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Your Views: We need to stand up against ‘cartel’ of lenders


AMI needs to stand up against ‘cartel’ of lenders
Last week we reported that five major lenders had ruled out introducing procuration fees for retention cases. Brokers were keen to express their dissatisfaction online:

So, basically, lenders are not only happy to pay proc fees at 2008 rates (even though broker workloads have increased) but they also do not value the work brokers put in to retaining clients for them.

Lenders are acting like a cartel and holding down broker remuneration. It is time for the Association of Mortgage Intermediaries to step forward, I feel.

There is a lot of empty rhetoric about being ‘intermediary friendly’ from lenders in many cases. They may not like the percentage of the market that brokers have and would rather we did not exist in many cases, but they are playing a risky game when they cannot offer anywhere near the same level of service brokers can.
Stuart Gregory

In reply to Stuart:
Pity the customer
What you may be seeing is some 2008 thinking here.

Retention was never on the agenda for many intermediary lenders then and it is difficult to see some leopards changing their spots. Let’s face it, some of the people running intermediary arms have never heard of retention; they are used to the world of churn. But it is a very conflicted and divisive subject.

I pity the customer in all of this. They want certainty.
Tom O’Connor

A dying breed?
It is the difference between hair and fur choosing a lender these days and with lenders such as those paying retention fees very much up there and in the mix, the half of lenders not contributing to the broker and client relationship can sit back and watch their market share dwindle.
Chris Hulme

Combating ageism is only the first step
Last week, Mortgage Strategy reported that banks were trailing building societies in terms of lending to older borrowers.

There is a chasm between lending to normal/state retirement ages and lifetime mortgages. The issue is not just with lenders looking to lend to ages at which clients can reasonably expect to work in their chosen profession, it is also a lack of product/criteria development for those clients between “earned income” assessment and lifetime mortgages.

This gap seemed to have been filled quite neatly in the past with the Halifax Retirement mortgage, which was essentially an open-ended interest-only mortgage. Given a choice of that or lifetime mortgages, there is a number of borrowers who would comfortably fit affordability on the former.

Well done to the lenders taking this seriously and looking at the real world. Lending to older ages using earned income is part of the story but is not all that needs to be done.
Name supplied

Is the playing field level for first-time buyers?
If the Chancellor has got it right, a steady stream of new first-time buyers should be entering the field of play.

However, there is plenty to suggest there may be mitigating factors which may not play so conveniently into the first-timers’ hands.

The recent house price index from Halifax takes the average home up over £214,000 in the first quarter of 2016, meaning a £21.4k deposit requirement if you can secure a 90 per cent LTV mortgage.

For significant numbers of potential first-timers, it is simply unachievable. Not forgetting, of course, that high-LTV mortgage supply appears to be less of a priority for both the Government and the bigger lenders who are slowly inching away from the Help to Buy 2 scheme before it ends.

The big question is how does the Government match up its crackdown on buy-to-let with its ambition to make it easier for first-time buyers to secure their first property, especially if it is not addressing high LTV mortgage supply?

The hope has to be that as we move towards the end of the game for HTB2, the Government has plans (and ambitions) for what comes next, otherwise it could all end in an early bath for first-timers.
Pad Bamford, Genworth Financial



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Major lenders rule out proc fees for retention deals

Half of the top ten largest lenders have no plans to bring in broker procuration fees for retention business. Of the top ten largest lenders by CML data, Santander, Nationwide, RBS, HSBC and Virgin Money all say they have no plans to bring in retention proc fees. Lloyds, Barclays, Cambridge Building Society and Clydesdale already […]


Coventry also eyeing proc fees for retention business

Coventry Building Society is the latest lender to announce it is considering paying brokers procuration fees for retention business. The lender says it is reviewing its position but has not set a deadline to make a decision. A Coventry spokeswoman says: “We are looking at this as we recognise the value of the advice that […]

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