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Brokers can give lenders fresh ideas

Last week our Nationwide BDM came to see us. She is professional and keeps us up-to-date with what’s happening with rates and criteria, as a good BDM should.

But one thing that makes her stand out from the crowd is that she regularly asks how Nationwide can help us and what innovations it could implement with its products to help kick-start our business.

This is a refreshing approach. All too often lenders simply churn out their new product ranges what they could do to stimulate the market.

Nearly every product guide has the standard batch of fixed, tracker and discount deals. Occasionally someone goes mad in the marketing department and produces a stepped scheme, but on the whole the word innovation does not seem to be in the lexicon when it comes to product development.

Of course, it’s easy for us brokers to sit here and think of our ideal deals – a 2.99% five-year fixed rate, no arrangement fees, free legals and valuation, and no early repayment charges at any time would be nice.

Yes, it’s true that such a deal would be great for brokers.

But, as surprising as this may seem, we brokers realise that such a product would result in an almost instant meltdown of any lender trying to offer it.

So we are well aware that no firm is ever going to offer such a deal but what we can help lenders do is think outside the box.

I know this could be tricky but I’ve always thought a tracker followed by a fixed deal would be pretty tasty.

For example, what about a two-year tracker at 3.49% and then three years fixed at 5.25%?

I suppose this is where I show my lack of knowledge about costing structures but I’ve never seen a lender try out such a product.

We then turned to the market in general. For us, it seems that the key is to bring back first-time buyers.

Again this may be simplistic, especially as neither lenders nor the government seem to give a hoot about them.

I recently heard someone from HSBC cheerfully discussing its new deals on the radio, all smug. But when the reporter dug deeper it seemed the sexiest rates were for sub-60% LTV and it could only offer a maximum of 75% LTV to any borrower.

When the reporter asked how that was suitable for first-time buyers the HSBC man seemed to think it perfectly reasonable for them to save 25% deposits. He should spend some time in the real world.

What about a return of higher lending charges but with a twist, we suggested to Nationwide. Perhaps the government could pay the premiums on these deals.

Maybe borrowers would have to commit to stay with the lenders involved for, say, five years.

This would hopefully even out price fluctuations. What do you think?

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