AToM: Family Rates for 25 Years
Published on 3rd September 2016
“It’s so frustrating. People will spend all day shopping around to save £20 on a new fridge, then tell everyone about the great deal they found. Yet they won’t put aside a couple of hours to save £4,000 a year on their mortgage. It’s crazy!’
Those are the thoughts of Dale Jannels, director at AToM (All Types of Mortgages) in Horsham, which is celebrating its 25th anniversary this year.
It’s been a rollercoaster ride, with huge growth in the 1990’s followed by the troubles of the 2008 financial crash. Some things though, haven’t changed. The business was founded by Victor Jannels, and now sons Dale and Neal are directors in a business that has enjoyed remarkable success in a challenging industry.
We discussed the ups and downs of business with Vic and Dale. Whilst that may not sound as enticing as some of our features, it might well be the only one that saves you money!
How did AToM come about?
Vic: I worked in banking until 1986 before launching a financial services company in Horsham. At the beginning of the 1990’s, I could see that a new breed of mortgage company was gaining a foothold in the industry, so I sold my interest in that business. In 1991, I moved my children out of the playroom at home and AToM was born.
Dale: I joined in 1999 after working at Legal & General for five years. I was training to be an accountant but having had mortgages thrown at me from every angle since I was young, I joined the family business.
Vic: Initially, I ran AToM alone but couldn’t have done so without my wife, Sheila, who is still Financial Director. Over the next few years, business increased far more than we anticipated, so we moved to bigger offices in North Street. By 2006, we employed 90 people and were turning over more business than some small building societies. It was a wonderful time; the whole market was booming.
That changed with the crash of 2008 though?
Vic: It did, but fortunately we were prepared for it. At that time, we were also shareholders in a very good mortgage lender called Unity Homeloans, funded by Investec. The chief economist at Investec predicted a market crash and made the bold move to stop lending.
Dale: We took some grief about that at the time, because the market was still in an upward spiral and some felt we’d made the wrong call. A few months later, Northern Rock hit the wall and the market disintegrated.
Vic: We did well, as we honoured every mortgage offer that had been made. That wasn’t true of a lot of lenders who fell by the wayside. It was a tough time for us though, as we had to reduce staff. We went into what we all thought would be a two year recession. It turned out to be eight years. We moved to our current base in the Carfax in 2009.
So what does AToM do?
Dale: We have two main arms to the business. The first is that we offer mortgages to individuals who walk through the front door. That may be anyone from an 18-year-old first time buyer with a deposit from the bank of mum and dad, to a 94-year-old.
And the second arm?
Dale: The second arm is broker - based work. What that means is that lenders come up with a range of mortgage products and they distribute them through us. They do that because, as brokers, we do all of the work for them. We advertise the lender’s products, handle the applications, go through pay slips, bank statements and credit reports, and underwrite the mortgage. It saves a lot of work for the lender.
Vic: Most lenders don’t want a high street presence. There are bills and staffing costs, and lenders have to go through all of the regulatory requirements. It’s incredibly expensive, so it’s better to choose half a dozen brokers as a partner, and let them do the preparation work.
Why choose AToM as one of those partners?
Dale: We have a sound reputation in the industry. We were awarded five stars at the Financial Adviser Service Awards and we’ve twice won at the Mortgage Strategy Awards, considered to be the Oscars of our industry. Dad was awarded a Lifetime Achievement Award in 2012 and we’ve been named Best Mortgage Packager too.
Vic: Dale has also won the Business Leader category at the British Mortgages Awards in 2010 and was runner-up this year. I’ve always considered that this company has punched well above its weight. To be consistently short-listed for top prizes as an independent, family - run business is fantastic.
Why would people go to AToM rather than the high street banks?
Dale: The main reasons are that we can be faster and will probably find a better deal. When you visit a High Street bank or building society, you normally have to wait a couple of weeks for an appointment with a mortgage advisor, as they tend to cover several different branches. Then you have to sit through a two-hour interview. If you want to shop around for a good deal, you might go through that same interview at several different places. Of course, most banks and building societies have pretty standard mortgage products too. If you come to AToM, there’s just one interview and we have access to 11,000 mortgages from across the entire market place, so we will source the best deals for you. Because we deal with everyone, our customers can see options from Santander, Halifax, Nationwide, The Derbyshire, The Dudley or even the Stafford Railway Building Society!
People can also go through their estate agent?
Dale: Some estate agents have mortgage advisors in-house. They will say, ‘If you’re putting in an offer on this property then speak to our mortgage advisor.’ Some buyers feel obliged to do that, but they are limiting their options massively.
Vic: If you are in a rush to buy a property, AToM can make the difference. Leading mortgage lenders are placing experienced people in our Horsham office, so if a customer comes in needing something out of the ordinary, we can go to the lenders and say ‘Can we do this deal?’ Also, having on-site underwriters gives us the competitive advantage.
With 11,000 mortgage products, how do you keep so many lenders happy?
Dale: We don’t work with all of the lenders that approach us. Lenders have to come to us with something that’s a little bit different. We don’t want lenders to come in with a deal that is just going to take away business from other lenders we have a good relationship with.
