Best buy tables have been a controversial subject within the mortgage industry since they were launched by the Financial Services Authority (FSA) in 2001. Now available via many resources by doing a simple internet search, best buy tables can be viewed and compiled by seemingly any specialist or analyst.
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Literally speaking, best buy tables keep a list of the best mortgages available to buyers and are often broken into sectors. For example, if a buyer or broker wants fast access to the best rates in buy-to-let or variable rates, they simply look at the best buy tables. This is popular within consumer circles, as the best rates and fees can be viewed in a comparison chart and buyers will know what they are getting and what they can expect to pay when looking for a mortgage.
Controversy
The main controversy with best buy tables comes not with their appearance or availability, but with how lenders and products are placed in the tables. This has recently been debated at both the Building Societies Association (BSA) Conference in Bournemouth, and also on the BBC website where Kent Reliance chief executive, Mike Lazenby, has been particularly critical.
Speaking to Mortgage Introducer about the subject, Lazenby claimed that best buy tables should be regulated as compilers are charging a fee to appear in their statistics. He explained: “Financial services does not have a good record when it comes to public presentation, but there is no good reason to have an introductory offer on an account unless it is to get a higher placing in a best buy table.
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“We think that it’s wrong to charge and place people accordingly – if compilers want to have credibility then they have to include all data. The Sunday Times is representative of what’s currently good, but if compilers’ tables don’t have all the data or have misleading information then they should contain some sort of health warning. In the end it could lead to claims from consumers about the lack of complete information.
Lazenby added: “All advertising has to adhere to regulation but best buy tables don’t and are far more influential over consumers, so they should be regulated. If our products are not there, it’s because our products aren’t good enough, not because we didn’t buy our way into the table.”
Critical
At the BSA Conference, a question was posed by Adrian Coles, director-general of the BSA, about best buy tables and whether it was felt that they misled consumers on mortgage products. The panel, made up of outgoing BSA chairman and Norwich & Peterborough chief executive, Matthew Bullock, journalist Paul Lewis, Nationwide executive director of sales and sarketing, John Sutherland, and the FSA’s Clive Briault, managing director, retail markets, responded in a generally critical fashion.
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Lewis claimed that best buy tables work for car insurance and they work for cash savings because they are simple products – people who have to use those start altering their products to win the competition on the table but not on the ground, so it’s a constant arms race about how products are described. “You’ve got to not blame the tables as such, but make them right, which is why I am keen to see the total cost figures featured.”
Briault was more positive, claiming that any sort of table is more likely to mislead if taken in isolation. He said: “As an organisation which provides comparative tables, we try to link that with the information we have on our website about things that a potential borrower would be well advised to think about when looking for a mortgage. Part of its purpose is to start prompting people to ask questions rather to rely on it in isolation.”
Broker perspective
From the perspective of the broker, James Cotton, mortgage specialist at London & Country, was less sceptical and claimed that how seriously you take the contents of best buy tables depends on how they are put together. “Certain lenders do create products that are overtly targeting best buy tables and products are designed to get a higher placing. It is the responsibility of compilers to work through them to find the best buys.
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“You’ve got to look at all aspects of the deal. Some have similar rates and fees but there will be an added bonus on one specific product. It really is a case of looking at all of the aspects, as the rate is not the only importance with a mortgage. They can be useful and are a good way of giving a snapshot of what is available but it is the responsibility of compilers to ensure that they are factual and fair.”
Moneyfacts has already been questioned over its policy on best buy tables, after it was revealed that it charged £11,000 for firms to be considered for inclusion. However Moneyfacts.co.uk head of news and press, Andrew Hagger, said that any firms wanting to list information with the Moneyfacts database are asked to buy its data verification system but said that did not amount to paying to appear in best buy tables. He stated that the finances are required for the day-to-day running of the business, and by appearing in the tables gives the companies free national publicity.
Hagger also said that Moneyfacts implements its own controls and does not list any account paying an introductory bonus of more than 1 per cent or a bonus that is shorter than six months.
So where does this leave best buy tables? Certainly changes will need to be considered to ensure consumers are given the most detailed information available.
