PARADIGM MORTGAGE NEWSLETTER SPRING 2024 www.paradigm.co.uk/mortgages
CONTENTS 4 Paradigm Mortgage Services Introduction from Paradigm Richard Howes 6 BM Solutions Improving the quality of rental home benefits landlords and tenants Leigh Church 8 Green Finance Institute Is your business ‘in the Green’? Rachael Hunnisett 10 Accord Mortgages Embracing Diversity, Equity and Inclusion: My Reflections on Race Equality Week Gurpreet Chahal 14 Paradigm How encouraging employees to bring their whole selves to work can benefit your business... Riona Mulherin 16 Newcastle for Intermediaries Supporting mortgage brokers through partnership Francesco Di Pietro 18 Paradigm Consulting Meet our Policy team! Carmen Bews
Hello and welcome to the first Paradigm newsletter of 2024! It only seems like yesterday we were planning for 2024 and wondering what it was going to look like against the many myriad of predictions the great and the good were making at the end of 2023. I think for the most part, no one expected the speed with which it started as Lenders of all shapes and sizes began the year with some serious rate cuts injecting real confidence into the market, and as a result everything seemed to move to the benefit of Lenders lending targets, advisers being able to talk in the positive and be confident with their clients, and clients thinking ‘Perhaps rates have peaked and I can now move or raise finance at a rate which works for me’. It’s often said the housing market is predicated on confidence and January 2024 certainly bears this out. Given the uncertainty that prevailed in 2023, we finally had some good news, the uncertain times that characterised 2023 appeared to have been overturned, maybe the future is not as hard to predict; allowing advisers to advise and clients to plan with confidence, where before they could not. Data to the end of February from CACI which records Lender data on a weekly basis showed an uplift in Residential mortgage applications for the first eight weeks of this year’s collective application total to 185,912 - 30% greater than for the equivalent period in 2023 - which is great news, and hopefully bodes well for Q1 and beyond. Having said all that, I think we do need to be cognisant that any so-called bad or indifferent headlines from an economic or political nature could blow us off course, resulting in some of the feel-good factor being removed and the market moving backwards. What we don’t want is a cappuccino effect, which is a lot of froth and no substance. For a deeper dive into what 2024 could bring, I suggest we look at 4 areas to see what 2024 might bring, namely: politics, technology, costs and regulation. Whether it be a global view or simply looking at the UK, the political scene has been, to say the least, turbulent over the past few years. In the UK, we have had new Prime Ministers, Covid, Brexit and now a technical recession. Globally, of course there is Ukraine, Gaza and the US election later this year and finally, our own election coming soon too. For all the statisticians out there, the US and UK elections are just two out of 64 elections due to take place this year worldwide - with these 64 countries representing almost half of the world’s population. All of these events can add to uncertainty and a lack of decision making until they are resolved. In the UK, we may have a new Government who decides to throw caution to the wind with all sorts of incentives from tax to mortgages, thus creating and continuing the feel-good factor. Add that into several other new Governments around the world and we could have the conditions that will lead to more positivity. The next area, technology is fascinating I think, with regards to where it could go and take the traditional relationships in our Richard Howes Director of Mortgages Paradigm Mortgage Market Update 04 SPRING MORTGAGE NEWSLETTER
sector. The software firm Intelliflo in their E-Adviser index believes tech adoption is the “make or break factor” for future success of advisory businesses. The cynic might say, well they would, wouldn’t they? However, studies have shown the adoption of the right technology to complement the values, vision and culture of a business will improve it, both in terms of efficiency, client relationships, and overall profitability to name but a few. AI is obviously the current tech darling, as it offers opportunities to automate tasks, manage data and comply with regulation, thus, potentially allowing time for more client interaction. You can find a wealth of information and some useful resources about AI, including a video from our recent webinar, on our new technology hub here. Next, we need to consider regulation. The introduction of Consumer Duty has redefined the boundaries here, and I think it is fair to say that everyone involved in the advice process is, and has been, affected by it. There are some significant landmarks for Consumer Duty in 2024, in terms of reporting and understanding the process for the FCA. We have recently launched a new Paradigm On Film video on this topic, in which we discuss this in more detail. We’ve also recently launched our new eBook on ‘Life under the Duty’, which is also well worth a read. It is not just regulation through the regulatory bodies which will have an impact in the private rental sector if we have a Labour Government, I am sure they will be keen to pass their Private Renters’ Charter if the Conservatives’ Renters (Reform) Bill has not been passed before then. Although these bills are very similar, there are some notable differences for advisers and landlords to be aware of. Therefore, it is essential, now more than ever, to stay informed on the latest legislative news as we move through the year. Many of these topics are covered at our upcoming events and webinars, please take a look here to see our upcoming events which may add value and help with 05 SPRING MORTGAGE NEWSLETTER attaining your CPD. Finally, we have costs, the simple act of running a business, as you will know, has increased immeasurably in terms of office costs, staffing costs and technical resources needed