If things carry on the way they’re going, soon there’ll be no lenders looking for new business. We’ve seen many of them shutting their doors and this trend will continue.
Although lack of funding seems to be the main problem, it’s compounded by the fact that lenders with money available become so overwhelmed by consumer demand that their service can’t cope.
I’m unlucky enough to have a large mortgage and part of my borrowing comes off a fixed rate deal in July.
My existing lender can’t tell me the products it will be able to offer me but then it can’t even tell me what it will have available tomorrow, let alone in three months.
Moving to another lender is not an option as I also face hefty early repayment charges on the rest of my borrowing. I’ll be left with the Hobson’s choice of whatever my lender can offer when the time comes.
But clients whose borrowing is tied up in one mortgage deal which ends soon must be even more worried. They need to not only look at what their existing lenders can offer but also at the rest of a shrinking market.
Many will stay with their existing ones because that’s the easiest thing to do, especially with criteria being tightened and products withdrawn.
And yet we have BDMs visiting us and trying to persuade us to place business with them. This is a triumph of optimism over reality given that cases are being thrown out even after decisions in principle have been made.
I admire the BDMs’ pluck but even they are telling us that many of them are being actively encouraged to flatten business levels.
Consumer journalist Martin Lewis and I have had our differences in the past over equity release.
But this week I was delighted to see him on GMTV strenuously advising the public to shop around and to seek the help of whole of market brokers, even if they have to pay fees. This is the first time I’ve heard Lewis favour the fees option.
At times like this, experienced brokers should have clients beating down their doors for help. Hopefully some of Lewis’ words will get through and the public will perceive our advice more positively.