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Mutual trends

Being a big player ordinarily makes it hard to keep your head down, yet amid an industry upheaval spurred by depolarisation, the onset of mortgage regulation and warnings of the death of mutuals, Nationwide, the world&#39s biggest building society, has so far managed to avoid the turbulence endured by many of its competitors.

As Standard Life meets the inevitable fate of demutualisation, Nationwide continues quietly to sing the praises of its mutual status and while firms such as HBOS and Abbey have already shown the first cards of their multi-tied hands, Nationwide is keeping its plans to itself, not gaining a seat on the Sesame panel, which is potentially the biggest intermediary mortgage panel in the marketplace.

But the society still has considerable presence in the intermediary marketplace, even if it has not managed to take the top slots from companies such as Abbey and HBOS.

Its newly published results reveal that Nationwide has become the fourth-biggest lender in the UK, overtaking Barclays.

With its full mortgage product range offered through intermediaries, IFA and broker business is quickly reaching Nationwide&#39s target of half of its total mortgage business.

Chief executive Philip Williamson believes much of the society&#39s clout is due to its mutuality. He says: “Our approach to mortgage pricing – with all our deals available to all customers – has found favour with many new and existing borrowers.

“Why should new borrowers get a better deal than those who have been with an organisation loyally for many years? Our mortgage market share is well above what would be expected for an organisation of our size and shows the success of this particular strategy.”

Head of intermediary markets Peter Laydon says the society has dedicated services for intermediaries to help them offer a fast and efficient service to clients.

Nationwide recently won the Money Marketing Lender of the Year award, which was a surprise to some, given that the society was the bane of many brokers for years as it refused to pay procuration fees.

However, Nationwide has since given up this position which has helped improve relations with advisers and its decision not to engage in dual-pricing has also increased its popularity.

Laydon says there is no product differentiation between what is offered through bran-ches or through intermediaries. He says: “Intermediaries can conduct business with us through various channels by either going through one of our branches, through one of our mortgage centres or by submitting applications online.”

The society&#39s current base mortgage rate is 5.39 per cent which is around 0.75 per cent less than the standard variable rates of most other high-street firms. To sweeten the deal, Nationwide offers a free legal service for remortgage customers, a range of flexible features and daily interest as standard across all its mortgages.

Laydon says: “Our mutual status means we can offer products with lower fees and charges. For example, we do not charge mortgage indemnity guarantee, unlike many banks.”

Although the downside is that Nationwide offers loans up to a maximum loan to value of 95 per cent, it believes this is “the most prudent way of doing business”.

Laydon says the society has a long-term approach to building relationships with brokers and has implemented systems to streamline admin processes.

Feedback from intermediaries has led to the creation of a premier service unit for big mortgages.

Laydon says: “The PSU gives intermediaries direct access to underwriters specifically trained with the expertise to process large loans quickly. This means that we can offer introducers a personal service from the first phone enquiry through decision in principle, packaging and approval.”

Nationwide also has a priority service for online case submissions specifically designed for the intermediary market called Mortgage Trading Exchange. The system is designed as an integrated approach for sourcing, compliance and transaction.

Laydon says: “This was set up a year ago and has been hugely successful. It is a great example of how we have listened to intermediaries&#39 needs and set up a specific team to deliver everything they need.

“We also provide intermediaries with a takeaway remortgage service which contains a guide to take borrower through the remortgage process and provide a quick and easy remortgage service.”

Laydon will not be drawn into a debate over the pros and cons of multi-ties. He says Nationwide has been looking at the various sectors – networks, mortgage clubs, high-street competitors – and says it is comfortable with the relationships it presently has with intermediaries.

Laydon says: “Our product range and intermediary services have been hugely successful and given that we are already on track for depolarisation, there seems no reason for too much change in how we work with intermediaries.”

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