While the use of technology will reopen the ‘lender versus intermediary’ debate, broker-led technology should win out
I have recently had the pleasure of mixing with lots of brokers at both the Financial Services Expo and the Imla Great Mortgage Debate. It has helped to confirm what I thought was the case anyway: brokers are a resilient lot and care about helping their clients more than anything.
It does not matter where they are from, experiences are the same and the same passion exists – spattered, of course, with the odd moment of gallows humour.
And talking of this humour, the comment I heard most from brokers at these events was along the lines of: “I suppose I’ll be replaced by a robot soon anyway!”
All joking aside, though, this is an area of concern. While the use of technology will reopen the whole ‘lender versus intermediary’ debate, I fully expect broker-led technology to win through. Technology has led consumers to expect more choice and a lender offering its own products cannot provide that.
That said, remortgages will become more of a battleground as technology develops. When a borrower gets a message on their banking app six months prior to expiry of their mortgage, which lets them press a certain button for a certain product with no penalties, that will have an effect. My issue is that some advice needs to be given in some form at that stage. This is where lenders and brokers can easily collaborate.
A combination of technical and human strength provides the best option and this is what I believe will ultimately develop. Customers want a hi-tech, elite service environment that delivers human touchpoints where they want them and does not miss out the important advice bit.
The consumers will be the ones who decide what this looks like – not the lenders and not us. The challenge for brokers is to fully embrace it. Those who do have little to fear.
But while the broker market will undoubtedly look different in five years’ time, intermediaries as such are not going anywhere. This has to be a benefit to consumers, who will continue to demand more choice and better advice.
In the markets, three-month Libor is at 0.38 per cent while swap rates have risen a touch.
- 2-year money is up 0.01% at 0.46%
- 3-year money is up 0.03% at 0.48%
- 5-year money is up 0.09% at 0.60%
- 10-year money is up 0.19% at 0.93%
In the weird and wonderful world of lenders (and of particular relevance following the point above), Santander has launched its end-to-end remortgage process for customers applying directly online.
This is an interesting move and gives rise to the all-important question: where is the advice? And so it begins…
A big ‘ey-up’ to Leeds, which has improved its interest-only criteria by increasing the available LTV from 50 per cent to 60 per cent.
Coventry, meanwhile, has raised its maximum age for buy-to-let investors from 75 to 85.
Nationwide, TSB and Virgin have all continued to cut rates, which helps make the market even more competitive. Tesco Bank has reduced rates on its five-year fixed 90 per cent LTV products, which are now available from 3.14 per cent, while Halifax has reduced rates on five-year fixed first-time buyer products by 0.25 per cent.
Accord has a 10-year fix up to 75 per cent LTV priced at 2.88 per cent with a fee of £845, adding to the longer-term fix stable of products now around. It has also made rate cuts across 75 per cent and 85 per cent LTV mortgages, with a two-year fix now available at 1.39 per cent with a £845 fee.
Good old Aldermore has reduced its limited edition five-year fix for buy-to-lets, now available from just 2.99 per cent with a 1.5 per cent fee up to 70 per cent LTV.
Elsewhere, The Mortgage Works needs to see the onward address on a let-to-buy arrangement, and insists the same solicitor deals with both transactions, which is fair enough. Meanwhile, the rather good Axis Bank will now lend in the whole of England and southern Wales and has increased its minimum loan size to £100,000.
Finally, Precise has reduced a swathe of rates and introduced a 10-year fix at 3.99 per cent for limited companies and HMOs. It will also consider HMOs up to 80 per cent LTV.
Andrew Montlake is director at Coreco