View more on these topics

Concern over offset sales

Concern is mounting that borrowers are being advised to take out offset mortgages despite the product not being suitable for them.

Some brokers have commented that consumers going direct to lenders are being &#39blinded with science&#39 and being advised to take out offset deals regardless of their circumstances.

Ruth Whitehead, principal of London-based Ruth Whitehead Associates, fears people are being recommended to take the product because it is the flavour of the month and is very hyped.

She says: “We&#39ve found that clients who have previously gone direct to the lender have been put on these deals when they never should have been. This is particularly true of Intelligent Finance. Too many people are paying more interest just for a bit of flexibility and are struggling with payments.”

She adds: “Young first-time buyers have been told that offset deals are a good option for them. It&#39s simply ridiculous. Lenders must stop marketing the product so aggressively.”

Ray Boulger, senior technical manager at Charcol, says: “I agree that offset lenders can blind consumers with science but a major problem is that some brokers don&#39t understand how the products work.”

Matthew Wyles, development director at Portman, says; “We&#39ve thought this for a while. If you calculate the cash you would need to deposit in an offset deal compared with a two-year fixed or discount deal, the offset would not be appropriate for nine out of 10 borrowers. Most consumers would expect to reduce their mortgage rather than hold so much cash.”

Jennifer Blackwood, spokeswoman for IF, says: “Over 70% of IF&#39s mortgage business is placed by advisers so it is clear that most consumers seek advice when taking out a mortgage.”

Recommended

Exclusive: Enterprise appoints Paradigm Consulting

Enterprise Homeloans, the exclusive non-conforming mortgage packager for Zurich, hasappointed Paradigm Consulting to manage their marketing and PR. Michael Clapper, CEO of Enterprise says: “Enterprise is entering a new phase in thedevelopment of its proposition to Zurich&#39s intermediaries and having put the internal processesin place to provide a first class service, we are now turning […]

Exclusive: Bankhall poised to buy Norwich Union mortgage club

Speculation is mounting that Bankhall is to buy Norwich Union&#39s mortgage club, bringing its total intermediary base to around 40,000. Although both Bankhall and NU refused to comment on what they say is market speculation sources believe the deal is definitely going ahead and its announcement is imminent. Such a deal would put Bankhall in […]

Civil engineers and foresters looking to join RCIS

Two professional organisations are interested in joining forces with the 110,000-member RICS. Members of the 800-strong Institute of Chartered Foresters have similar standards and procedures in education and standard setting, and with close links with the rural economy, many feel that ICF members make natural partners with chartered surveyors. At its March AGM, the ICF […]

Former Axis PR guru publishes pop culture book

Former Axis PR guru Paul Wellings – who describes himself as the bastard offspring ofBurchill and Parsons&#39 – has written a memoir of his days as a fledgling pop idol, pirate radio jock, working on NME and his desire not to praise Tony Blair but to bury him. The book, &#39I&#39m a Journalist Get Me […]

Newsletter

News and expert analysis straight to your inbox

Sign up