View more on these topics

Lenders hit back at Nationwide

Lenders have hit back at Nationwide after it accused them of making unnecessary lending charges.

Stuart Bernau, executive director at Nationwide, says Halifax and Abbey run the risk of being accused of blatantly profiteering by charging higher lending charges and higher rates for those needing to borrow more the 90% of the value of the property.

He says Halifax and Abbey charge a substantial higher lending fee on top of higher interest rates, which is effectively charging borrowers twice to offset the risk of higher LTV lending. This comes at a time when repossessions and arrears are at low levels.

But both Halifax and Abbey have hit back at these claims and justified the charges.

Joe Wiggins, spokesman for Abbey, says: “We normally impose a higher lending charge when a customer wants to borrow 90% or more of a property’s value because there is a greater risk to Abbey on high LTV loans. We choose to have a fee whereas Nationwide has no fee but charges higher LTV customers much higher rates, so it is certainly not whiter than white. Abbey customers do not have to pay the fee upfront so the cost can be spread over the term of the mortgage.”

Halifax says it is only a small proportion of borrowers that actually pay the higher lending charge and, like the Abbey, it recognises there is a greater risk involved.

And Paul Fincham, spokesman for Halifax, says: “The vast majority of first-time buyers these days put down a sizeable deposit because they realise they get a better deal that way. It is only about 20% that pay the higher lending charge.”

Nationwide estimates that since it abolished its higher lending charge back in September 2000, borrowers in this country have paid over 1bn in unnecessary higher lending charges.

Bernau, adds: “Despite the negative publicity surrounding higher lending fees it is clear many borrowers continue to find themselves faced with this charge at a time when their finances are already stretched and they are at their most vulnerable.

“An added cost of around 1,500 is the last thing they need.”


Commercial exam set for 2005

A specialist commercial mortgages exam module is being developed by the Institute of Financial Services, with a launch expected early next year. Though the final syllabus has yet to be confirmed, it is anticipated this module will address the specialist lending requirements of this sector and the range of products available. Mark Roberts, head of […]

B&B published quarterly mortgage market review

Bradford & Bingley has published its quarterly mortgage market review. Duncan Pownall, mortgage development manager at Bradford & Bingley, says: “After a slow start to the quarter gross mortgage lending rose in August to an estimated 27.5bn one of the highest figures on record. “All types of lending increased, although the most marked was remortgaging […]

Regulation had zero effect on UK housing, says Halifax

Regulation by the Financial Services Authority has produced zero contribution to a sustainable housing market, and if anything has worked against it, says Halifax.Speaking in Monte Carlo, Alan Cleary director of Halifax Intermediaries, told delegates that individual government policies had only been successful if judged in their own terms. Indeed, he says, only recently the […]

Rightmove sets the stage on HIPs

Rightmove’s plans for a scheme that defers payment of Home Information Pack costs until sellers complete on a property means rivals will have to fund HIPs upfront to compete, says Frank Eve

Health services

Challenges and opportunities

By Sarah Scott, marketing consultant On 22 February this year the charity Diabetes UK launched a fundraising initiative, #Swim22. They challenged individuals to swim 22 miles over the course of 89 days – a distance that equates to the width of the English Channel. Because of the time period the challenge is spread over, it […]


News and expert analysis straight to your inbox

Sign up