to run the business. It is great to read reports that suggest four in ten brokers are planning to grow their firms this year*, according to a recent report from Paragon, but if you read into the report attracting new staff is difficult, time-consuming and costly. However, such costs I would suggest in the main have not been passed on to clients, making profitability harder for firms to achieve. I have not heard of firms increasing their fees to clients whether it be in new business or for remortgages or Product Transfers. Its interesting when one looks at the Wealth Management industry in terms of costs and regulation and fees, due to RDR, MIFID II and Consumer Duty there is a definite drive down on fees impacting wealth firms, but also because this regulation has put the spotlight on areas clients were being charged for but not receiving. This is not the case in mortgages, where advice and transaction result in outcomes which are received by the client. It would be great to see more Lenders take the costs to their major - and at times only - distribution source much more seriously, and reward accordingly given the economic backdrop advisers are working in. But back to this edition, once again we have tried to source articles and ideas you will enjoy reading about and find of interest, our contributors range from major banks to Building Societies and the Green Finance Institute, we also have some excellent contributions on D&I which I would encourage you to read. Once again, we would love to hear your feedback, and hope you enjoy reading this edition. *Data firm BVA BDRC surveyed 337 mortgage intermediaries in November 2023 for Paragon Bank.
One in five households (19%) live in the private rented sector (PRS), a figure that has stayed constant for the last four years. And every one of them deserves a good quality, warm home. The vast majority of landlords provide exactly that, and many are highly motivated to improve their rental properties. In return for this investment, they know they’ll attract better, long-term tenants and maximise their return. Boosting the overall quality of homes in the PRS is good for everyone. So, how are landlords doing? Making strides The government’s latest English Housing Survey, published in December, highlighted some of the areas where landlords are making strides. Support for those receiving housing benefit: Landlords are now providing much-needed homes to a quarter (24 per cent) of renters in receipt of housing benefit, up from 20 per cent in 2018. Historically many of these households would have lived in social housing but, with stock remaining low, the PRS plays a vital role. At BM Solutions, we welcome landlords who are supporting these renters and most lenders are happy with landlords letting to tenants in receipt of benefits (despite a persistent myth that it isn’t allowed). Energy-efficient housing: Over the last 10 years, the proportion of overall homes in the highest energy efficiency bands (A to C) increased from 19 to 48 per cent. Homes in the social rented sector saw the largest rise (36 to 70 per cent) but the PRS saw an increase too, more than doubling from 20.2 to 44.8 per cent. Average Standard Assessment procedure (SAP) ratings in the PRS rose from 57.2 in 2012 to 65.2 in 2022 (from a low to a high D rating). And, despite the cost of living crisis and rising mortgage rates, SAP ratings even inched up between 2021 and 2022 (from 64.9 to 65.2). Landlords are doing a good job of providing more energy-efficient properties in the PRS, and we expect and encourage this trend to continue. Room for improvement It’s not all good news. The cost of living crisis has inevitably impacted both landlords and tenants and the latest figures on damp and mould prevalence in the PRS reveal a small slide backwards. Despite landlords having made improvements to energy efficiency, nine per cent of homes in the PRS now have damp compared to seven per cent in 2019. This compares unfavourably to the 5.4 per cent of social housing and 2.3 per cent of owner-occupied homes with damp issues. However, it’s not necessarily down to poor Improving the quality of rental home benefits landlords and tenants 06 SPRING MORTGAGE NEWSLETTER Leigh Church Head of BM Solutions BM Solutions
maintenance from landlords. Inflation has disproportionately affected tenants, with average rents and energy costs having soared. Some instances of damp are likely due to tenants being unable to afford to adequately heat their homes. We know that damp and mould have a significant impact on wellbeing. According to the Parliamentary research briefing, Health Inequalities: Cold and Damp Homes, they can lead to worsening asthma and increase the risk of heart disease. They also impact mental health, with depression and anxiety more common among people living in damp homes. The English Housing Survey reflected this, showing that private renters score lower than owner-occupiers across its range of wellbeing measures. What can brokers do? For many landlords, damp and mould is a recurrent bugbear, demanding their time and money, and potentially negatively affecting the value of their property. The data shows that landlords have made progress on boosting energy efficiency in the PRS, but the improvement trend has stalled, or reversed in other areas. However, you’re well placed to help them. We all have a part to play in improving the quality of rented homes because it indirectly benefits us all. Plus we know that many of our broker partners are landlords themselves. So, where do you start when it comes to supporting landlord clients? 1. Bring energy efficiency into your client conversations. Explain the benefits of improving their property’s EPC rating, preventing damp and mould and making the property cheaper for their tenants to heat, and signpost them to useful information, such as the Tenancy Deposit Scheme’s guide to preventing damp and mould. 