View more on these topics

Co-op exit is bad sign for interest-only sector

Brokers fear more lenders will pull out of interest-only lending after the Co-operative Bank announced it is pulling out of the market for residential mortgage customers.

Last week the Co-op said that from this week, residential mortgage customers can only take out mortgages on a capital and repayment basis.

The change will not affect existing interest-only customers, who can switch to any open product for the same amount of borrowing on an interest-only basis when they come to the end of their deal. They also have the option to port their existing interest-only mortgage.

The changes apply to mortgages offered through the Co-op’s lending subsidiary Britannia and residential mortgages through Platform, the intermediary mortgage arm of the Co-op, which will continue to offer an interest-only option on BTL mortgages.

Lentune Mortgage Consultancy director Stuart Gregory says: “Once one lender makes a move like this, others will surely follow, making the situation worse for those who already have interest-only mortgages as there is less choice to switch deals.”

Emba group sales and marketing director Mike Fitzgerald says: “It only takes one move like this for other lenders to sit up and think about how they are going to approach interest-only. I have a feeling we could see more lenders following this route over the coming weeks.”

In the past two months, ING Direct, Leek United Building Society, Leeds Building Society, Nationwide Building Society, Coventry Building Society and Newcastle Building Society have all cut their maximum lean to values for interest-only lending from 75 per cent to 50 per cent.

Skipton Building Society cut its maximum LTV from 75 per cent to 60 per cent and Principality Building Society restricted its interest-only lending to three products but kept its maximum LTV at 85 per cent.



FoF and ethical fund sales fall as trackers win inflows

Net tracker fund sales reached record highs in the opening quarter of the year, although funds of funds and ethical funds witnessed a fall in popularity. According to the Investment Management Association, net retail sales of trackers amounted to £661m – up from £528m one year earlier and the highest seen by the association since […]

FSA backs campaign against chasers over charges

The FSA is backing the Which? and Moneysaving- campaign against claim firms that charge consumers a fee without telling them they could claim for free. The campaign seeks to address confusion after research showed one in four people was unaware that claim firms charged a fee. Around three-quarters of payment protection insurance claims come […]

US tech firm iPipeline acquires Assureweb

American technology firm iPipeline has completed the acquisition of quotation portal Assureweb. Money Marketing revealed in March that iPipeline was set to buy the firm from shareholders Prudential, Aegon, Friends Life, Scottish Widows and Aviva. Assureweb is one of the three main quotation portals used by advisers alongside Avelo and Capita’s Webline. iPipeline is based […]

Willis Owen scraps price pledge after trail payback

Willis Owen has ditched its price pledge offer for investors after returning the trail commission to investors in half of the funds involved in the offer for the past year. The firm launched its price pledge offer in February 2011. It promised to refund the trail commission to investors if the value of the fund […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm