In the complex world of the mortgage intermediary market, numerous nuances, challenges, and points of deliberation constantly arise. This is especially true in the rapidly evolving bridging sector, where it has become more crucial than ever to be open and transparent about identifying and addressing any specific pressure points.
One topic that frequently sparks debate is proc fees, raising questions about whether they are balanced across the market and whether they genuinely reflect best practices in deal placement. As a packager with well over 20 years operating across many specialist sectors, we believe that while proc fees are important, they should never overshadow the primary objective of consistently demonstrating best practices.
Client-centricity
The essence of best practice is client-centricity, which means selecting the most suitable product for each client, regardless of the proc fee involved. While proc fees are essential for sustaining the intermediary market, they should not influence decision-making. Unfortunately, there are still instances where an imbalance in proc fees may tempt brokers to favour deals that are more profitable for them, rather than those in the client’s best interest. As an industry, we must move away from this to eliminate conflicts of interest and establish a more robust support system that ensures clients receive the best and most appropriate advice
Legal and valuation challenges
At the other end of the transactional scale, one of the biggest obstacles to closing deals in the current market is the legal and valuation process.
Since the shift to remote work became more widespread, there has been a noticeable decline in the efficiency of both solicitors and valuers. This more ‘relaxed’ approach can significantly delay transactions. Solicitors on both sides of a deal often create bottlenecks, and when combined with a similarly sluggish response from some valuers, it becomes even more challenging to move deals forward in a timely manner. Given that these professionals are crucial in the final stages of any property transaction, their delays can be particularly frustrating for both brokers and clients.
Moving the goalposts
Another issue brokers face is lenders changing the goalposts at the last minute. For example, in one week alone, we encountered six cases for six different brokers where a single lender altered its terms at the final stage, causing significant delays and complications. Behaviour which can undermine the trust and reliability that brokers, packagers and clients expect from lenders.
Of course, there are times when products need to be withdrawn quickly, or criteria must change to address shifting market dynamics, maxed-out lending tranches, or severe service issues. We’ve been in the industry long enough to understand this. However, there are also instances where transparency and consistency have been compromised, and this approach needs to be addressed for lenders to build trust and maintain long-standing relationships.
These two factors—transparency and consistency—are increasingly important in a time when competition is intensifying and lenders must carefully monitor their profitability levels, a combination which may also lead to further consolidation across the sector moving forward.
As the bridging finance marketplace continues to advance, the focus must remain on maintaining best practices and navigating the shifting terrain with integrity and adaptability. The future of the sector is bright and dynamic, but to maximise its vast potential in the right way, all firms involved must stay agile and committed to delivering the best outcomes for their clients.
Donna Francis, Managing Director at Envelop
