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The UK mortgage massacre

Statistics released yesterday by the Council of Mortgage Lenders showed
that mortgage lending in 2008 was at it’s lowest ebb since 1974.

Mortgages for purchasers were down a whopping 49% on 2007.

The CML data crystallizes what we already knew, namely that from a
mortgage perspective, 2008 was a massacre. There’s nothing much to say
other than that the entire market is barely recognisable from what it
was two years ago.

We have seen the number of mortgage products fall from a high of around
37,000 to stand at a mere 3,115 according to those nice folk at Mortgage
Brain. That is a big difference.

The real issue is not really the number of products it is the fact that
they all now seem much-of-a-muchness. The key USP’s of using one lender
over another are blurring rapidly and rate differential is minimal.

It is still only the various private banks who offer any real
alternative at the moment and I do think it is up to the key lenders to
re-address the situation. Look carefully at their distribution models
and the way they manage tranches, much of this still has not really
changed. Is dual-pricing really an effective method of doing business
and maintaining relationships?

As brokers we need to stand together more than ever and enter into
dialogue with the lenders daily. It’s not about just each getting
various exclusive products we can keep to ourselves any more. It’s even
not just about survival.

It’s about looking after our customers properly, making sure they have
the two most important things that they cannot get when walking directly
into a bank; quality independent advice they need so much at the moment,
and the type of service that they have come to expect.

As independent brokers perhaps it is time for us to have our own
independent public facing spokesperson. We have AMI that does some
incredibly valuable work behind the scenes for our benefit, but we do
not seem to have a Michael Coogan figure to represent us all publicly.

The time is right for this with public trust in banks at a seemingly low
point, whilst demand for quality independent advice is high.

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