2. Give your clients information on any relevant grants they or their tenants could access to fund energy-efficient improvements to their property, particularly if they have tenants in receipt of benefits. Check out the following options: • The Energy Company Obligation (England, Wales and Scotland) • Warmer Homes Scotland (Scotland) • Nest Scheme (Wales) • Affordable Warmth Scheme (Northern Ireland) 3. Complete the CPD-accredited training module about EPC regulation on our BM Solutions Sustainability Education Hub. 4. Speak to landlords about how they can fund any improvements they plan to make to their property to boost energy efficiency or reduce damp problems. Progressing together It’s encouraging to see the improvements landlords have made to the energy efficiency of privately rented homes. More efficient homes are warmer and cheaper to run, so they attract better, long-term tenants who can heat them adequately to prevent damp issues. They can also better hold their value and potentially give landlords access to more competitive mortgage rates. It’s a virtuous circle and an opportunity for you to deepen your relationships with your clients during 2024 and beyond, to discuss the benefits of improving the quality of their rental properties. Here to help Reach out to your local BDM to understand how BM Solutions can support you and your landlord clients to improve the quality of the UK’s rental properties. This information is correct as of December 2023 and is relevant to Birmingham Midshires products and services only. If you do not have professional experience, you should not rely on the information contained in this communication. If you are a professional and you reproduce any part of the information contained in this communication, to be used with or to advise private clients, you must ensure it conforms to the Financial Conduct Authority’s advising and selling rules. Birmingham Midshires is a division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh EH1 1YZ. Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 169628. 07 SPRING MORTGAGE NEWSLETTER
From recycling your household waste, to switching to an electric car, to brands promoting long-lasting clothes over fast fashion - you are likely no stranger to a headline or two on the importance of going green. And this transition to sustainability is also embedding itself into the way we do business. Once upon a time, having a sustainable business meant keeping your accounts in the black and ensuring you had enough pipeline to pay the upcoming months' bills. However, since the birth of the green finance sector over 30 years ago, having a sustainable business can have a whole new meaning. Is your business ‘in the green’, and what are the risks of overlooking this paradigm shift in the market? A quick refresher on some of the facts: The Paris Agreement legislates that the UK is mandated to achieve Net Zero by 2050. Buildings account for 23% of the UK’s overall carbon emissions. In order to improve our hosing stock to the level required by 2050, the Climate Change Committee estimates that investment of £250 billion is required. Where could that money come from? It could come from government grants or subsidies; however, it is widely accepted that government money alone will not meet the significant funding gap. The reality is that a substantial portion of the investment needed will rely on finance from the private sector. When homeowners are looking for finance in relation to their home, from purchases to home improvements, where do they turn? Often, to their mortgage advisor. The mortgage industry has long been known for its adaptation and flexibility in meeting the needs of the customers of tomorrow. On the subject of green mortgages, the complexities and scale of the investment required to decarbonise housing stock adds additional blockers to innovation that the market is still grappling with. Is the solution products which integrate home upgrades as part of the mortgage journey? Could whole home assessments be the answer? Or flexible drawdown facilities and greater borrowing power on green homes through enhanced mortgage affordability? Is a margin discount a key identifier of green mortgages which is here to stay or is that the start of a longer journey of data capture and innovation? Connecting homeowners with this type of finance will be the work of a wide range of solutions, including some of the above-mentioned products as well as other solutions such as Property Linked Finance and a wider range of embedded secured and unsecured products. Amongst the backdrop of product specific debate, of which there is plenty, less discussed is how the broader topic of ‘green’ and sustainability impacts your business as a Directly Authorised firm. When it comes to the risks and opportunities of this segment of the market, where do you start? Regarding the opportunities, I have laid out many of those above, the bottom line is that of the £250bn investment required in housing Is your business ‘in the Green’? 08 SPRING MORTGAGE NEWSLETTER Rachael Hunnisett Associate Director for Built Environment Green Finance Institute
stock, there is a significant opportunity for the mortgage sector to plug that funding gap. The risks or challenges of ‘green’ may be less obvious to spot. Later this year, the Green Finance Institute will be launching the GFI’s Certificate in Green Mortgages which will help mortgage brokers and real estate professionals understand a bit more about green finance. The team and I have been working with a wide range of experts to pull together all the relevant facts about green finance sector and how they relate specifically to mortgage advice. These have been condensed into one 90-minute training session. As part of the training, we talk about the climate crisis, what that means for the UK, for UK housing and specifically for the mortgage industry. We consider the impacts of climate change on the mortgage advice process and delve into the risk of doing nothing. It also contains case studies about what this looks like in practice, an example of one below: • Purchase case, clients state during the fact-finding process that within the next 2 years, they would like to put solar panels on their home. • The advisor recommends a 5-year fixed rate product, the advisor does not mention the client's ambition to put solar panels on the property anywhere within the recommendation or suitability report. • 2 years later, the clients contact the advisor to say they would like to discuss raising additional finance to fund the solar panels, they might also like to consider some other home upgrades at the time. • The lender recommended by the advisor does not permit solar panels to the security property or allow mid-term additional borrowing. 