View more on these topics

Entrants can’t shake HBOS dominance

Unless you’ve been asleep or out of the country for the past few months, you’ll have heard of Michael Bolton’s new lender edeus. While there’s been loads of hype surrounding its launch next month, what has taken me by surprise is the rumour that it is to unveil an amazing 650 products.

It’s good to give consumers choice but how can one lender come out with so many products? It begs the question of whether this is overkill in terms of product options and whether edeus is biting off more than it can chew.

How many products can the market cope with and how are brokers expected to keep on top of the options available when 650 new products hit the market in one day? Perhaps edeus is hoping that if it overwhelms advisers with its products they’ll take the easy option and recommend one of its deals rather than a competitor’s.

But is this treating customers fairly? Consumers are confused enough about financial products – including mortgages – as it is without hundreds more appearing. And I find it hard to spot 650 gaps in the market that edeus can fill.

It could also cause problems for the sourcing systems which already struggle to update when products are launched or details changed. And surely the regulatory burden on edeus will be huge if it has to produce compliant Key Facts Illustrations for 650 products.

While edeus is arguably the highest profile new lender, several others have recently entered the market and more are on the way. Last year we welcomed Victoria Mortgages and more recently we have seen Bill Dudgeon and Co deserting The Mortgage Business to launch DB Mortgages.

But despite all these new lenders and products, HBOS still dominates the market and has not seen its share of business fall. It makes you wonder how competitive the new lenders really are if they haven’t even managed to dent HBOS’ dominance.

If bodies like Which? start to worry about there being too many products lenders could end up facing a regulatory probe.

I suppose the big winners in all of this will be the consumer search engines such as money-supermarket.com and new kid on the block, Jim Spowart’s peopleschampion.com. Bizarrely, these rivals are powered by the same technology which makes you wonder about their value and how independent they are.

And peopleschampion.com apparently plans to launch its own products. It will be interesting to see if these always come top of relevant searches on the website.

Finally, by the time you read this I’ll hopefully have survived my first day in my new job as personal finance editor of The Scotsman – wish me luck.

Recommended

We can all do our bit to help FTBs

Aspiring first-time buyers are having a torrid time but lenders, brokers and networks can all play a role in helping them get a foot on the property ladder, says Sally Laker

Victoria updates product range

Victoria Mortgages has made a series of significant updates and improvements to its product range and lending criteria. These new developments signal the start of Victorias objective to achieve 2bn in lending by the end of 2007.Victorias packager only distribution means lower operating costs meaning savings can be passed onto the borrower in the form […]

GE denies claims about advisers’ commissions

GE Money Home Lending has refuted accusations that advisers failed to disclose commission payments on a number of its sub-prime mortgages and loans. It has been reported that claims firm Loancheck has documents showing that commission was not disclosed on two cases by GE subsidiaries. Loancheck has confirmed to Mortgage Strategy that it has other […]

Beacon Homeloans joins ENC

Beacon Homeloans is the latest lender to support the Enhanced Non Conforming sourcing module on Trigold.The lender will have all its products listed and verified on ENC enabling advisors to make accurate and precise product comparisons.Bill Safran, chief executive of Trigold, says: Beacon is leading a new generation of lenders that have re-written the rules […]

Infographic - thumbnail

Infographic — health cash plans 2014

Health Shield has strengthened its position in the cash plan market, according to the latest Laing & Buisson report, increasing its market share by income from £27m in 2012 to £29m in 2013. The Health Cover UK Market Report 2014 revealed that the non-profit-making Friendly Society was the only provider in the top four to have increased its market share by income over the past year. Health Shield was also the only cash plan provider in the top four to have increased its market share by income every year for the previous five years. This infographic presents the figures.

Newsletter

News and expert analysis straight to your inbox

Sign up