View more on these topics

CML rebuts MPs’ criticism

The Council of Mortgage Lenders has defended lenders that charge high arrangement fees on low rate products following criticism from MPs.

In a recent early day motion, a group of MPs accused lenders of taking advantage of consumers by charging high arrangement fees on low rate products. They expressed concern that “poorly advised home buyers” could be attracted by such low headline rates even though they might not be good value for money.

The motion stated: “High arrangement fees are being used to subsidise low headline interest rates so as to ensure that mortgage products appear in best buy tables, even where such mortgages are not the best buys once account is taken of the fees charged.”

It called on the financial services industry to ensure that the headline rates and any additional fees of mortgage deals are given equal prominence, ensuring that home buyers are not sold inappropriate products.

But the CML has leapt to the defence of such schemes. In its latest newsletter it reveals that it plans to contact the MPs concerned and explain that high fee, low rate products are legitimate.

A spokesman for the trade body says: “There is nothing inherently wrong with low rate, high fee products which may be the right and rational choice for people borrowing large sums of money. The key is to have in place compliant selling practices under the Financial Services Authority regime.”

He adds: “We would not support constraints on product design or price controls.”

The motion also condemned Halifax’s 1,999 arrangement fee as a particular concern. But a spokesman at Halifax defended the fee, describing it as an “upfront and transparent” feature of the product concerned.


Yesmortgages grows Irish presence

Sub-prime distributor yesmortgages is stepping up operations in the Republic of Ireland following its pilot launch there in 2006.

Coventry launches capped rate option

Coventry is adding a capped rate product to its MOREgage range, making it the only capped rate in the 100%-plus lending market.

Derbyshire reports mortgage lending of 2bn

Derbyshires annual results show its gross mortgage lending hit 1,860m in 2006.The total gross mortgage lending, including book acquisitions, was a 33.8% increase over the previous year. It also reported profit after tax was up 34.4% to 16.4m and asset growth stood at 6bn.Peter Richardson, chief executive of Derbyshire, says: This has been another momentous […]

Terraced houses see biggest price rises

Terraced houses have seen the greatest increases in their price over the last five and 10 years, research by Halifax Estate Agents reveals.Based on Halifax’s house price data, the results show that over the last 10 years the average UK terraced house price has increased by 239%.Over the last five years the trend is a […]


News and expert analysis straight to your inbox

Sign up