Nationwide to build platform

Nationwide is setting up its own online platform because it says the Mortgage Trading Ex-change can no longer offer the society the service it requires.

This was revealed by Peter Saint-Ruth, product manager at Nationwide, at the Lending Strategy technology forum in London recently.

Saint-Ruth says the UK’s largest society backed the MTE when it launched and it still has its place.

But he adds: “We have recognised that the MTE has cut the number of solutions from Nationwide and other lenders so we are in the process of developing our own online solution for the broker market.”

Nationwide has signed a deal with a company that builds information systems to be its partner in developing its internal IT systems.

Saint-Ruth adds: “The MTE has a place in the mortgage industry but lenders have to do more work in developing their own online technologies.”

Tim Hughes, head of intermediary mortgages at Nationwide, denies Nationwide has any problems with the MTE.

He says: “We’ve recognised that some brokers don’t want to go through the MTE so we are developing our own website to sit alongside it. This doesn’t diminish our commitment to the MTE. We’re just responding to customer feedback.”

Franks Eve, managing director of Frank Eve Consulting, which is advising Origo on setting up open standards in the mortgage industry, says lenders developing their own online platforms is a growing trend.

He says: “Trading platforms have their place but lenders want to interact direct with larger brokers and packagers. It’s a case of the mortgage market maturing in terms of technology. Lenders want more options when it comes to communicating with their distributors.”

But he says this will not be the end of platforms, and initiatives such as Origo’s open standards will open up opportunities for them.

The MTE was launched in 2003 as a joint initiative between Mortgage Brain and Mortgage 2000, allowing introducers to trade electronically with several lenders in one place.

Mark Lofthouse, CEO of Mortgage Brain, says: “There is nothing anti-MTE in this move. It does not portray a lack of confidence in the platform. A total of 22 lenders accept business electronically via the MTE and we get 28,000 mortgage transactions a month – does that show lack of confidence?”The first hike in interest rates for 12 months has sparked fears of a slowdown in the housing market.

The Bank of England’s Monetary Policy Committee increased interest rates to 4.75% last Thursday, having previously held them at 4.5% for 11 months running.

It had been widely debated whether rates would change at all, with many expecting a hike to come later this year.

Barry Naisbitt, chief economist at Abbey, says: “With economic growth at 0.8% in Q2 2006 and inflation at 2.5% I see this increase as an adjustment rather than the start of a new phase of rising rates.”

But industry opinion is divided over the effect the base rate hike will have on the housing market.

David Newnes, managing director of Your Move estate agents, says: “This will put some potential buyers off making their move because any rate rise knocks confidence. The housing sector has been steady for the past six months so this hike is unnecessary and there is now a risk of the market slowing.”

However, Milan Khatri, chief economist at the Royal Institution of Chartered Surveyors, says: “We don’t believe this rate rise will have any immediate impact on the economy or the housing market, although if interest rates were to rise further in the coming months a slowdown in the housing market in 2007 would have to be expected.”