As Halifax retains the top spot in Mortgage Strategy’s latest quarterly lender survey, service and products were the main areas of improvement across the board
Lenders may be wary amid renewed uncertainty – emanating this time from the US – but during the past quarter they went the extra mile with both service and products, according to the latest Mortgage Strategy survey.
TSB Bank recently overtook Skipton Building Society in the Council of Mortgage Lenders’ largest lenders table, which means TSB has replaced Skipton on our own leader board.
As with previous surveys, our critics have rated lenders based only on their residential mortgage business, assigning each a score from zero to 10 across the various categories. Scores reflect not just panellists’ own experience but that of colleagues in their firms.
So which lenders put in the effort during the past three months, and which did our panel find wanting?
- Simon Collins: Products technical manager, John Charcol
- David Hollingworth: Associate director of communications, London & Country
- Gemma Harle: Managing director, TenetLime
- Richard Merrett: Technical director, Alexander Hall
- Aaron Strutt: Product and communications manager, Trinity Financial
- Bob Riach: Mortgage broker, Riach Financial Advisers
- David Sheppard: Managing director, Perception Finance
- Rob Clifford: Director, MoneyQuest Mortgage Brokers
- Jonathan Clark: Mortgage partner, Chadney Bulgin
- Victoria Jefferies: Mortgage proposition manager, Personal Touch Financial Services
Once again, Halifax tops the table. Alexander Hall technical director Richard Merrett says it was the “strongest lender this quarter by a distance”, his only criticism being the “high cost” of valuations.
London & Country associate director of communications David Hollingworth says Halifax’s first-time buyer cashback incentives have proved popular with advisers and clients alike, while Trinity Financial product and communications manager Aaron Strutt thinks Halifax Premier’s case ownership “is particularly good at the moment”, adding: “We even had an offer produced in three days.”
Perception Finance managing director David Sheppard thinks Halifax has been a very good source of two-year fixes but needs to improve its longer-term fixed-rate options.
However, Chadney Bulgin mortgage partner Jonathan Clark says the lender’s product transfer rates are “uncompetitive in the current market”.
RBS – NatWest Intermediary Solutions
RBS climbed two places this quarter, drawing level with Virgin Money in joint-second spot.
Merrett is impressed by RBS’s addition of a telephone BDM. “In such a competitive market, I remain amazed that not every lender does this for firms where their business volumes warrant it,” he says.
For Strutt, meanwhile, it is “hard to believe the bank can still reduce rates by such large margins”.
Hollingworth says: “A solid range across the board enhanced by attractive broker exclusives saw NatWest put in a very impressive quarter.”
However, TenetLime managing director Gemma Harle says: “The live-chat facility has received a mixed reception among our members – especially when they are trying to explain a difficult case.
“Nevertheless, it scores a very big plus on affordability as, unlike virtually every other lender, it does not factor in childcare costs.”
Virgin Money retains its position in second place, albeit jointly with RBS.
MoneyQuest Mortgage Brokers director Rob Clifford calls Virgin’s processing timescales “brilliant” and says brokers rarely encounter problems with underwriting.
Meanwhile, Strutt says: “The service guarantee is a great option and helps to reassure clients if they need a fast mortgage offer.”
Clark says Virgin continues to do everything required of it by the broker community, yet somehow “fails to capture a commensurate share of the market.”
Perhaps the lender’s online system is one reason for this.
Sheppard explains: “In the past quarter, Virgin has started to roll out its online system via a website rather than as standalone desktop software and this has not been a success, in my opinion.
“To look to bring something online, it should have been sufficiently tested in advance. The fact that it has issues is a shame.”
Santander for Intermediaries
Santander has risen one place from fifth to joint fourth based on our panel’s scores.
Merrett believes, given high application volumes, its speed of service is remarkable.
He adds: “Sharpened rates combined with flexible criteria and generous affordability mean that Santander remains a popular choice for advisers, although we’ve noticed enhanced levels of scrutiny at the underwriting stage recently.”
Sheppard, however, has not been impressed by Santander’s affordability calculations over the past three months.
“Internally, we get different numbers post application than we expected,” he says.
“When the amount the client wants to borrow is close to the top end of the affordability calculation, I always fear that the case may be a struggle.”
Harle describes Santander as a “steady ship, with good products and good BDM support”. But, like Sheppard, she says members are frustrated with its affordability calculator and its “not too broker-friendly retention policy”.
Meanwhile, Personal Touch Financial Services mortgage proposition manager Victoria Jefferies says: “Some of the tactics deployed by Santander for retaining customers directly have made advisers question its commitment to the intermediary market.”
Making its debut in our lender table, TSB Bank has captured a creditable joint-fourth position.
Clark says: “I hear only good things about TSB from my colleagues.”
Sheppard says: “Its service is very good and supported by a good BDM for us. It would be great to see it push on from here to attract more business”
In Harle’s opinion, despite its broad approach to lending, TSB is still struggling to disassociate and differentiate itself from Halifax.
