We Introduce You

Following in the growing trend of the retail and non-financial service sectors acting as secured loans introducers, Harvey World Travel is going to start offering secured loans in its shops.

Harvey World, an Australian based group of travel agents, has signed a deal with Promise Finance to offer secured loans and mortgages in its UK stores. Harvey World Travel, who also has a large franchise network, began expansion into the UK in 2004 and in 2005 bought 22 shops from the Wardle Group. The loans will be offered for any purpose and not just holidays.

Harvey World will begin the roll out of the new offerings in some of its larger travel agents in the early part of next year.

Promise Finance has said this is the first of a number of strategic alliances it will be launching in the next six months.

This news follows a remarkable increase in the number of entities now acting as introducers for secured loans. In recent years, companies like the AA, RAC, Sainsburys, Tesco and Asda have signed introducer agreements and offer secured loans branded under their own names.

With the fact that people regularly book their holidays months in advance allied to the comparatively short turn around time for secured loans, this new channel will probably work for Promise.

The main problem I have with it is when advice about a holiday gets mixed and mingled with advice about a financial transaction. In the models mentioned above, the Supermarkets and Breakdown Service companies have no ‘one to one’ interaction with the client and the loans are promoted textually in leaflets and websites.

This new type of sales channel might cause some questions to be asked.

The Regulatory Alliance of Mortgage Packagers (RAMP) is to form a new industry-wide compliance forum.

The new forum, which is aiming to have 12 delegates, is designed to better represent the differing views of all the mortgage industry. It is envisaged that the new group will comprise of four lenders, one packaging alliance (RAMP), two independent packagers, three directly authorised intermediaries and two networks

The new voice piece will be called The Mortgage Compliance Forum and its main purpose will be to engage the FSA and share views before policy decisions are made.

The FSA has said that it wants better industry cooperation, but the problem here is that although the new group will go some way to appeasing the regulator, there is still going to be a disjointed industry because of the number of rival groups to RAMP.

Correct me if I am wrong, but a quick glance around the Internet reveals there are the Professional Mortgage Packagers Alliance (PMPA), the Alliance of Mortgage Packagers and Distributors (AMPD) and the United Packagers Association (UPA) all doing a similar pre forum thing to RAMP and surely they will already have similar plans or their own ideas about compliance.

By either using a Boxing Association or Judean Peoples Front analogy, there just seems to be too many groups.

Perhaps the most bizarre story floating around in recent days is that the public are to be offered the chance to purchase shares in new prisons under a “buy to let” scheme being considered by the Home Office.

With the refusal of the treasury to fund new prisons, the Home Office under John Reid is looking at alternative ways to finance them. Parliament has agreed to 8,000 new places, of which 4,000 are going to come from existing prisons and the remaining ones coming from new prisons.

The proposed buy-to-let model uses “Real Estate Investment Trusts” (Reits) which are to be launched by the Treasury in January and will enjoy tax exemptions that were agreed under a Finance Act this year.

Under the proposed system, the prison operator would rent the facility from the Reit and the income would be channelled back to the investors. Private prison contracts tend to be long-term in Britain, with 25-year leases common.

Its been said that the type of people who will be attracted to the scheme will be ones looking for income rather than growth.

It just seems a little absurd to me and raises more questions than it answers. I know I might be guilty of being a tad silly, but will Lifers get a right to buy? Will investors demand the prisons are kept full to maximise dividend income and what happens if we have a Strangeways?

The new breed of buy-to-let tenant?