Lenders have been accused of giving the intermediary market the cold shoulder by offering their 95% LTV NewBuy products to only a small number of brokers.
NatWest, Nationwide and Barclays all launched products for the government’s NewBuy Guarantee scheme last month, with Lloyds Banking Group planning to unveil its products on April 16 and Santander following suit in May.
But Nationwide is the only lender that offers the deals to all brokers. Barclays is restricting its distribution and only offering the products through brokers on builders’ selected panels and in branch, something Lloyds group also plans to do.
But Lloyds group says it has plans to offer its range through more intermediaries in the future.
NatWest only offers its products direct and Santander says it is still working on the details of its distribution.
Barratt Developments, one of the builders Barclays is working with, has only 14 brokers on its panel.
Adrian MacDiarmid, head of mortgage lender relations at Barratt, says: “The lenders came to us and told us what their strategy was. Barclays has decided that it wants to make customers understand the product which is why it has gone through a small panel of brokers who are fully engaged with the process.
“Our approved brokers are more likely to offer customers the standard of advice they want because they have specialist knowledge of the products.”
But David Hollingworth, mortgage specialist at London & Country, says: “In terms of supporting the wider broker market, Barclays has pretty much failed.
“It is disappointing, but from Barclays’ perspective it will be looking to control distribution. The different distribution methods make a mish mash of the NewBuy scheme and do nothing to improve its effectiveness and profile.”
Ray Boulger, senior technical manager at John Charcol, says the firm does a number of new-build transactions and that problems often occur when a borrower visits the broker to see what deals they can get but are then coerced into using the builder’s broker.
He says: “It’s a restraint to trade. There are plenty of brokers, including us, who are competent to deal with this kind of business, and it’s unhelpful to consumers.
“For Barclays and Lloyds group to restrict these deals to the builders’ panels is unacceptable.”
A spokeswoman for Barclays says it made sense for it to use brokers that the builders recommended.
Robert Sinclair, director of the Association of Mortgage Intermediaries, says: “I think it would be better if the scheme was more open but given the problems and constraints of the deals I can understand why builders wouldn’t want this.”