In last week’s issue of Mortgage Introducer, Chase De Vere Mortgage Management director, Nick Gardner, pointed the finger at mortgage lenders for offering extremely wide mortgage ranges that confuse customers and give intermediaries headaches by having so many packages that it ‘requires some hardcore number crunching to work out the best product for a particular client.’
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Gardner particularly singled out Northern Rock for offering 36 two-year fixed rate offers, to which Northern Rock’s operational director, John Watson, responded: “Initial factfinding with customers identifies the type of product needed, with factors such as the amount of deposit available, affordability of monthly payments and need for fixed rate terms focusing attention on the features and benefits to be considered. These dramatically reduce the number of options to be reviewed. It isn’t the case that people look at 36 packages.”
But is Gardner’s opinion a reflection of widespread industry option? Gardner followed on his initial opinions by saying: “Several years ago when the government introduced charges, access and terms marking, it was supposed to simplify financial products. Mortgages had various simplified criteria which were supposed to make them easier for customers to get a good deal.
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“From a broker’s point of view, it is great, as people need us more than ever. But any member of the public who wants to do it for themselves may not be able to find the best deal on ‘best buy’ tables or by their own research. From the point of view of a member of the public, it has got much more complicated as lenders and market forces determine the way it goes.”
David Hollingworth, head of communications at London & Country, said: “You can look at this from a different light depending on which side you are on. Surely it is better to have more choice; lenders have more deals so there is something for everyone. There are different levels of fees with different terms to suit the need of the individual to fit their need.
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“For brokers there is a lot of number crunching that is required, but that’s their job, and while there is a lot of choice, it is good to fit everyone’s needs. The lender wants to get in on opportunities, which is why there is so many products, so it depends on the way you look at it. Would you rather have plenty of choice or a standard offering? The broker’s job is to find the best deal for their customer.”
Difficult to pin down
Although it is difficult to pin down whether having such a wide choice is a good or bad thing for the industry, the opinion that choice is good or bad for brokers seems to be apparent to an individual perspective. Meanwhile, lenders strive to offer the best and most complete range of deals to their customers to ensure their needs are met, and that there is a suitable package that is tailor made for their demand and situation.
Alex Hammond, PR manager at Kensington Mortgages, said: “The fact that there is so much choice is testament to the success and strength of the UK industry and just how innovative it is. Although the amount of choice can be baffling for some customers, we want them to feel free to get some independent advice and brokers need to be conscious of the market. The great thing for brokers is that consumers are not equipped to make choices and they can ensure that they make use of their service.
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“Just because there is lots of choice, the deals need to be clear, lenders cannot make them too complicated as that will drive consumers away.
As long as lenders are clear, choice is great for brokers and customers. But if they are both confused and need to be guided through the maze, they can go via a packager who can give them the tools to help them find the right deal.”
Carol Wright, media relations officer at Halifax, added: “Halifax offers a variety of competitive products to target various segments of the market, whether home mover or first-time buyer. When it comes to mortgages, individual’s needs can differ greatly. All the products within our suite are developed with the needs of both borrowers and advisers in mind.”
With these opinions considered it is clear that there is no right or wrong answer to the dilemma raised by Gardner, but as Hammond points out, the amount of choice is representative of the strength of this country’s mortgage industry, and if intermediaries are getting work from the amount of choice and customers are getting deals specifically suitable to them, it can only be positive.
