View more on these topics

Lenders expect few execution-only mortgage transactions

Barclays, Aldermore and Virgin Money say they expect execution-only mortgage sales will become a niche area of the market following the mortgage market review.

Last month, the FSA published its final MMR rules.

During the consultation, the regulator proposed a ban on all non-advised sales where there was any form of “interactive dialogue” between a customer and a lender. However the final rules allow for execution-only transactions for contract variations like changing the payment method, rate switches and retention deals or porting the mortgage. High-net-worth individuals, which the FSA defines as having a net income of £300,000 a year or more, can obtain a mortgage without advice.

Speaking at the Mortgage Business Expo in London last week, FSA mortgage policy manager Lynda Blackwell admitted the regulator is concerned that lenders might force borrowers down the execution-only route. She said: “We are concerned that it could be misused so firms must keep evidence that customers who have been offered execution-only meet the requirements.”

The FSA estimates around 70 per cent of sales are currently advised.

However lenders said execution-only sales will only make up a small proportion of transactions after the MMR rules come into play in April 2014.

Aldermore managing director of residential mortgages Charles Haresnape said: “Execution-only will account for a single digit percentage in terms of sales. It will be mainly for professional people but, even then, some of these people will want advice.”

Virgin Money intermediary sales director Richard Tugwell said: “The MMR has ensured the public starts to become aware of the benefits of advice, so intermediaries can only benefit. Execution-only has become more of a niche area of the market.”

Barclays head of national relationships Sarah Green said: “Execution-only is still available for some customers but I think that will be a limited option.”


Accord Mortgages launches third 10-day sale of 2012

Accord Mortgages has launched six new fixed rate mortgages for 10 days only, with rates starting from 2.59 per cent. The products are all available up to 70 per cent loan-to-value and have a £995 fee. Accord is offering a 2.59 per cent two-year fixed rate, a 2.79 per cent three-year fixed rate and a […]


BBA board looks at merger options

The British Bankers’ Association’s board has had internal discussions about a merger with another trade body, following the announcement that it will lose its role as the administrator of Libor. The BBA operates as the administrator of Libor and issues licences for the commercial use of the benchmark rate. Following the recent rate-rigging scandal, Financial […]


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