Halifax has knocked RBS off the podium in the race to win brokers’ hearts, Mortgage Strategy’s latest lender survey shows
The pressure is on mortgage lenders to stay fighting fit in the race for customers. The enduringly low interest rate may have played into their hands over product pricing but uncertainty about the economy and consumer appetite means lenders must be on top form to succeed in the current market.
So who has performed well during the past quarter and who needs to pick up the pace? In Mortgage Strategy’s latest lender survey, our panel of critics have rated lenders purely on their residential business, assigning each a score from zero to 10 across the various categories.
Each panellist’s scores reflect not only their own experience but that of their colleagues and other advisers in their firm or network.
Replacing the previous Lender of the Quarter is the Wild Card, an additional lender selected at random from outside the top 10 by gross volume. It will be rated in the same way as the other lenders. A summary of the results can be found in the table below.
Halifax scooped the gold medal in our survey this time, gaining one place from the previous quarter. Its triumph was built on its confidence rating, which more than compensated for its lower products score.
Riach Financial Advisers broker Bob Riach praises the lender for its consistent approach.
“Halifax’s service proposition is still good. It has generous affordability calculations and very flexible underwriting,” he says.
He calls on other lenders to follow Halifax’s stance on certifying documents. “It does not insist that all documents are certified as true copies; certifying multiple documents can be very time consuming. I scan most clients’ documents while they are with me. Other mortgage lenders should adopt this practice.”
There is still room for improvement, however. “Halifax has finally moved away from the requirement to fax client documents and now has a document upload system, which works well. The next stage should be to build this into its online application system,” adds Riach.
Perception Finance managing director David Sheppard agrees that Halifax’s reliability has earned it points with brokers.
“Despite it often having very good rates, its service has not dipped and that has to be applauded,” he says. “I would like to see it relax the maximum income multiple for cases above £500,000 but I don’t expect that to happen any time soon.”
Trinity Financial product and communications manager Aaron Strutt is impressed by the lender’s flexible approach. “Our brokers still say Halifax’s contractor policy is one of the best in the market because it is so flexible,” he says.
Virgin Money has climbed two places to gain the silver medal. Like Halifax, its biggest strength is maintaining the confidence of brokers.
The lender has accelerated to the podium on the back of its new retention proposition, welcomed by Alexander Hall technical director Richard Merrett.
“It continues to demonstrate an admirable commitment to the intermediary sector,” he says.
PTFS mortgage proposition manager Victoria Jefferies adds: “News of Virgin’s product transfer system and remuneration policy has gone down really well with advisers.”
Chadney Bulgin mortgage partner Jonathan Clark thinks Virgin is a top performer.
“It continues to strive to become the broker’s lender of choice, rolling out its new product transfer service ahead of schedule. Combine this with great rates and excellent service and it’s definitely on track to achieve this,” he says.
MoneyQuest Mortgage Brokers director Rob Clifford says: “Processing times are excellent and all of our business seems to transact quickly,” he says. “Our BDM is one of the best and actually has the power to influence cases.”
Barclays has significantly improved its performance and sprinted four places up the scoreboard to third position.
Sheppard says: “Our only issue now is the online application system but there is talk this may be improved soon. There was a period when we had issues all the time; now there are hardly any.”
Merrett says: “In a market where affordability has been one of the most difficult aspects, Barclays’ premier banking customer proposition serves as a real differential, helping to attract very high-calibre mortgage customers.”
Meanwhile, Strutt has praise for the lender’s service. “It has been getting offers out in a week and booking valuations on the same day,” he says.
Brokers feel Barclays’ call centres are still holding it back compared to those of its rivals.
Jefferies says: “Communication appears to be the issue at the moment; online facilities and call centres are not meeting advisers’ expectations.”
Another panel member, who did not want to be named, says: “We have issues with call-centre staff not having enough information from the underwriters to update fully.
“We have also had system issues where the valuation was put on hold until the case was agreed and yet the client had received a text prior to this saying the valuation had been booked in regardless. This can harm client relationships.”
RBS (NatWest Intermediary Solutions)
NatWest Intermediary Solutions has fallen off the pace this quarter, dropping from first to fourth place. Its product and service scores have dipped slightly, keeping it off the podium. However, panel members remain fans.
“NatWest has made a steady improvement in all areas over the past year and is in overall great shape,” says Merrett. “The criteria mandate afforded to its excellent large-loan team of underwriters is extremely welcome because it helps deliver good customer outcomes in areas where some lenders are much less flexible.”
John Charcol products technical manager Simon Collins welcomes NatWest’s plans to increase its BDM service levels. He says: “The BDM coverage is about to get better with the launch of additional telephone support.”
London & Country associate director of communications David Hollingworth praises NatWest’s overall package. “Rates coupled with an accommodating approach help to bring in the business,” he says.
Clark adds: “NatWest’s service standards have held up well recently after early signs of creaking. This is surely a result of a massively increased share of the intermediary market.”
Clifford says the lender is currently top in terms of processing times. “Service with NatWest is prompt and reliable,” he says. “It sources well and its exclusive range is particularly attractive.”
Santander for Intermediaries
Santander for Intermediaries has slid two places this quarter, down to fifth position. The panel have differing views on the lender.
“It is good that Santander continues to do a free valuation on every mortgage but it is important that it does not see this as its only selling point,” says Sheppard. “It has not been as good on rates as its competitors of late.”
Jefferies says advisers have criticised Santander’s “lack of BDM support”.
Hollingworth believes the service from Santander is hard to beat, but “rates have failed to attract the same volume as other lenders”.
