The FSA has warned funding pressures in the mortgage market could mark a return to aggressive dual-pricing strategies being adopted by lenders.
In its retail conduct risk outlook paper, published this week, the FSA says weak economic growth, falling house prices and reduced levels of mortgage funding combined with fears of unemployment and tight credit conditions made it hard for mortgage intermediaries to stay profitable, with numbers dropping by 10 per cent last year.
“Additional funding pressures in the mortgage market have the potential to trigger a return of the aggressive dual-pricing strategies seen in 2008,” warns the regulator.
Emba group sales and marketing director Mike Fitzgerald says: “We could well see a return to lenders favouring direct business. If lenders get closer to brokers and networks in these hard times, they will reap the rewards when things get better.”