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This week in Mortgages

Poor old Woolwich got a good kicking this week from the Building Societies Association.

The BSA described the lender as a “brand in great decline” and said that it is failing its customers and being outshone by smaller
building societies.

It is true to say that on the intermediary side, Woolwich has had its problems with service, and Barclays chief executive John Varley said at the start of the year that its performance in the mortgage market had been poor.

But having spoken to a number of influential brokers, most see the BSA’s dig as a little harsh on Woolwich, especially as it is still bringing quality products to the market, and some say its service is improving, albeit from a low starting-point.

The BSA’s anger is largely a result of the decision to close all Woolwich’s branches and have them rebranded as Barclays. That would suggest that from a high street perspective, Woolwich is more than a declining brand: it is a disappearing brand.

But the remarks have resonance in the broker market as the BSA has attacked the very culture by which Woolwich has been run since its demutualisation in 1997, and its subsequent overall service proposition.

Not surprisingly, Woolwich hit back and tried to demean the BSA by likening it to struggling football side Norwich City, while simultaneously and confidently comparing itself to Arsenal, whose roots lie in the south London district of Woolwich.

This debate has been heard before about comparing lenders to football teams, after Pink Home Loans managing director Tony Jones likened HBOS to Premiership Champions Chelsea, but as harsh as the BSA comments were about Woolwich, if you consider that Norwich City owner and celebrity chef Delia Smith this week sacked the team’s manager Nigel Worthington, it makes the subsequent comments about the BSA a tad over the top, as BSA director-general Adrian Coles is by no means being shown the door.

While the BSA and Woolwich wrestle it out, and no doubt a few heated exchanges have been shared between the pair this week, elsewhere in the market, it was all change at the top of two of the UK’s
largest lenders.

Royal Bank of Scotland Intermediary Partners has made Caroline Marsh its chief in the role of head of intermediary mortgages. She replaces David Jones, who held the title of commercial director while at the helm of RBSIP. He has left the financial services industry altogether.

Head of business partnerships Louis Kaszczak, who was a vital cog in the development of First Active, has also quit the RBS group, with
Jayne-Anne Gadhia becoming MD for RBS mortgages.

At HBOS, mortgages director David Nicholson is to take over as retail distribution director and a replacement is expected to be announced shortly.
Nicholson replaces Rob Devey, who is moving to HBOS’s insurance and investment unit.

This week also saw the Bank of England deciding to keep interest rates held at 4.75 per cent for the second month in a row, although many commentators expect a rise next month to 5 per cent, which would certainly provide a test for a market that remains in a buoyant mood when it comes to the current levels of mortgage approvals.


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The mist clears

Here we are in October – that most unpredictable of months. Big stockmarket shakeouts happen in October. The Great Wall Street Crash of 1929, the Yom Kippur war in 1973, Black Monday in 1987 – all happened this month. This is meant to be the season of mists and mellow fruitfulness. It is also the month when seasoned investors are on the lookout for banana skins and the fact that, at the end of September, Wall Street reached its highest levels since 2000 will probably heighten investors’ nervousness.


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