As Halifax remains the one to beat in our quarterly survey, some lenders have made huge strides in performance while others have plummeted
The past quarter for lenders has been like a game of Snakes & Ladders, with some experiencing their biggest climb or slide to date.
Our panel of critics has rated lenders purely on residential mortgage business throughout November, December and January. The scores cover not just the panel members’ own experience but that of colleagues and other advisers in their firm.
So which lenders’ strategies have helped them ascend our ratings ladder, and which lenders have slid in the opposite direction?
Once again the top spot belongs to Halifax Intermediaries. Perception Finance managing director David Sheppard says the lender continues to provide excellent service and an easy-to-use online system.
He warns, however: “It could start to lose some market share on purchase business as more and more lenders offer free valuations.”
TenetLime managing director Gemma Harle says Halifax’s underwriting on the spot means that, subject to valuation, “cases are going to offer and it’s well worth holding on the phone for”.
It is one of the best lenders for processing, she adds, but its system often generates “unnecessarily repetitive credit searches.”
Chadney Bulgin mortgage partner Jonathan Clark says Halifax’s product transfer rates continue to lag behind those of the competition. However, “in all other respects, it’s still the lender to beat”.
Meanwhile, Alexander Hall technical director Richard Merrett praises the lender for removing its £295 mortgage account fee, which he says was “confusing for many customers”.
Coventry’s service score has helped it leap four places up the ladder.
“A top score for Coventry for service this quarter because all the cases we did were offered in eight calendar days or less,” says Sheppard.
London & Country associate director of communications David Hollingworth thinks the lender has injected more energy into its fixed rates.
“It has a very strong offering in both the five- and 10-year fixed-rate market,” he says.
TenetLime members feel Coventry has “easy-to-use systems and consistently good service levels”. They also praised its good BDM support and its willingness to consider policy exceptions.
“Unlike some of its counterparts, Coventry’s all-round flexibility marks it as a lender that actively looks for reasons to lend, as opposed to why not to lend,” says Harle.
Riach Financial Advisers mortgage broker Bob Riach adds: “Coventry has enhanced its online application recently and it is a big improvement.”
Santander for Intermediaries
Santander has climbed the ladder by one place this quarter, with panellists welcoming its recent move to pay a proc fee for retention business.
Harle calls this “great news for the intermediary sector” and says she anticipates an upturn in Santander’s business. However, members feel it can be “obtuse” when underwriting anything a bit out of the ordinary.
Personal Touch Financial Services mortgage proposition manager Victoria Jefferies says: “News of a retention proc fee is incredibly welcome. This has gone down well with advisers and will work in Santander’s favour.”
Hollingworth thinks the lender is doing a lot right and has some impressive processing times. “Products don’t always hit as hard as those of some of its peers but the incentives and service ensure popularity with homebuyers,” he adds.
Clark’s only complaint, meanwhile, is of Santander’s “lack of BDM coverage”.
Virgin Money finishes in joint-fourth position this time, making a downward slide of two places.
Clark says: “Virgin Money’s products have slipped down the best-buy tables but it continues to appeal to brokers with its generous affordability and improved turnaround times.”
Sheppard says the lender is strong on service but he warns that, like Halifax, it should be looking at its valuation costs. “This may be a factor in who gets the business, with rates being so close in the market.”
MoneyQuest Mortgage Brokers director Rob Clifford says Virgin has received some “very positive feedback with regard to its BDMs”.
However, advisers feel the lender’s rates have risen slightly and its website could be improved.
“It has no facility to copy and paste,” he adds.
Woolwich has had an impressive quarter, climbing from seventh to fourth position.
Hollingworth says the lender continues to do well on the ‘three Rs’: remortgage, retention and reliability.
“Incentives keep remortgage business bubbling and the Great Escape deals remain a good option on smaller mortgages,” he says.
John Charcol products technical manager Simon Collins says Woolwich is always consistent with its products, service and BDM support, which “makes it a very popular lender”.
Clifford reports “very positive” comments from brokers about the lender’s BDM support.
However, other panel members have been less impressed. Harle calls Woolwich’s approach “somewhat antiquated”, with long-winded procedures at times.
