Recently, lenders have faced criticism for pulling products at short notice as a result of the continued credit crisis, and a broker, who wished to remain anonymous, suggested that the Financial Services Authority’s (FSA) plans to fully embed TCF would fail if product innovation and choice was further eroded.
The source said: “Fixed rate deals are not the most competitive at the moment and there is a good chance that rates will go down. So I want to be able to advise borrowers on alternative offers.
"However, lenders seem to be scared to offer anything that is not set in stone and many have pulled their tracker rates, or made them uncompetitive. How am I supposed to give the borrower choice if there isn’t any?”
James Carter, principal at Independent James, added that he had seen a marked change in lenders’ product criteria. “Lenders are now increasing the differential to over Base Rate rather than looking at below Base Rate as of a few months ago,” he said.
However, a spokesperson at Halifax suggested that in the current climate, lenders were being forced to reassess their offerings and what constituted prudent lending.
Marc Page, head of pricing at Halifax Intermediaries, commented: “We always try to give as much notice as possible on product launches or withdrawals.
"In a competitive environment, prices will change to reflect market conditions at the time, and hence sometimes the short notice. Where possible, we manage this through a detailed cascade to all intermediaries in advance of the change.”