09 SPRING MORTGAGE NEWSLETTER What are the risks to the advisor here? What is the outcome for the customer? How might adding some background about energy efficiency upgrades to the suitability report have changed this scenario? I used this example as it highlights, how even though the advisor has not recommended a green mortgage, the changing needs of customers now and into the future mean that at least a baseline understanding of the financing needs and restrictions relating to sustainable home upgrades is fundamental. Whilst it is not necessary to be an expert on different types of solar panels/heat pumps or any other green tech, understanding how to finance these home upgrades is not only a significant commercial advantage as the market gains pace, but also a fundamental part of future planning for your business. On the 31st May this year, the Financial Conduct Authority’s anti-greenwashing rules come into force. These consider not only those giving advice within any FCA regulated firm, but also anyone in a compliance function too. Reading up on this and understanding how this relates to your business will be a crucial step forwards as together, we facilitate the UK’s transition to net zero. The future of the green mortgage movement is exciting. There is so much innovation to be enthusiastic about and huge appetite from lenders to support this market and a wide plethora of tools to enable great advice. There is significant opportunity for mortgage advisors in green finance. If you would like to talk to anyone for support on integrating sustainability within your business, please get in touch with your Relationship Manager at Paradigm. Alternatively, you can request a callback from your Relationship Manager here. If you are interested in discussing the GFI Certificate in Green Mortgages, please register your interest here.
As I sit down to reflect on the significance of Race Equality Week, I find myself grappling with a myriad of emotions and thoughts. As an individual from an ethnic minority and a member of a diverse workforce within Accord Mortgages, I understand and can personally relate to the importance of fostering an environment where individuals from all racial backgrounds feel valued, respected, and empowered. Race Equality Week, which took place on the week of 5th February, served as a strong reminder of the strides we have made in promoting racial equality while also highlighting the work that still needs to be done within the industry that we all work in. The essence of Race Equality Week lies in its ability to create a safe environment to spark conversations and drive meaningful change. It serves as a platform for individuals and organisations and the mortgage industry to come together, share experiences, and explore ways to combat racism and promote inclusivity. From panel discussions to workshops and awareness campaigns, the week was filled with activities aimed at raising awareness, generating curiosity and fostering understanding. One of the most impactful aspects of Race Equality Week is its ability to shine a spotlight on the challenges faced by minority communities in the workplace. As a person of colour myself, I have experienced first-hand the subtle biases and systemic barriers that can hinder professional growth and development. Whether it's being passed over for opportunities in the past, being asked to repeat my name as Gurpreet is an “unusual name” or attending an industry event and feeling like an outsider in predominantly white spaces where bonds and circles have remained for decades, the impact of racial inequality can be deeply felt. However, Race Equality Week offers a glimmer of hope by providing a platform for individuals to share their experiences and advocate for change. By amplifying diverse voices and perspectives, we can challenge existing norms and work towards creating a more inclusive and equitable workplace. This not only benefits employees from minority backgrounds but also enriches the organisational culture as a whole and can really help us to drive our industry forward. Embracing Diversity, Equity and Inclusion: My Reflections on Race Equality Week 10 SPRING MORTGAGE NEWSLETTER Gurpreet Chahal Corporate Account Manager Accord Mortgages
One of the key ways in which Race Equality Week can impact the workplace is by fostering a sense of belonging and empowerment among minority colleagues. When individuals feel valued and respected for who they are, they are more likely to contribute their best work and actively engage in the goals of the organisation and the wider mortgage industry. This sense of belonging is not only beneficial for employee morale but also translates into tangible business outcomes, including increased productivity and innovation which is fundamental for our industry. Moreover, Race Equality Week serves as a catalyst for organizational change by prompting companies to reassess their policies and practices through a diversity lens. From recruitment and retention strategies to leadership development programs, organizations are increasingly recognizing the importance of creating a level playing field for all employees. By implementing initiatives aimed at promoting diversity and inclusion, companies can foster a culture where everyone has an equal opportunity to succeed. But we do need everyone to play their part and allyship is a fundamental part in creating that level playing field. Committing to and turning up to events, showing curiosity and seeking to understand whilst also not being a bystander are just some of the ways an ally can help and support in creating a diverse, equitable and inclusive mortgage industry. There is a lot of great work going on within the industry, whether that is internally in organisations or industry led like the work of AMI and IMLA (Working In Mortgages - Shaping the future). However, we need to continue to build on this work and elevate it further if we’re to reach our ultimate goal of creating a truly diverse and inclusive mortgage industry, which means we need everyone across the industry on this journey together. So the question to ask yourself is – are you playing your part? 11 SPRING MORTGAGE NEWSLETTER