“If it could get its systems right and review its affordability criteria, it would be a very impressive lender,” she says.
RBS – NatWest Intermediary Solutions
Falling four places to sixth this quarter is NatWest Intermediary Solutions.
“NatWest still enjoys a good market share but its products need an overhaul,” says Clark. “Where’s the promised innovation?”
Merrett thinks the lender has had a positive start to the year with some good tweaks to its criteria and service proposition. But he adds: “It remains conspicuous through its absence of a committed retention strategy.”
Harle says the lender is attracting acclaim in some quarters for its BDM support and is generally regarded as a “steady” option by advisers.
“We have received good reports on its ability to income stretch where appropriate, and it is often prepared to consider cases that are outside its normal policy parameters,” she says. “It is also rated highly for complex prime.”
Jefferies adds: “Our members really value NatWest’s BDM teams, whether face to face or over the phone.”
YBS (Accord Mortgages)
Accord continues to make steady progress up the ratings table, advancing by another rung to seventh position.
“It seems this particular leopard has changed its spots,” says Harle. “Systems and processes are so quick now.”
She says the lender has had noticeably better service levels, and has dedicated underwriters. “All of which is convenient compensation for its current lack of competitiveness on rates, where it used to be among the best.”
Clark says: “Accord appears to be changing tack and letting its rates slip slightly from the top spots, instead concentrating on improved service and underwriting flexibility.”
Merrett adds: “2016 brought a host of improvements from Accord, which has seen it recoup some of the lost London market share. These positive changes, including some great touches like the customer welcome pack and the appointment of a new London BDM, mean it looks set to be a strong contender in 2017.”
Nationwide for Intermediaries
Nationwide for Intermediaries has gained some ground this quarter, ascending one rung on the ladder to eighth position. Hollingworth says it is delivering on its claim of being a lender to support the first-time buyer market.
“It continued to attract a strong cohort of first-time buyers last quarter, with typically well-priced products and incentive package,” he says.
Riach thinks the lender has “one of the best” BDMs, who is “very helpful and tries to resolve issues”.
Jefferies says Nationwide’s service is improving. “There has been a marked reduction in service complaints through the network,” she says.
Clark adds: “Nationwide says it is now serious about lending to contractors, so it will be interesting to see if it lives up to brokers’ expectations.”
TSB Bank has fallen dramatically this quarter, by five places to ninth in the ratings.
“TSB has dropped off rate-wise of late, which is a shame as it is a lender we like using,” says Sheppard. “It has started to tweak criteria and in most cases this seems to be making it harder to do business with it,” he adds.
However, according to Hollingworth the lender continues to show it can price well and meet high expectations on service – month in, month out.
“TSB has had a successful quarter from a remortgage point of view and showed that there is a place for three-year fixed rates,” he says.
Riach thinks TSB’s criteria are not as flexible as they used to be, but adds: “When a client fits its criteria, it usually issues an offer very fast – normally within a week.”
Clydesdale stays anchored in tenth position when this quarter’s Wild Card score is disregarded.
Hollingworth thinks it is difficult to compare Clydesdale directly with some other lenders in the top 10.
“Much of its strength centres on being different and able to consider the types of case that others wouldn’t,” he says.
Trinity Financial product and communications manager Aaron Strutt says Clydesdale is a good lender and has some great criteria. However, “our brokers think processing is an issue at the moment”, he adds.
Collins, meanwhile, says: “Its service and BDM support mean it’s always in the mix when we’re looking at placing cases.”
Although our poll does not take account of lenders’ buy-to-let business, Merrett says: “It should be noted that Clydesdale has the best overall proposition in this area by some margin.
“Its can-do attitude in this increasingly challenging area enhances its standing in the competitive residential market.”
Leaps and bounds
This quarter has been unusual with large shifts occurring in various lenders’ scores; some have leapt several rungs up the ratings ladder while others have slipped a long way down.
The panel has bestowed praise for innovative products and improved turnaround times.
But sometimes the standards of service and support received by brokers seem to be based simply on the luck of the dice.