View more on these topics

Rate of change

Despite the distinct scent of spring in the air, the broker community has taken some body blows these last few weeks. Many favoured lenders have adjusted criteria in ways that in certain instances make little sense, dual-pricing has made a comeback and the fiasco surrounding the “funds booking” of one particular lender has reduced grown men to tears.

However, amid all these body blows comes one of the most positive game-changers we have seen for years – a significant increase in some lenders’ standard variable rates.

Increases from Halifax, RBS, Bank of Ireland, Clydesdale and Yorkshire have all hit selected borrowers hard and the somewhat unbudgeted result of this is that they have picked up the phone to speak to us again.

It is a moment many brokers had thought would only ever happen again virtue of an increase in the base rate (which, let’s be honest, looks like it could be some way away), so the decision to increase SVRs has been greeted with controlled optimism by most brokers, even though such borrowers will, of course, rue their own misfortune. It is a gift horse that must not be looked in the mouth.

The savvier brokers will already have been delving back into their client management systems and recovering all Bank of Ireland clients. That particular hike of 1.5 per cent will be crippling for some, even if it is sensibly phased over two stages.

“The decision to increase SVRs has been greeted with controlled optimism by most brokers”

Equally, for some unknowing Halifax borrowers that have been enjoying 3.5 per cent variable with no ties and no fees, life is going to become a little more challenging now.

Conditions for brokers really will be reminiscent of the pre-crunch times wherein a broker can research the market and save clients some money.

But perhaps the greatest fillip of the standard variable rate increases is in the lenders that have chosen to do it. RBS, Bank of Ireland and Halifax are all lenders that might have clients with a somewhat complex make-up.

The type of mortgage that the likes of Yorkshire perhaps or even First Direct offer mean they may not be able to do so. This affords the broker a much greater hope of conversion and, with it, justifiable fee-charging.

In the midst of such a tough month in our industry, we must not let the opportunity that has now arisen go begging. What was looking like a very flat year in terms of earnings could now start to look very different. But only if, and this is the key, we have maintained our client relationships and, most important, our client management systems. Brokers who did not invest wisely in such systems will doubtless come to regret not doing so.

Kevin Duffy is the managing director of Mortgageforce

Recommended

5

FSA: Failed bank bosses could be banned from top jobs

The FSA is putting together plans which could see former directors of failed banks being banned from running financial institutions. The regulator’s business plan, published yesterday, says the FSA will is looking at a number of ways to make it easier to refuse an approved persons application. The FSA will set these out is a […]

MPs want universal charging structure

The pension industry must develop a “clear, accessible and universally adopted” charging structure by the end of 2012. In its report on auto-enrolment, published last week, the work and pension select committee calls on the industry to introduce a universal charging structure and set up comparison websites. Speaking to Money Marketing, committee member and Conservative […]

6

Martin Bamford: Everyone has an agenda

A criticism that is often levelled at those who share their opinions on these pages is that they have an agenda. That we all have a vested commercial interest in the views we express should come as no surprise to anyone. Looking at some of the recent scaremongering attached to the new definition of independent […]

Royal London holds annual with-profits bonus rates

Royal London has held annual bonus rates across the majority of its with-profits products as the provider announced an increase in final bonus payouts. Annual bonus rates for Royal London policies have been held at 0.5 per cent for both single premium and regular premium business. Final bonus rates for Royal London single premium and […]

Thumbnail

Case study: administration — managing group life schemes

Our client leads the global market in high-tech electronics manufacturing and digital media. The trustees of the company’s final salary pension scheme insure death-in-service lump sum and dependants’ pension death benefits for active employees, as well as dependants’ pension benefits for deferred members (those who have left service).

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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

    Email: customerservices@moneymarketing.com