Halifax did a massive £14bn of intermediary mortgage business last year and it is now doing 90 per cent of the business electronically.
Head of intermediary markets Jack Saxton believes this level of business shows the company's commitment to technology is paying off. He says: “This is a phenomenal level of business to be doing online, particularly as the maximum possible is not 100 per cent, as some business, such as shared ownership, cannot be done electronically.”
Halifax demutualised in June 1997 after a merger with Leeds Permanent Building Society in August 1995. At the time of demutualisation, the company was valued at £18bn and a merger with Bank of Scotland in 2001 to create HBOS means the group is currently worth £28bn.
Figures from the Council of Mortgage Lenders show that in 2002, HBOS had an estimated 26 per cent market share and £56.8bn of gross mortgage lending, significantly ahead of its closest rival Abbey, which had 10.4 per cent of the market and £22.8bn in gross mortgage lending.
The biggest issue faced by Halifax at present is how its distribution will change with the onset of mortgage regulation in October.
“We expect the UK intermediary distribution map to change, both this side of regulation and once it kicks off,” says Saxton.
He reveals that Halifax is in the process of consultation with most national intermediaries, who are debating the pros and cons of a whole-of-market offering as opposed to a panel.
Saxton says: “We need them to go through this debate first before we can start negotiating over products and service fees.”
Halifax has also launched a programme of intermediary forums to let intermediaries know what it is doing on regulation. Saxton explains: “We see these forums as total collaboration with our key partners. We are also likely to be supporting a number of key intermediaries in their own roadshows in the coming year.”
A concern of many intermediaries at the moment is the issue of the key facts illustration and where responsibility for its accuracy lies. Saxton believes Halifax has the solution by offering KFIs via its technology link. “Intermed-iaries who deal with us can come directly through to our website and obtain a totally accurate KFI.”
He says he can guarantee complete accuracy if the intermediary comes to Halifax either directly or via Mortgage Brain (which is jointly owned by Alliance& Leicester, HBOS, Nationwide, Northern Rock, Royal Bank of Scotland and Woolwich). Halifax is working on a solution for intermediaries who want to get an offline KFI.
The firm is also working on getting life data to prepopulate mortgage systems. Saxton says last year's deal between Mortgage Brain and The Exchange, which brought tog- ether two leading platforms in the life and pension and mortgage markets, is a big step toward this.
But Halifax itself has started talking to major life offices to do a similar thing: “This has not happened yet but we are in serious debate about it,” says Saxton.
Further plans for the future involve the launch of a fully flexible mortgage, which Saxton describes as “a halfway house between a normal mortgage and an offset”. Halifax has not included a single fully flexible product in its range before and Saxton says this move stems from intermediary demand.
He is keen to extol the benefits of the new build market to intermediaries. Halifax has been in the market for nearly five years and has specialist new build managers who develop products for builders and intermediaries.
These managers are running workshops for intermediaries, telling them that new build is a channel they could be tapping and explaining the workings of what Saxton describes as”a completely different market”.
Leading mortgage brokers have been saying for some time that HBOS's closest rival in the mortgage market, Abbey, needs to start providing greater competition for the overall health of the market. Abbey does appear to have taken action, with the launch of a new range of products along with a new unit dealing with large loans.
Saxton says: “We keep a watching brief on all our competition but we do not look over our shoulder to see what the competition is doing – for one thing, this does not work and for another we plough our own furrow.”
He sings the praises of Halifax's own Premier loans unit for large loans: “We do more work with this in the City than some building societies do in the whole year and 95 per cent of all these loans are traded electronically.”
“What is really important is what the intermediary wants. We have keenly priced products, an effective service proposition, and we work closely with intermediaries. We have had a really successful year.”