Ray Boulger, senior technical manager at John Charcol, said he has noticed an increase over the past weeks in lenders launching direct-only deals. He explained that as this trend seems to be occurring among the medium-sized building societies, including Cheshire and Derbyshire Building Society, it is likely to be directly related to concerns these types of lenders are experiencing with their branch operations.
Boulger said: “There is a noticeable increase in lenders restricting deals to direct-only. Lenders will give the excuse that they have separate tranches for broker and direct deals.
“But if you look at those doing this, they are mainly medium-sized building societies. Cheshire Building Society is the latest to launch direct-only deals with its range of 15, 20 and 25-year fixed rate mort-gages. The Derbyshire has also been doing this a lot.”
“With these lenders, their branches are increasingly suffering and not getting enough business. To justify keeping them open they are providing direct deals only. Mutuals don’t like closing branches. If the lender is relying on branches, getting on the ‘Best Buy’ tables is crucial; hence this upturn in direct products,” Boulger added.
But Rob Hill, corporate communications manager at Derbyshire Building Society, said: “Generally, lenders tend to price their products according to which distribution channel they are sold through and for products sold via intermediaries the commission or procuration fee has to be factored into the rate and there are times when the margins are so fine on some direct products that they simply cannot be offered through intermediaries.”
“Frequently, lenders offer broker exclusives which are not available through other brokers or to direct applicants so this can work both ways,” he added.