For the use of mortgage intermediaries and professionals only. Newcastle Building Society Principal Office: 1 Cobalt Park Way, Wallsend, NE28 9EJ. Newcastle Building Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Newcastle Building Society is entered in the Financial Services Register under number 156058. Call 0345 602 2338 or visit us online www.newcastle.co.uk (March 2024) This information is for use by authorised mortgage intermediaries only and should not be relied on by customers. Collaborating towards a shared goal of helping clients’ homeownership dreams come true. That’s why we continually review feedback from brokers like you and listen to the pulse of the market. This helps us invest in the technology, people, products, and service enhancements we know you and your clients value. Powered by partnership means... Experience the power of partnership today. Get in touch: [email protected] 0345 602 2338 newcastleforintermediaries.co.uk
For Intermediary use only. Content correct at time of publishing. YOUR MORTGAGE WILL BE SECURED ON YOUR PROPERTY AND YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. Firm reference number: 157260. Assess many types of complex income Airbnb considered Top slicing available harpendenbs.co.uk/intermediaries SCAN THE CODE TO VISIT OUR INTERMEDIARIES PAGE HOLIDAY HOME/SECOND HOME • We consider a range of incomes, including pension, trust, investment and maintenance as well as 100% of bonuses, overtime and commission (2 years proof required) • We consider latest years income for self-employed applicants • No maximum age • 75% LTV available on IO and 80% available on repayment HOLIDAY LET • 90 days personal usage allowance per annum • Airbnb considered • We lend in town and city centres as well as coastal areas • We lend on properties above commercial units • Top slicing • Minimum income of £30,000 required • Up to 3 properties on one title considered • 75% LTV available on IO and 80% available on repayment If it’s complex, we might find a way
Workplace wellbeing A recent report from Unum showed that only 51% of companies have a ‘strategic approach’ in place for employee wellbeing. However it also showed that mental health is the UK’s fourth-most common cause of short-term sickness absence and the biggest cause of long-term sickness absence. So it seems like a good time to explore workplace wellbeing and how we can improve upon workplace culture and environment. We know that by taking care of employees’ mental health, we can reap the benefits with not just improved staff wellbeing but also potentially lower absenteeism, higher productivity, greater staff retention and establishing a reputation for being a caring employer and a good place to work. If you are interested in exploring this more and are looking for ways you can offer more support to employees, Unum have a whole host of resources readily available here. Closely linked to this topic, earlier this month, we were pleased to take part My Whole Self Day, a campaign created by Mental Health First Aid (MHFA) England to promote inclusive and supportive cultures where employees can bring their whole selves to work. I thought it would be useful to look in more detail about what it means to bring your whole self to work, and why it’s important for mental health and wellbeing. What is My Whole Self? My Whole Self is the idea that we all have multiple aspects of our identity and experience that make us who we are, such as our background, sexuality, religion, gender, health, and mental health. These aspects are not separate or fixed, but rather fluid and interconnected, influencing how we think, feel, and behave in different situations. When we bring our whole selves to work, we are able to express ourselves authentically and openly, without having to hide or suppress any part of our identity. We are also able to recognise and appreciate the diversity and uniqueness of others, which in hand makes it easier to build meaningful and respectful relationships with our colleagues, managers, and customers. It’s important to recognise that we don’t want to force people to talk bring their whole self to work if they don’t wish How encouraging employees to bring their whole selves to work can benefit your business... 14 SPRING MORTGAGE NEWSLETTER Riona Mulherin Director of Marketing & Operations Paradigm
to share certain things; the My Whole Self campaign is about creating the right environment at work for people to bring their whole self, if they wish to do so. Alarmingly, research from MHFA England who recently surveyed 2,000 employees in February, showed that: • 1 in 5 employees said discriminatory or exclusionary behaviours had a negative outcome on their mental health • 1 in 7 employees have considered quitting their job as a result of discriminatory or exclusionary behaviours Why is “My Whole Self” important for mental health and wellbeing? Bringing our whole selves to work has many benefits for our mental health and wellbeing, as well as for our performance and productivity. We all deserve to feel valued and empowered to be our 'whole self' at work, which can help drive innovation and excellence from individuals. According to MHFA England, some of these benefits include: • Reducing stress and anxiety • Increasing engagement and motivation • Enhancing creativity and innovation, driving positive change and growth. How can we make a change? One of my main take aways from My Whole Self Day is that we all need to take action to address the root causes and issues that are creating these barriers