A sales director seeking a studio flat is comparing shared ownership with an outright purchase.
This week the shopper visits Kensington. He wants to buy a studio costing around £500,000, but only has a £15,000 deposit. As a first-time buyer, the shopper needs a little extra saved on top of his deposit to cover stamp duty. His annual salary is £65,000 and he is considering whether to opt for shared ownership instead.
Each week the mystery shopper seeks advice from independent advisers in the UK.
The aim is to find out whether advisers are delivering the goods when it comes to the all-important initial telephone contact between client and adviser. It is only intended to evaluate this first interview, and it is understood that further meetings would be necessary before final decisions could be made. The purpose is not to expose poor selling practices, but to show constructively any weaknesses in the advice process.
Adviser: Opes Financial Partners (Independent)
Address: 167-169 Kensington High Street, W8 6SH
Speed of response: Three rings, receptionist transferred to adviser, adviser answered after five rings. 2.35pm 4/5
Telephone manner: Friendly, open and professional 5/5
Relevant qualifications: CeMap 5/5
Payment method: £350 flat fee 3/5
Guidance given: The adviser provided insightful information on the mortgage rates that tend to be available with higher deposits, relative to the property values in London the shopper was looking at. The shopper was urged to consider this along with income multiples that lenders lend against when purchasing outright.
The adviser also outlined how shared ownership schemes impact lenders’ criteria and decisions. 4/5
Knowledge: The adviser had good knowledge on product ranges for first-time buyers, alongside the product features that tend to be available with deposits of more than 15 to 30 per cent. However, the shopper would have liked much more information on how and what to research on shared ownership schemes. 3/5
Email/web presence: greg.bryant@opesfp.com www.opesfp.com 5/5
Verdict: The adviser had sufficient basic knowledge to help the shopper in the first instance, though lacked the wider, more comprehensive experience in shared ownership schemes that other advisers displayed.
Total score/35:
29/35
Adviser: Alex De Silva & Co (Independent)
Address: 158 Buckingham Palace Road, Belgravia, SW1W 9TR
Speed of response: Time of call: 11.03am. Answered in two calls, straight through to adviser. 5/5
Telephone manner: Friendly, open and professional. 5/5
Relevant qualifications: Mortgage adviser (CeMap) 5/5
Payment method: £595 flat fee. 3/5
Guidance given: The adviser explained that the shopper could access better mortgage rates if he could save for or afford a larger deposit.
He warned that certain lenders will lend only against studios of a minimum size, such as 30 sq ft or 30 sq metres. Examples of income multiples lenders use were given, and factors included in affordability criteria.
The adviser explained how first-time buyers have used shared ownership and how products like the Lifetime Isa could be used with this option. 5/5
Knowledge: The adviser had a wealth of knowledge on lending criteria for the shopper’s circumstances, among different lenders, alongside practical examples of how shared ownership had worked well for clients. 5/5
Email/web presence: www.alexdesilvaco.com jonathan@alexdesilvaco.com 5/5
Verdict, Shopper's choice:
While the fees were highest of the four, Alex De Silva & Co is perhaps reassuringly expensive. The adviser gave the most comprehensive information for the shopper to consider.
Total score/35:
33/35
Adviser: Charles Wade Finance (Independent)
Address: Sydney House, Woodstock Road, W4 1DP
Speed of response: Three rings, adviser answered direct. 12.26pm 5/5
Telephone manner: Professional and to the point. 4/5
Relevant qualifications: Fully qualified IFA 5/5
Payment method: No fee, paid only by commission from lender. 5/5
Guidance given: As one of the starting points, the adviser recommended the shopper to check Santander’s Mortgage Calculator to get an idea from at least one lender. He also gave initial guidance on the ongoing costs of shared ownership the shopper would need to be aware of. 3/5
Knowledge:
The adviser had sound knowledge of the lenders whose criteria for shared ownership properties would suit the shopper. He also advised how the Help to Buy Isa could provide a leg-up. 4/5
Email/web presence: www.charleswadefinance.co.uk charlie@cwf.uk.com 5/5
Verdict: The adviser recommended research tools and identified lenders with a strong track record of lending to first-time buyers in shared ownership schemes. The shopper would, however, have liked more information on initiatives for first-time buyers.
Total score/35:
31/35
Adviser: DWM Mortgages (Independent)
(Head office of parent company, Lifetime Wealth) 28 Victoria Street, Paignton, Devon, TQ4 5DN
Speed of response: Time of call: 11.46am. Shopper was told the adviser would call back in hour. After 90 minutes elapsed with no call, shopper called again. 3/5
Telephone manner: Professional and courteous. 4/5
Relevant qualifications: CII 5/5
Payment method: No fee for mortgages over £300,000. Below this threshold, fees charged on sliding scale, for example, £295 fee for mortgages between £200,000 and £250,000. 3/5
Guidance given: The adviser explained the borrower should be aware that outstanding student loan and credit card debts could be factored into affordability checks by mortgage lenders. On shared ownership, the adviser said the shopper would have to consider the ground rent, standard rent and service charges, and that this option is dependent on properties available via housing associations. 4/5
Knowledge: The adviser had good knowledge of the deposit level the shopper needed for better mortgage rates and full costs involved in shared ownership. 4/5
Email/web presence: natalie@dwmmortgages.com www.dwmmortgages.com 5/5
Verdict: The adviser provided useful information about costs and ongoing expenses that should be considered. However, extra information on the buying outright option would have been more helpful.
Total score/35:
28/38
