Funny old thing isn’t it? Life, I mean. Just when you are not expecting it, something or someone turns up and you are suddenly taken back to another life – another period in your life – and you gain a certain perspective on then and now.
What on earth is he talking about, I hear you say? As usual, I will try and explain.
Last weekend I was the guest of a very well known mortgage industry company celebrating 15 years trading – and very successful trading too. Unfortunately, this clashed with the FA Cup Final and, knowing what a keen Red I am (well, maybe not just for me), they had laid on a complimentary bar and buffet and a large screen to watch the match. Well, we all know the result at the end of penalties. So I was therefore going into dinner in a very happy state of mind when I was accosted by a very dapper gentleman, who told me his name was Rob Owen of the London Mortgage Company, but that in an earlier life he had been Rob Owen of the Burnley Building Society and that he and I had done business together in Liverpool some 25 years ago. Of course, my not-so-agile memory started rewinding and he and I talked happily for some time about times past. This was indeed another lifetime and it is fascinating to compare our business lives from then to now to see how different they are.
The good (bad) old days
As Rob reminded me, those were the days when building societies actually lent their own money and, as a result of that, mortgages were in very short supply, We can all probably remember the bad (or was it good?) old days of 12 per cent interest rate. But how many of us can remember having to tap up building society managers for a loan for a client who had missed one mortgage payment? There’s not many people I would go down on bended knees for (I probably couldn’t now anyway) but a building society manager with access to mortgage funds – yes, that was a man (I think there were only men in those days) who deserved a degree of genuflexion. You may also remember at that time that building societies didn’t generally lend on houses pre-1920, or those with attics or cellars, so making sure that the house fitted into strict and unbending criteria was very much a black magic art.
Of course, things were also simpler by virtue of the restrictions put on lending by the societies. 100 per cent mortgages were unheard of (morally indefensible) and there were only really two products – either a repayment or an endowment mortgage. That was it. That was also the era of the back-street mortgage broker, who prospered in those restrictive times and who could do very well, particularly if the client was in difficulty with their payments, as there was no Kensington or Mortgages plc to go to.
A simpler time?
Were they happy days? Well things were simpler in those days, although we didn’t necessarily know it then. We still worked hard, although not as hard as we work today. Clients were a lot more tolerant and would accept the advice of their professional adviser (a good and bad thing). All-in-all, nothing seemed quite as serious in those days.
Compare then today’s frantic mortgage industry. Not only do we have some 7,000 mortgage products with more lenders than ever, but an ever increasing competitive market, meaning that pretty much any mortgage is available for anyone. A number of mortgage intermediaries lend solely and collectively more finance than the old style building societies, and the back-street mortgage broker is a relic of the past – now regulated up to the hilt by the Financial Services Authority (FSA). The cost of acquisition of new clients grows ever more expensive and it doesn’t seem as it will get any easier – just much, much harder.
Of course with every threat there is generally an opportunity and, as with the legal profession, forward-thinking and progressive figures, like my friend Rob Owen, will continue to prosper and long may they do so. But I wonder, if we knew then what we know now, would we have done things differently Rob?
Now, where did I put the key to the Tardis?