in some workplaces, resulting in people not feeling comfortable to bring their whole self to work. We should be questioning whether our workplace offers a safe, non-judgemental environment for employees and what more can be done to improve this. MHFA England created a range of free resources for this years’ event, including some tools to help companies get involved, including this guide which you might find useful if you’re unsure where to start - My Whole Self: Guide to creating inclusive workplace cultures. It provides a range of practical tools for you to help create workplaces where everyone is respected and valued, and covers topics such as psychological safety, allyship, inclusive language, and mental health support. I hope you found this article useful and that it may spark some ideas on how you can work on enhancing your workplace culture for the benefit of both your team and your business. If you have any questions or would like to discuss further, please don’t hesitate to reach out to me on [email protected]. 15 SPRING MORTGAGE NEWSLETTER
Presentation is important, but it’s only surface-level. To be truly effective, it must be backed up by actions that demonstrate how an organisation is living up to its words. To that end, we are very proud to introduce our updated Newcastle for Intermediaries brand, not just for its new appearance but also for the concrete benefits it offers to our intermediary partners. As part of this, we have changed our name to ‘Newcastle for Intermediaries’, and adopted the tagline 'Powered by Partnership', which reflects our partnershipfirst approach. Something we genuinely believe in, and something we hope to demonstrate to you. From our broker forums and BDM relationship team, where we actively listen to your feedback to help shape our business in a way that better serves you. To our approach to manual underwriting and investment in technology, we are committed to helping you deliver those ‘feel-good’ moments to your clients. This is also demonstrated through our refreshed website, which has been designed to simplify doing business with us. The website provides daily updates on service levels as well as tools including an interactive product finder to identify suitable products faster, an enhanced criteria search tool, a Business Development Manager (BDM) finder, and a live chat facility to help you get to the people you need quicker. Created in partnership with brokers, the website demonstrates our dedication to innovation and streamlining the lending process. Alongside, prioritising our manual underwriting team and ensuring you have easy access to our experts. In terms of our products, we have always been at the forefront of innovation. We were among the first lenders to introduce a Deposit Unlock option, launch the First Homes scheme, and provide support to borrowers with Large Loan and high LTV propositions. Now, we look to continue this innovation with products tailored for the growing, expanding self-employed market in the UK. Self-employed is a label that covers many diverse types of borrowers; in fact, very often, the only thing self-employed people have in common is that they are not PAYE. From consultants to small retailers, sportspeople to tradesmen, self-employed individuals represent a broad spectrum of the economy and display unique preferences, levels of success, and personal circumstances. With over four million self-employed individuals in the UK , there is a significant opportunity for brokers to cater to this demographic. The landscape of this sector is also changing, with a growing number of people over 50 starting their businesses, despite an overall decrease in selfemployment since 2020 . Recent analysis by IPSE (the Association of Independent Professionals and the Self-Employed) shows that the number of self-employed business owners aged 50 and above has increased to 1.1 million in 2023, which is 89,000 more than in 2020. This increase Supporting mortgage brokers through partnership 16 SPRING MORTGAGE NEWSLETTER Francesco Di Pietro Head of Intermediary Mortgages Newcastle for Intermediaries
comes at a time when the total solo selfemployed population has decreased by 154,000. Additionally, it was found that 15% of those aged 50 and over who are selfemployed launched their businesses within the last three years. Self-employed borrowers are a key example of why manual underwriting by people who have a real understanding of this market is so important . Self-employed individuals may have more complex financial circumstances, income sources, and business structures but for a lender who can look at individual circumstances and utilise underwriting expertise, this isn’t a problem. By leveraging expertise and understanding nuance, well-informed decisions can be made that mitigate the presumed risk. We know that this market has been typically underserved due to its complexity. But beyond this, too many self-employed people have rarely had a positive mortgage experience, often being led to believe that they can't get a mortgage. This misconception is extended as they, understandably, then share their experiences with fellow self-employed individuals. Our response is a commitment to helping our broker partners navigate this complex market and play our part in adding to the choices available in this underserved market. Our BDM team are available for pre-DIP case discussions and have direct access to our underwriting experts, and we also provide live chat support via our website. Our Self-employed range includes fee assistance for clients who need help with costs, products for home purchase, and remortgage on loans up to £1 million. Our criteria is equally compelling. We offer one-year Self-employed products up to 80% LTV, which only require one year's full accounts to support those who have been trading for under two years. In addition to this, our offer is available to limited company directors who have been established for over two years and have shareholdings of more than 25%. We will assess the applicant's share of net profit before tax, using either the average of the past two years' accounts or the latest year if it's lower, or by looking at the latest year's remuneration and net dividend figures. Our approach to supporting self-employed borrowers is just one aspect of our ongoing efforts to identify and deliver solutions that meet market needs. Powered by Partnership is more than just words. We work closely with brokers, review our processes, and listen to the market to help us invest in the technology, people, products, and service enhancements we know you and your clients value. Explore our new and improved website and experience the enhanced features firsthand at www.newcastleforintermediaries.co.uk. 1 - Statista - Self Employment 2 - IPSE - Self Employed Landscape in 2023 17 SPRING MORTGAGE NEWSLETTER
