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