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Customer defections threatens mortgage industry

The mortgage industry needs to work harder to retain customer loyalty if the industry is to survive, says a survey from Group 1 Software.

The survey into customer loyalty found that customer defection rates in key consumer industries have increased from 16.9% in 2003 to 19.1% in 2005.

It also reports that consumers are becoming increasingly mobile and that unless companies improve retention strategies, loyalty will continue to waver.

Although at 13.6% the mortgage industry has a lower churn rate than both banking (17.5%) and general insurance (17.5%), the report warns that the industry has more “acute problems”.

Remortgaging, the industrys own version of switching, makes up half all new business sold each year, which means the back-book of existing profitable customers who have been traditionally subsidised low entry rates for first-time buyers has now been almost irrevocably undermined, threatening the very business model of the industry.

Instead of using discounts and price-led strategies to retain customers, companies need to focus on brand values and other forms of delivering value and privilege back to the customer, says Group 1 Software.


Debt strategy likely to result in more home repossessions

Plans by the government and lenders to tackle credit card debt could put homes at risk of repossession, it is feared. Plans being prepared by the Department for Constitutional Affairs will make it easier for banks, credit card firms and major stores to repossess debtors’ homes. The department is planning legislation to allow charging orders […]

Is there a need for common standards?

Last week Mortgage Strategy exclusively revealed that Origo had delayed its plans to introduce an e-commerce standard for the mortgage market until the middle of next year. Frank Eve, managing director of Frank Eve Consulting, has been meeting industry representatives over recent months to help move the project forward. He says: “Origo decided to extend […]

RICS responds to BoE mortgage figures

The Royal Institution of Chartered Surveyors has responded to the Bank of England’s mortgage figures for September 2005. David Stubbs, economist for RICS, says: “Figures released by the Bank of England October 31 2005 show that the number of new mortgage approvals for home purchases were a seasonally adjusted 107,000 in September, up less than1% […]

Paul Hunt, head of marketing, Platform

“Intermediaries are now far more reliant on lender online technology than before. And despite predictions to the contrary before M-Day, packagers are still here and still thriving.”


Guide: 10 required letters — what to send, to whom and when?

This guide from Johnson Fleming will take you through the required communication and also give ideas for additional actions that will ensure your auto-enrolment project is a success. The topics in this guide include: the letters you need to send out; what to send and when; the importance of employee engagement; and what to consider as additional communication.


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