Boss plunges into turmoil of UK mortgage market

Jul 3 2008 by Andrew Mernin, The Journal

A NEW online firm which aims to cut red tape in the mortgage business expects to create 40 jobs in the next 12 months despite market turmoil.

Stockton firm Reflex Mortgage Solutions, set up by entrepreneur Ian Davison, is going for rapid growth despite uncertainty in the housing market.

The company intends to reduce the paperwork in mortgage claims and cut procedure time, using various streamlining measures.

The business, built around a website designed by Middlesbrough tech firm Calm Asylum, will allow users to apply online for advice documents, calculate their potential loan and repayment amount and apply for a loan.

Despite the credit crunch impact in the UK – which caused mortgage approvals for house purchases to slump to a record low last May – Mr Davison is confident the firm can hit its targets.

In its first 12 months the company expects to process more than 600 mortgages, which will result in about £90m in revenue placed to lenders.

He expects to create 40 jobs, ranging from admin roles to management at its Preston Farm headquarters .

He said: “When the mortgage business starts to grow on from there, we will create more jobs. To be quite honest, the mortgage side is going quite well. I’ve got a large portfolio of my own, I know finance and I know the market.

“We are taking this opportunity while the market is quiet to launch to test the market.” Mr Davison, who has personal yearly mortgage repayments totalling more than £360,000 for his properties, did research to uncover a mortgage snagging list before launching his business.

He believes this, coupled with the time it can take to find the right mortgage, can make or break the success of an application, meaning customers often miss out on their dream home or investment. He said: “While my circumstances are very specific and rather unusual, I have acquired a level of knowledge that enabled me to understand how the pitfalls can be avoided.”

According to Bank of England figures, 42,000 mortgage loans were approved for people moving house last May, 28% below April’s level and 64% down on the same month in 2007.