However, she adds: “The lender offers a soft footprint at the ‘decision in principle’ stage and direct access to underwriters, which brokers are commenting very favourably on.”
Clifford says TSB’s introduction of a document upload system in place of a fax machine has “vastly improved turnaround times”.
Coventry is a non-mover this quarter, remaining in sixth position.
Clark says the lender’s consistent service standards still find favour with brokers, along with innovative products such as its five-year fixed rate with no ERCs.
Mortgage broker Bob Riach of Riach Financial Advisers also commends Coventry for “market-leading fixed rates”, as well as the “big improvement” in its online application process.However, it can be “very strict” with underwriting.
Harle says the lender is popular with members because of its lack of dual pricing and its good advance-notice periods for product withdrawals.
“Coventry is also becoming a go-to for self-employed business, because it takes account of operating profit in its calculations,” she says. “However, it is let down by low income multiples.”
And Sheppard adds: “Coventry takes into consideration a lot of outgoings that other lenders ignore, which means it is unable to lend as much as others.”
Barclays has declined the most in our table, falling from third to seventh place. Nevertheless, the majority of the panel judged the lender to have had a good quarter.
Hollingworth thinks its remortgage and retention business cannot be faulted, nor its strength in supporting higher-net-worth borrowers.
“Good BDM support helps to underline confidence in using Barclays,” he adds.
Merrett says the lender’s criteria and service are excellent, and its recent waiver of valuation fees was a nice touch. But it is “still crying out for the new application system to land, and this remains its one real weakness”.
Clifford says there can be access problems when Barclays sends updates via secure email, and solicitors can be difficult to contact because of high call volumes.
Harle, meanwhile, is pleased the lender has responded to criticism of its overseas-based call centre and “seems to be switching support back to the UK”.
Although she thinks Barclays’ systems are sometimes inflexible and says it can be difficult to save one’s progress on an application, she adds: “It is establishing a niche reputation for lending criteria, particularly for joint borrower/sole proprietor schemes.”
YBS (Accord Mortgages)
Accord Mortgages gained two places this quarter, rising to eighth in our table.
Strutt thinks its service continues to improve. “Our brokers are increasingly happy to use it,” he says. “We had an offer in eight days and it is really quick answering the phone.”
Hollingworth agrees. “Accord’s service is much improved, which is great to see,” he says.
And Sheppard adds: “Accord has worked hard on improving its proposition to brokers, especially its affordability calculator for those on higher salaries.”
Clifford think’s Accord’s service, in general, is good, but adds: “Various members of staff seem to be responsible for the same cases, so we can, on occasion, get several calls on the same day from different people asking for the same requirements.”
Nationwide for Intermediaries
Nationwide has drifted down one place to ninth this quarter.
Clark says the lender continues to win business by lending on very generous income multiples – up to age 75, where appropriate.
Harle thinks Nationwide offers “good products with attractive multiples and a good use of bonus/commission in its calculations”.
But sometimes applications are “negated by underwriting difficulties and puzzling rules around deposits”.
She adds that Nationwide’s workflow process queue often means that several staff members review the same case, which can result in delays.
Jefferies says members reported below-average service over the past three months but are now seeing signs of improvement.
She adds, however: “The focus on a direct product retention strategy for Nationwide customers has been met with disdain by advisers.”
Clydesdale has boosted its overall score from 63.4 per cent to 72 per cent but has moved up the table by only one place.
Merrett says: “The addition of a three-month waiver period to Clydesdale’s already very good retention proposition is great. It’s encouraging to see a lender improve its offering in this area when others are yet to even engage with the intermediary market.”
Hollingworth thinks Clydesdale “continues to be one of the brands to consider for cases that require a more individual approach, particularly higher net worth”.
Clark agrees. “Clydesdale’s underwriters still exhibit an ability to understand more complex cases, backed up by knowledgeable and experienced BDMs,” he says.
However, Clifford reports that processing times seem to be slower of late “and we receive fewer updates from processing teams”.
Defying the odds
For a quarter that brought so much uncertainty in financial markets in particular, it is to lenders’ credit that the average score from our panel nevertheless increased, from 74.8 per cent to 76.6 per cent.
Doubtless all industry players will hope that this trend continues into next year.
Wild Card: Leeds Building Society
This quarter’s Wild Card is Leeds Building Society. Its products compared well to those of the main lender group but it was significantly behind on BDM support and service.
Merrett says: “Leeds offers very good products and criteria in some niche areas but needs to address service – in particular some of its frustrating documentation requests – in order to compete more.”
Clark praises the lender for its willingness to grant interest-only mortgages with no minimum income requirement.
But he adds: “Post-application service standards and BDM support are both lacking at the moment.”
In Hollingworth’s opinion, Leeds continues to work hard to develop products and criteria to help brokers best serve the needs of their customers.
Harle says: “Leeds is one of the few to promote shared ownership at 95 per cent of the share.”
But the lender’s recently added ‘contractor’ scheme is still suffering, she adds.