Sunday 20 June 2004 marks 100 days since the publication of Professor David Miles’ report on the UK mortgage market which recommended that mortgage lenders ‘make their full range of products available to all borrowers.’ Nationwide Building Society has called on the mortgage lending industry to follow this recommendation of Professor Miles as a matter of urgency.
The failure of the Government, the FSA and the industry to respond with any detail on how it intends to take forward Miles’ recommendations is hitting consumers in the pocket. Despite criticising the current mortgage pricing structure, most lenders have failed to take the easy option presented by Professor Miles of making their full range of products available to all borrowers. This failure to act is costing the UK consumer around £1 billion a year.
Nationwide’s mortgages have been available to all new and existing borrowers since 2001 and its fully flexible Base Mortgage Rate (BMR), is around 0.75% lower than most competitors — this has saved Nationwide’s borrowers around £500 million over 3 years.
Stuart Bernau, Nationwide’s executive director, said: "With interest rates continuing to rise, it is even more important for mortgage borrowers, especially those who have been loyal to their existing lender, to receive fair value. If not, they should remortgage to a lender like Nationwide, which is transparent and fair in its pricing structure.
"We call on other lenders to follow our lead and make their full range of mortgages available to all. This means accepting both the spirit and letter of what Professor Miles said in his final report. For example, some mortgage lenders purport to make their full range of mortgage products available to all but when customers try to take advantage of this they find themselves charged for transferring to the new product.
"For Nationwide Building Society, ‘available to all’ means treating existing and new borrowers in exactly the same way. We have shown that it is possible to play fair with customers and win and we urge other lenders to follow suit.
If they don’t, it is the consumer who loses."
