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Normal service will resume

It is clear that Abbey has finally overhauled the mighty HBOS in share of the mortgage market. In happier times, brokers would have been more than pleased to see this happen as it would have meant an injection of competition and a big challenge to the presumed market number one.

In more competitive times, Abbey would often heed brokers’ calls for it to do more to catch HBOS but time and time again HBOS would simply inject a little more pace and maintain its share.

Not now, however. Indeed, if there is an analogy, it is more like a comedy sketch, where the sergeant major asks for volunteers and everyone else takes two steps back. But to put things in a more positive light, Abbey, owned by Santander, is a well resourced big financial institution which is not under any particular stockmarket pressure or indeed unfair speculation and within the mortgage market its role is now vital.

As part of this picture, it has also managed to avoid indulging itself in the sort of risky mortgage securities that nearly felled several global names.

Clearly, when a bank assumes such a role, it must be tempting to believe that it can dominate whatever channel it distributes through. A successful purchase of Alliance & Leicester will only serve to encourage such thinking.

Money Marketing would make one argument. We don’t think that the mortgage market is going to “disintermediate” long term. A type of customer behaviour has been established and although shopping around may be more difficult at the moment, we think that when a semblance of normality returns, it will still be a market very much serviced by mortgage brokers and mortgage IFAs.

More people may apply themselves to saving for a deposit than has previously been the case but we still think mortgages will be brokered. It is very likely that in a recovering market, we may see the share held by intermediaries falling but we predict that they will still take the lion’s share of mortgage recommendations two or three years hence.

For Abbey and many of the big banks, we think the smart money will regard intermediaries not just as past partners but as future ones, too.

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