You will understand if I skip over the heightened interest in new players entering the market. The rationale for this will become obvious as we look at other trends. But if the traditional lenders could ask for anything from Santa this year what would it be?Perhaps an injection of productivity or creativity into their moribund retail operations. You only have to look at the sunken costs – never to be recovered – of their high street networks. Then, since M-Day, add in their draconian regime to supervise sales staff, paranoid (rightly) about the quality of regulated advice and consequent reputational risk if they make the headlines for the wrong reasons. How they must wish for the quality of an IFA or mortgage broker. Ever wondered why high street lenders don’t sell or market higher risk specialist products such as sub-prime or self-cert? But Santa can’t perform miracles. How about something more tangible like a new bit of IT kit? And I don’t mean a colour printer or having secure email to send mortgage offers. Most lenders must look with envy at the automated, online solutions available to the intermediary market – the gap between the haves and have nots is turning into a gulf. If lenders are serious about wanting your business they should prioritise their IT spend instead of using what resource they have propping up their retail channels. Sounds more like a job for PC World than Santa. No, the dream of traditional lenders is a magic potion called ‘a retention strategy that works’. In other words, “Would you lot please stop churning our mortgage customers?” But it’s lenders themselves who created this monster, not brokers. And it’s going to take a brave lender to consider the solution. The only answer for balance sheet lenders is to stop paying proc fees for remortgages (a throwback to 10 years ago) and to narrow the margin between acquisition pricing – the infamous two-year deals – and the reversion price or SVR if you prefer, to make remortgages less attractive. But why now, you ask? Because over the past 10 years mortgage churn has increased – a combination of smarter borrowers, a vocal national press and brokers’ actions. It is now at a critical level. Balance sheet lenders are losing as many customers as they attract, and having to offer ever more ridiculous pricing to attract new customers at the same time as losing the lucrative ones paying SVR. The next time you feel a nibble at your fingers it may not be Jack Frost.
As Christmas approaches I will indulge in one of those areas so beloved of TV this time of the year - a review of the year. But instead of debating the merits of Rooney vs Flintoff for sports show-off of the year let\'s consider trends in the mortgage market.<