamp duty exemption have helped to sustain demand. But stamp duty still has a big impact on higher value transactions and that causes blockages that have an effect across the whole market.
Added to that we have the ongoing political and economic uncertainty around Brexit which is undermining confidence all round.
We’ve also seen a number of high-profile retail firms entering liquidation and that inevitably has a knock-on effect on spending and on default rates.
FR: If you could see one headline about the mortgage market in 2020, what would it be?
I’d like to see lenders taking a different approach to customers, trying to nurture a longer-term relationship rather than a purely transactional one. People’s circumstances and needs are different at various times in their lives and I’d like to see lenders showing more flexibility around that. One example would be to make it easier to switch between interest-only and repayment at various stages in people’s lives.
Household income can experience a temporary dip for a wide variety of reasons – caring responsibilities for children or for older relatives, illness or injury, redundancy or career change – and equally there are life events that cause increased expenditure, such as the birth of a child.
For most people, their mortgage is the single biggest bill they have to pay each month, so the ability to flex that under certain circumstances could go a long way to supporting people over the course of their lives, and maybe help prevent some people getting into arrears.