In the words of the Greek philosopher Heraclitus, “There is nothing permanent, except change”. Since joining the Policy team 18 months ago, that has definitely been the case in respect of regulation! The Policy team examine a staggering amount of information from the FCA, Information Commissioner's Office, Financial Ombudsman Service, Prudential Regulation Authority, Pensions Regulator and HM Treasury, along with many other sources. We also attend conferences, workshops, working groups and webinars. Each week we consider collectively new information, consultations, policy statements and how it will impact our firms, as well as how best to communicate this to you. But, who are Paradigm’s Policy team? Let me introduce myself first. I have been in the financial services industry for over 25 years starting in call centre customer services/support roles. I have worked as a mortgage adviser, financial adviser, paraplanner, file reviewer and also in regulated complaints liaising with the FOS. Many of my roles have included training new recruits, creating training plans, and deputising as manager. My passion is good customer service, or I guess we should call it good customer outcomes now! I started at Paradigm in 2019. You may be familiar with me, having previously been part of the file review team! I moved to the role of Policy Supervisor in 2022 when we brought together a Policy team across different parts of the business to give a more rounded approach to our firms’ needs. My role is to supervise all the work that goes through the Policy team. My claim to fame is that I once travelled by police escort on the Deportivo football team coaches to Old Trafford when they played Manchester United in the 2001 Champions league and won! Meet our Policy Team! 18 SPRING MORTGAGE NEWSLETTER Carmen Bews Policy Supervisor Paradigm Consulting Christine Newell Mortgage Technical Director Christine started her career in financial services in 1990. Her roles have included, mortgage and endowment adviser, field and regional trainer, District mortgage sales manager, BDM and a National manager supporting packaging and subprime lender relationships within a large banking group. Christine joined Paradigm at its infancy in 2007 as a relationship manager and became Mortgage Technical Director for Paradigm in 2014. Christine is a natural
relationship builder and looks after our larger mortgage firms helping these firms with their business decisions as well as mitigating risk in their business. Christine brings an overview of the mortgage, protection and general insurance markets to the Policy team. Christine’s claim to fame is her Great Grandfather, Eugen Sandow, was the Strongest man in the world and the first body builder of the time and physical education adviser to King Edward Vll and Queen Alexandra. The Mr Universe trophies that body builders receive as awards are based on Eugen Sandow. 19 SPRING MORTGAGE NEWSLETTER David has over 36 years of financial services experience, 22 of which have been spent in compliance roles. In his career, David has been a mortgage adviser, a mortgage manager, a financial adviser and has held various compliance management roles. David joined Paradigm at inception 17 years ago as Technical Services Manager, with responsibility for building Paradigm’s Head Office compliance team (Technical Helpdesk/File Review Team/Policy Function). Since then David has been made a Partner in the business and currently holds the title of Head of Proposition where he continues to ensure the continued development and delivery of high quality regulatory support to Paradigm firms. David also manages Paradigm Consulting’s third party strategic relationships with providers, fund houses and software suppliers. David is very much an all-rounder with knowledge and experience in many areas, especially compliance rules and their practical application. David Ryder Head of Proposition Graeme Stewart Head of Consultancy A little known fact about David is he was once paid to play football for Wrexham FC and he was also in a band whose support act was Gary Barlow!! Graeme joined the Financial Services industry just after the stock market crash in 1987 and worked as a Broker Consultant. After four years he joined an Independent Financial Advisory firm and quickly started on the Training & Competence side of things. He then moved to a National Network and was soon promoted to Regional Manager. Graeme has been at Paradigm from day 1. His main tasks are in relation to presenting at our CPD events whether that is our Forums, Best Practice online events, Essential Skills Workshops or our Mortgage and Protection events. He also runs the Paradigm supervisor courses. With the continuous change in FCA rules and expectations, as well as the different needs of the attendees, no two courses have ever been the same in 16 years! Graeme loves attending live music events whenever he can. His claim to fame is he did manage once to grab Bev Bevan’s (from The Move and ELO) drumstick as he threw it to the crowd. Despite 6 hands on it, Graeme was not letting go and describes it as “priceless” to him! Matthew Blackburn Consultant (Technical Helpdesk) Matthew has worked in financial services since March 1997. This has included roles in a stockbroker, an insurance company as well as Paradigm. In that time, he has Continued on next page...
