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The HBOS giant is alive and kicking

It was no surprise that the industry and the press in particular jumped on HBOS’ Q1 results recently, its share having declined from around a fifth of the market to about 8%.

A number of reasons were advanced to explain this blip, ranging from over-concentration on its customer retention strategy to being off the pace compared with competitors as market demands changed following the recent Bank of England base rate increases.

But the market should not underestimate how quickly HBOS’ share will head north again.

In the past two months, Halifax has bucked the base rate trend with two-year fixed rate products at 5.24% with free valuations and legal fees. The semi-exclusive at 5.44% is still a cracking deal and is flying off the shelf.

Without doubt, BM Solutions is the most aggressive of the five brands given the long awaited changes to its buy-to-let range offering pay rate products, with two-year tracker deals as low as 5%.

To further enhance its offering, most distributors are paying brokers extra fees of 0.05%. And if that wasn’t enough, BM Solutions has also made some important changes to its Mortgage Plus product criteria so it cannot be ignored in the 100% product arena. Again, it has upped the ante with a £300 bonus on top of the increased proc fee.

And importantly, BM Solutions continues to deliver excellent service and pay brokers within days of completion.

The Mortgage Business has broken into and been accepted by the packaging world, and app-ears to have been the outstanding HBOS brand of the past nine months. It has a knack of hitting the market with consistent ranges of products, maintaining some unique features through its House 2 House range and aggressive fixed rate self-cert deals.

And Bank of Scotland seems to have been reinvigorated under managing director Peter Curran. It has made changes to its buy-to-let criteria as well as extending Self 90 (self-cert up to 90%) to more distribution routes.

Finally, Intelligent Finance has initiated an education campaign on offset mortgages and de-veloped a number of innovative tools to support intermediaries. These include an offset calculator and system enhancements for Trigold.

The products – the exclusives in particular – have been aggressive, with rates in the low 5% region. What makes it even more dangerous for competitors is that it can offset loss-making products between brands to gain market share.

We should see these results as historical data and be aware that the HBOS giant is alive and kicking. This is good news for brokers and clients, as it will drive further competition in the market.


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