View more on these topics

Keep a close eye on products to stay ahead of the game

With so many changes distributors and intermediaries should combine forces to check on product ins and outs


Products can be both the lifeblood and the bane of mortgage intermediaries all over the country.

A market-leading product at a decent LTV level with a good fee structure and availability will see intermediaries clamouring to secure a deal for their client.

But it is even more apparent in today’s marketplace that such windows of opportunity are much narrower than in the past.
In fairness to lenders it’s evident that funding tranches remain smaller than anyone would like.

This means they have to be carefully managed with any potential service issues high on the agenda.

As such an occupational hazard is that products can often be pulled quickly with little warning.

It was interesting to see January cited as a ’rollercoaster’ month in terms of product changes. John Charcol estimated that it had seen 29 lenders make changes to products with a good proportion changing almost their entire range.

The main driving forces behind these changes were rising swap rates, high inflation figures and increasing interest rate speculation.

But looking to the positives at least there is some noticeable product activity after the dearth of recent times.

According to a recent report from Mortgage Brain’s monthly product analysis, the number of live mortgage schemes available to UK mortgage intermediaries is well on its way to the 10,000 mark.

There are 5,287 more products available to mortgage intermediaries than 12 months ago

The figures show that some 1,600 products were introduced in January 2011 – a 21% increase – bringing the total number of live mortgage schemes listed on its system to 9,744 as of January 31.

The long-term analysis from the latest figures shows there are 5,287 more products available to mortgage intermediaries than this time 12 months ago.

Trackers lay claim to the largest growth of products introduced last month. A 45% increase (820 products) during January brought the total number of trackers to 2,652 – up from 1,832.

Fixed rate products rose by 17% in January, still offering the majority of product availability. Current figures list 5,982 of all available products.

However, variable rate products saw little movement during January. Eleven products were withdrawn from the market, a 1% decline, representing 1,110 of all available products.

I’ve been saying for some time how vital it is for distributors and intermediaries to form closer relationships with lenders to try to keep one step ahead of the game.

It’s evident that the closeness of these relationships will help as robust communications channels will result in knowing how, when and if a particular product is coming close to the end of its shelf life.

This knowledge will provide brokers with more time to try to secure a competitive mortgage deal while obviously offering the plethora of ancillary sales that have become an absolute necessity in the current marketplace.

Such rollercoaster movement certainly isn’t ideal but it is reflective of the current marketplace and something we all have to work to.

Let’s hope the next few months bring more ups than downs.


Three’s a crowd for Lloyd’s negative equity mortgage

David Hollingworth, mortgage specialist at London & Country, recently wrote a blog on Mortgage Strategy Online about Lloyds Banking Group’s mortgage for borrowers in negative equity. He mentioned that it was a shame brokers did not have access to the product. But what carefully considered advice could actually be provided when no other lender in […]

High fees will fall along with the remortgage giants

I was interested to read last week that loans for remortgages were at a 13-year low in 2010 (Mortgage Strategy Online, February 11). The Council of Mortgage Lenders’ latest data shows that remortgages totalled 313,200, worth £39.3bn, in 2010, down 23% by volume and 24% by value from 2009. Clearly the remortgage bubble has popped. […]

FCA could impose loan-to-income limits

The Treasury has today released a consultation paper on the role of the Financial Conduct Authority, one of the bodies that will be replace the Financial Services Authority when it is disbanded in 2012.

Lack of underwriting expertise results in applications being denied by lenders

Lenders continually claim that the lack of wholesale funds and low levels of redemptions means they remain restrained. Yet a number of lenders missed their 2010 targets, showing there is more to this than meets the eye. In a time when lenders have had to reinvent their underwriting expertise this in itself causes further log […]


News and expert analysis straight to your inbox

Sign up