20 SPRING MORTGAGE NEWSLETTER have taken orders to buy and sell shares, made alterations to insurance policies, provided new business call centre support to financial advisers, and advised clients on pension switches and transfers. Matthew has been at Paradigm for over fourteen years and helps firms with technical queries. He has been a valuable asset to the policy team particularly with his pension knowledge. Matthew is involved in updating the Compliance manual, issuing Regulatory guides as well as providing technical knowledge. Matthew’s claim to fame is meeting the former French President, François Mitterrand. Although, Matthew was ten at the time and had no idea who he was! Sharon Ardern Consultancy Manager Sharon has 31 years industry experience starting as a cashier then moving into mortgages. Her roles have included being a tied adviser then moving across to the IFA sector carrying out a variety of roles including Paraplanner, Adviser, and Office Manager. More recently, she spent the last 10 years working within SJP Practices as an Operations Director before moving to Paradigm. She has just completed her first anniversary with Paradigm! Sharon works very closely with our firms to offer practical support and guidance by helping to identify the specific areas where assistance is needed. She brings the firm’s perspective to Policy as she manages our file review and consultancy team. Sharon is currently one exam away from Chartered and Fellow with the CII and also holds The Institute of Leadership & Management qualifications. Sharon’s fun fact is her dad used to play football with George Best before he became fully professional! Stuart has been involved in financial services for over twenty five years, having begun his career as an administrator. He’s worked mainly for small IFA practises in a variety of roles including Paraplanner and Adviser. Stuart joined Paradigm as a Technical Helpdesk Consultant in 2012 and then later became the Technical Helpdesk Manager. As well as Helpdesk Manager, Stuart is a pension transfer specialist as well as assisting firms with Direct Authorisation and Variation of Permission applications to the Regulator. Stuart brings his all round technical knowledge, pension knowledge and authorisations experience to the Policy team and is involved in the Policy team meetings as well as writing or advising on our more technical compliance updates. A funny story about Stuart is at the age of 11 he won a form prize in his first year at grammar school and his mother bought a new hat to celebrate!! Stuart said the only other time he gave her cause to buy a hat was his wedding day! We hope you enjoyed this little introduction to the team! Our Regulatory Policy team provide the information you receive through a range of Paradigm Consulting's support, including the compliance manual, compliance updates, technical updates, Target articles, Hot Topics, Technical guides and workshops. If you are not yet subscribing to Paradigm Consulting's services, please get in touch with your Relationship Manager to find out more. Alternatively, you can request a callback here. Stuart Shelton Helpdesk Manager
NEW Threshold Conditions test on our CPD Test Zone Added three Lenders to our Lender panel, including: TAB, The Loans Engine and Penrith Building Society BRAND NEW eBooks: • A Consumer Duty eBook titled "Living under the Duty" • An eBook partnered with Triple Point titled "Tax-efficient Investments" New Consumer Duty episode of Paradigm On Film focussing on the reporting phase Joined the Consumer Duty Alliance as an Affiliate Member! We celebrated International Women's Day! Celebrated 10 Years of Paradigm Protect! NEW Strategic Partner! New Technology Partnership! Our full 2024 Events Calendar is now live. Throughout the year, we will be hosting a range of online and face-to-face events across the country. Thank you for your continued support!
www.paradigm.co.uk/mortgages 0330 053 6061 [email protected]
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