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What Top Cat tells us about the UK mortgage market

Picture of Top Cat in Halifax ad

Dr Rob Webb, Associate Professor in Banking at Nottingham University Business School, explores the likely ideas behind The Halifax’s decision to build its latest mortgage-lending campaign around Top Cat.

It might just tell us something about the changing terrain of the UK home-buying landscape.

Who is Top Cat?

Let’s first remind ourselves who Top Cat is. He’s the streetwise leader of a gang of New York moggies. He lives in a back-alley dustbin and spends much of his time courting the wrath of the local constabulary. He’s a loveable rogue – of course – but he’s a hustler and a huckster. His day-to-day routine usually consists of trying to make a quick buck, avoiding arrest, arriving home on the back of a milkfloat just before midnight, draining a bottle of stolen milk, lobbing the empty bottle over the fence, donning his pyjamas and going to sleep.

It’s tough to imagine someone would want such an individual as a neighbour, let alone be prepared to give him a two-year fixed cashback deal at an initial rate of 1.94%. Maybe there’ll be a follow-up ad in which he moves in next to Officer Dibble.

It’s also worth bearing in mind Top Cat’s origins, given that a popular school of thought is that the character was based on Phil Silvers’ Sergeant Bilko, arguably the most determined conman in television history. This theory is supported both by Hanna-Barbera’s tendency to imitate classic sitcoms – The Flintstones was undoubtedly a cartoon version of The Honeymooners, a Bilko contemporary – and by the presence of Maurice Gosfield, who not only played Bilko’s principal stooge, Private Duane Doberman, but also voiced Top Cat’s chief foil, Benny the Ball.

The "human face" of banking

From this feast of TV trivia we might infer that we have as our modern-day mortgage-seeking role model a police-dodging near-itinerant inspired by a barrack-room chancer with a chronic gambling addiction. Is this really the message the Halifax’s marketing machine wanted to convey?

The official line is that Top Cat’s involvement “is a real celebration of how our friendly and down-to-earth colleagues support everyone” and shows Halifax “as the uniquely human face of banking.” The sentiment is noble enough, but it’s unabashed marketing-speak. Applying this vague rule of thumb, the “human face” of Britain’s biggest mortgage lender would be showcased if the applicant were anyone from Donald Duck to Darth Vader.

Perhaps a more likely explanation is that this isn’t a matter of context. The idea might not be for would-be customers to identify with Top Cat simply because, in the very broadest sense, he shares their cash-strapped plight. Instead it could just be that this is more a question of era.

After all, Top Cat is a product of the ’60s. It’s true that the show still occasionally surfaces on the Cartoon Network and was even rescreened by the BBC only a few years ago, but the fact is that it most readily strikes a chord with those of us for whom childhood is a distant memory. If Halifax wants to appeal to first-time buyers in their 20s and 30s – the millennial generation – then why aren’t Ren and Stimpy, He-Man and Skeletor or Beavis and Butthead tugging at that kindly adviser’s heartstrings?

Recent initiatives in the mortgage market offer some clues. Earlier this month, for example, in response to what it described as “the evolving needs of our customers,” Halifax raised its age limit for borrowers to 80, thus making it possible for a 55-year-old to take out a 25-year loan.

Nationwide duly responded by upping its own limit to 85. Henry Jordan, the company’s head of mortgages, spoke of customers who “are often asset-rich, with significant equity in their home, and wish to have the flexibility to borrow against it.”

So are borrowers getting older? Yes and no. Tellingly, Nationwide conceded its new facility could serve “a range of mortgage-borrowing needs.”

The bank of mum and dad

Could this be where our feline friend really fits into the bigger picture? Top Cat’s starring role might not signify that lenders have given up on millennials per se, but it could well hint at a nascent acceptance of how their parents or grandparents are helping fund their home-buying dreams. Does Hanna-Barbera’s finest actually represent some sort of subliminal rallying cry for the so-called “Bank of Mum and Dad”?

Detailed Council of Mortgage Lending (CML)  figures are dispiritingly tricky to obtain – trickier, say, than securing a mortgage if you’re a cat that lives in a bin. If you want to see the nitty-gritty – the percentage of mortgages backed by guarantors, for instance – you have to be a fee-paying member.

Yet such data as the CML makes freely available clearly show the travails of first-time buyers in the years since the financial crisis. In tandem, various surveys, including one recently published by investment broker rplan, have underlined the scale of the home-ownership challenges facing millennials, many of whom fear they might never be able to set foot on the housing ladder without assistance from their families.

Generally speaking, the bottom line is that many millennials have a fair bit of debt and many millennials’ parents (or grandparents) have a fair bit of cash. This is the thinking behind Barclays' Family Springboard mortgage, which allows a customer to buy a home without a borrower deposit if his or her loved ones – and how deeply loved they must be – are able to provide 10% of the property’s price as a security.

Top Cat, you scamp, have you fooled us again after all these years? Are you really just tapping into the generosity of generation X? Beneath that trademark waistcoat and straw boater, are you no more than a pitchman for benevolent baby-boomers? Or have we simply become too cynical in our old, offspring-bankrolling age? It’s hard to say for sure; but it’s certainly something worth getting animated about.

Dr Rob Webb is Associate Professor of Banking and is an expert in financial institution performance.

This article was first published in The Conversation on May 20 2016.

Posted on Tuesday 24th May 2016




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