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Independent view

Turn the clock back 20 years to 1983. The year of the Falklands, the

year Prince William was born – and those were the days when most

people were on first-name terms with their bank or building society

manager.

The clinical efficiency of telephone and online banking, for example,

was the sort of concept imagined on Tomorrow&#39s World. A recent CML

survey has revealed that while so much has changed, we still crave

the “personal” touch of face-to-face advice.

The UK mortgage market has evolved dramatically over the last two

decades. Gone are the days of the mortgage Cartel, where mortgages

were only available via building societies and a few friendly

societies. Once a borrower managed to find a lender that was willing

to offer them a mortgage, their choice of rate would consist of an

SVR and maybe the odd lifetime fixed rate.

Now the choice runs to over 4,000 products available via banks,

building societies and supermarkets, with rates ranging from fixes,

discounts, trackers and caps.

In fact, the mortgage market of the early 80s certainly seems like

something from the Dark Ages compared with the abundance of choice

that borrowers enjoy today.

If somebody wanted a mortgage in 1983, they would have to all but get

down on bended knee in order for a lender to consider their

application. Today, it is the lenders who have to go down on bended

knee in order for the borr- ower to honour them with their business.

With so many products to choose from, it is no surprise that a recent

survey commissioned by the CML stated that 79 per cent of those asked

prefer to discuss their loan options face to face. Unsurprisingly,

this figure increases to 83 per cent for first-time buyers.

With each deal on offer having it is own pros and cons to take into

consideration, the 21st Century borrower, whe-ther a novice or a

seasoned professional, appreciates a guiding hand, even if they have

to pay a fee for it.

The CML survey goes on to say that while the internet is seen as a

useful tool to seek out and research mortgages, it is still seen more

as a source of research than as a means to transact a mortgage online.

But with the advent of online banking and more and more people

using the internet to research and buy products and services, it

stands to reason that the net has an important part to play in the

evolution of the mortgage market.

There are borrowers who are confident enough of their own knowledge

of the market to feel comfortable about transacting online.

Multi-channel propositions give borrowers the choice of doing just

that, with emphasis on the word choice. As any broker knows, the

indepth advisory process is a labour-intensive face-to-face process.

It has to be – the market is that complicated.

Those people choosing to take this route would find a competitive

broker fee acceptable and reassuring (recent consumer research

continues to reaffirm that, in general, consumers are more inclined

towards paying a fee for products such as mortgages).

Those who feel they know enough of the market to route out the best

deal can choose to do so online without face-to-face advice although

they still get the same support during the process and, therefore,

without having to pay a fee.

Just as in 1983, the thought of not paying an SVR on a mortgage would

have been as unthinkable as only paying an SVR on a mortgage in 2003.

The next logical phase should mean that arranging a mortgage online

should be as natural as seeking face to face advice. One complements

the other perfectly. It is all down to one simple, initial choice –

advice for a fee or online for free?

Colin Bell is head of adviser operations at Charcol

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