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C&G goes direct in search of business

So what should we make of Cheltenham & Gloucester’s latest tentative foray into the mortgage market? There was no big product launch but apparently it is reverting to pounding the pavements in search of new business from estate agents.

I’m reliably informed that C&G’s branch managers have been charged with loosening the grip of estate agencies’ inhouse brokers by encouraging negotiators to pass their mortgage enquiries direct to local C&G branches. Déjà vu or what?

Why would these negotiators run the risk of alienating their bosses, let alone the poor souls who have spent the past decade saving property chains by placing impossible mortgages for customers with impaired credit? Speed, of course.

It appears that for inhouse broking teams to prise mortgage offers out of C&G, patience is a virtue – apparently six to eight-week delays are common. On the other hand, shove papers over the counter at a local C&G branch and the application can be turned around in seven to 10 days.

Does this sound too good to be true? Unsurprisingly, there’s a catch if you are an estate agent. It seems that C&G’s largesse doesn’t extend to paying for business introduced in this way. But as any C&G manager will tell you, the lack of fees is counterbalanced by securing house sales quickly.

The problem is that this reversion to yesteryear’s sales strategy doesn’t seem to be popular with estate agents.

I’m led to believe that in one or two instances the lender’s representatives have been encouraged to vacate agency premises, giving the concept of prompt withdrawals a whole new meaning.

I’m not sure that C&G’s strategy has the same legs as HSBC’s Rate Matcher deal. In these difficult times, handing over prime applicants is going to take some swallowing.

And when the good times start rolling again, how will C&G’s initiative be remembered by resurgent inhouse brokers? My guess is that C&G is banking on them having the memory of a goldfish. I suspect it’ll be more like an elephant’s.

So it’ll be interesting to see how the trade-off between new business and reputation will play out, because this move seems to fly in the face of the broker relationships the lender spent many years developing.


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