There are deals and agreements but there is also competition – sometimes cutthroat. When times are difficult and money or customers or indeed mortgage deals are scarce, things may get even more cutthroat and the relationship between lender, distributor and borrower will also inevitably come under strain.
In such a climate, several big mortgage networks and clubs last week called for understanding of the position lenders are in from distribution, that is, mortgage brokers and mortgage IFAs. They asked that brokers do not level charges of treating customers unfairly at lenders inundated with demand for what mortgages they have on offer.
Last week, we called this a brave stance. We still think so despite criticism from some other networks and some brokers. The difficulty lenders find themselves in is that when they offer a rate which is clearly a good deal they are overwhelmed so rates or indeed full ranges get withdrawn very quickly to the ire of brokers. Even more controversially, some lenders may decide to concentrate on their direct offering because at least they can control the demand.
Money Marketing sympathises with the lenders up to this point. We do not sympathise with lenders which are simply playing this market in such a way so that they and they alone benefit. And that is not a moral argument.
Lenders are allowed to be selfish but it would simply be plain stupid to stitch up their distribution. It would also be extraordinarily stupid to create such a mortgage drought that house prices begin to contract sharply and a significant minority of borrowers find themselves unable to service debt.
We think that some of the big high-street brands are going to have to display leadership, too. But, most importantly, the Government and the Bank of England must show their determination to sort this out and an understanding of the grim consequences of a hard landing for the housing market caused by a lack of mortgage loans.