Vic: Sometimes, lenders will ask us what the market needs, as we can identify gaps in the market. We’ve seen a huge range of buy-to-let and multi-occupancy mortgages become available in recent years.
Dale: We’re seeing more people looking for multiple occupation deals, because that’s where they get the best rental income. If you went to a high street bank and said ‘I want to buy a house with five occupants on five different rental agreements,’ then they will back away. We work with lenders who specialise in precisely that, to try and find the most appropriate product to suit the customer’s needs.
Is it hard to convince people to discuss their mortgage?
Dale: Sadly, people think it’s a hassle to arrange a mortgage, but it’s not; it’s so easy. So what happens is that 70% of people carry on paying their mortgage on a Standard Variable Rate (SVR) after their Fixed Rate period has finished. They will fight for a discount on their phone tariff or Sky TV deal, and yet spend thousands more than they need to every year on their mortgage.
Vic: Mortgage lenders rely on inertia; people coming to the end of a two or three-year tracker rate and not doing anything. If you have a £200,000 mortgage and are now on the SVR, there’s a good chance that you could be on a mortgage which is 2% lower. That equates to about £4,000 a year. People always say ‘I’ll sort it out soon.’ But they don’t. That £4,000 could pay all of your utility bills, your holiday, or even your child’s education for a year. Over the life of the mortgage, it’s a huge saving, so please, get it done!
Dale: Of course, lenders out there who have people on the SVR are making money on these mortgages. They’re not going to write to the client and say ‘Guess what? You can have this fantastic new rate!’ In an ideal world, they would, but people have to make that move themselves.
Can you help them do that?
Dale: We have always built a long-term relationship with our customers, and prevent them from going on to the lender’s Standard Variable Rate if there are better options available to them. We do our best for everyone. That is why we are 25-years-young; it’s been our ethos to help our clients save money in the long term.
Dale: People are fearful of the cost involved in arranging a mortgage. They call and check that there isn’t a fee for a consultation – there isn’t – and things like that. We have one fixed fee, once the mortgage offer is in place, and we will save you money, often significant sums, over the course of your mortgage term. But we still have to get people through the door to do that.
What sort of deals are available at the moment?
Vic: At the moment, we’re seeing rates lower than I’ve seen in my entire mortgage career, especially since the base rate fell to .25%. One lender recently launched a 10-year fixed rate at 2.2%. So if you know what you’re going to do for the next decade, snap it up!
Dale: There are a lot of Tracker Rates available at the moment and lenders are probably losing money on those in the short term, in the hope they can get market share! We are also seeing plenty of new lenders launching products and deals, as well as old lenders coming to the market again, because there is money in this world again. There’s more optimism.
How is the market here in the Horsham District?
Dale: House prices are of course high in Horsham and they’ll continue to rise as there’s not enough supply to meet demand. That is actually starting to cause problems with mortgage deals. If you’ve got three or four people going for the same property, it will inevitably sell above market value. If it’s priced at £300,000, it’ll probably sell for £320,000 - £330,000 because people are played off against each other by estate agents. However, the mortgage lender will only cover for what the property is valued at. So. in some instances, we’re seeing people having to find £20-£30,000 to plug the gap as the lenders valuer has down-valued the property and the lender will only lend on their confirmed value.
What does the future hold for the business?
Dale: AToM is looking to expand. We’ve got two offices in Horsham with about 30 people, and we may see more qualified individuals coming on board on the general public side of the business.
Vic: People in Horsham now see Dale as the figurehead of the business, as they read his columns in AAH and the County Times and he’s often at his office in the Carfax. I’m happy with that. Neal takes care of all I.T matters and is heavily involved as a Director too, but I am looking to step back a bit.
Dale: He has said that for the last 10 years!
Are the most challenging years behind AToM now?
Dale: We’ve seen two lots of new regulation, the biggest of which was in 2014; the Mortgage Market Review. This effectively changed everything as it meant that anybody who gave mortgage advice had to be properly qualified. We saw a lot of the banks and building societies lose in-house advisors, which was good for leading brokers and packagers, of which we are one. This year, we saw even more new regulations from the EU. Now of course we have exited Europe, so we’ll wait and see if they are maintained. So there’s a lot to keep on top of, but essentially the service we offer remains the same. We like to build a relationship with the customer and do our best. That is why we are 25 years young.
Can it be difficult to work so closely as a family?
Vic: There are four of us who are directors; Myself and Sheila, Dale and Neal. We don’t always agree, but we accept that if we were four unrelated people on any board, we also would not always agree, so there’s no real difference. We debate and come to the conclusion about what is best for the business.
Dale: My wife, Catherine and Neal’s wife, Carolyn, both work for the business too, so it’s a real family-orientated company. It does have its ups and downs, but we’ve made the best of working together. Some people think it would be a nightmare to work with their entire family, but we have meetings over Sunday roast and whatever decisions have been made, we move forward together.
Visit AToM at 24 Carfax, Horsham or visit the website at www.atomltd.co.uk