Lenders are growing branch networks to capture more clients

In response to Stephen Smith’s comments in last week’s Mortgage Strategy that lenders may rely more on brokers rather than sell direct after the Mortgage Market Review paper, the problem is that they still continue to offer better rates direct and undercut brokers.

Watch television any evening and you’ll see two of the biggest receivers of intermediary business, Santander and Halifax, encouraging consumers to go direct to them to get lower rates.

These lenders account for nearly 45% of the mortgages written. They already have to have their financial planning managers authorised, the cost of registering their mortgage sellers is minimal and definitely outweighs the cost of paying proc fees and losing all the other revenue streams they capture by dealing with consumers direct.

They are growing their branch networks because they understand the value of footfall into their branches – if you get consumers in through the door you can try to sell them every branded product under the sun.

It’s not right and clients don’t receive advice but do you think they care? No. They have achieved a lower rate on their mortgage with lower fees than if they had used a broker.

Luke Atkinson