But Merrett says: “Santander has become the market leader in every aspect of service: from time to offer, to telephone and account support. I am surprised more lenders have not launched a similar proposition to its select relationship team, which is consistently excellent and sets it apart.”
Clark welcomes the recent improvements the lender has made to its intermediary website and “rather complex affordability calculator”.
Meanwhile, Clifford says: “The lender offers very quick service and turnaround times, with most cases underwritten in a proficient manner.”
Coventry Building Society
Coventry has held steady this quarter, maintaining its hold on sixth position. Its long-term fixes have won it support among the panel.
Merrett says the lender has been “consistently solid and dependable”, adding: “It continues to offer something different in products, as exemplified by its market-leading 10-year fixed rate.”
Clifford too has praise for Coventry. He says: “Our BDM is always ready to assist; we rarely have to contact her and she is excellent when required. The only issue is that Coventry doesn’t source highly, but it has some good products”
Clark says the lender “stunned” the market with its recent introduction of a 10-year fixed-rate deal at 2.39 per cent. “It continues to serve brokers well with generous income multiples and reliable service levels,” he adds.
Skipton Building Society
Skipton’s performance has dipped this quarter, with the lender falling two places to seventh.
Merrett says Skipton seems to be losing its way slightly after an extremely strong 2015.
“It has many positives but the biggest factor impacting it, particularly in London, is restrictions around affordability,” he says. “We have had several instances where advisers get some strange outcomes based on a customer’s anticipated outgoings when compared to other lenders.”
But Sheppard thinks Skipton’s online proposition has improved while Hollingworth says its commitment to brokers is unquestionable.
“Its first-half results made no secret of the fact that 95 per cent of its mortgage business came from intermediaries. To do that it continues to improve, evidenced by its desire to pilot a retention strategy to involve and reward brokers.”
Clark has heard his colleagues enthuse about the service they have received from Skipton.
“In both cases this was following a call from an underwriter who rang them to fully understand a case. This resulted in the mortgage offers being issued almost immediately,” he says.
Nationwide for Intermediaries
Nationwide remains in eighth position in our survey. Its service and BDM support are stopping it from climbing higher up the leaderboard.
Merrett says: “Continuing poor service and an inability to resolve issues have impacted Nationwide’s reputation of late and this is something it needs to address urgently.”
Jefferies thinks the lender is still not back to its best. “Inconsistency is the main complaint from advisers,” she says. “But there is a recognition that improvements are needed and we are starting to see some evidence of this.”
Sheppard agrees with this criticism. “There are two extremes: an application goes either extremely well or completely the opposite.”
Not all panellists have had problems with Nationwide. Clifford says: “Its support team is helpful. Apart from a few issues with misinformation on applications, it is one of the better lenders.”
Clark adds: “Nationwide appears to have turned a corner with its service. Its new ‘case ownership’ processing system is starting to reduce application-to-offer times.”
Meanwhile, Strutt says: “Rates are very good and mortgage offers are coming out faster than the expected 10 days. It is also picking up the phone very quickly.”
YBS (Accord Mortgages)
YBS finishes in ninth place when ‘wild card’ Metro Bank is taken out of the equation. The lender is keeping pace on the product side but still stumbling on service.
Merrett says: “Accord remains behind some of its peers on service but makes up for it with good products and a good approach to affordability for its target customers.”
Strutt’s colleagues have been impressed by Accord. “After a few difficult cases it seems to be back on track,” he says.
However, one panel member says: “There is a feeling that there isn’t a sense of urgency, so although cases are going through it can be a slow process. There have also been issues whereby the affordability calculator stacks up but decisions in principle have been declined or referred.”
Clydesdale comes bottom in this survey although the panel are still rooting for it. Merrett says the bank has made some “very timely” improvements to interest-only criteria and its maximum age limit.
“These have added to a proposition that gives a greater degree of flexibility than most major lenders,” he says.
Clark says of Clydesdale: “Its recent tweaks to its interest-only criteria and sharpened rates will ensure it remains at the forefront of brokers’ minds when they are considering more complex cases that would usually result in a ‘Computer says no’ decision from a mainstream lender.”
But one panel member comments: “Inefficiencies, incompetence and a prevalence of errors and miscommunication continue to affect service. Information provided by phone tends to be incorrect and timescales are never met.”
They add that an online affordability calculator from Clydesdale would be useful.
More to do
Brokers, it seems, must still jump through hoops when submitting business to certain providers. Following the recent Bank rate cut, all eyes are on lenders to see how the reduction filters through into their rates – especially fixed rates.
However, perhaps this is not where providers’ efforts should be focused. Record-low rates may look the part but it is service and BDM support that, in the eyes of brokers, give individual lenders the competitive edge over their rivals.
WILD CARD: Metro Bank
Metro Bank was chosen at random as the wild card and has been rated alongside the other lenders. It debuts in ninth position and is an “excellent lender”, according to Collins.
“We’ve been working with it since launch and it’s a great example of how a new mainstream lender can challenge the status quo,” he says.
Hollingworth thinks it is time to stop pigeonholing Metro as a challenger bank. He says: “It’s fast become a well-recognised player. It’s shown that it’s prepared to do what it takes to grab share, with very strong pricing in recent months.”
Merrett says Metro Bank offers a good all-round proposition and products, “particularly longer-term fixed rates and large loans, interest-only and self-employed”.
However, Sheppard says: “Our previous BDM left Metro in the past couple of months and this has immediately had an effect on our confidence. The BDM was always on hand and losing him is a massive blow. Metro has an appetite to lend but this does not always carry over into the underwriting side of things.”
Clifford uses the lender when he cannot place elsewhere. “There can be issues during application due to unclear criteria and further document requests. Its BDM is helpful but, as with many, authority and powers are limited.”