The latest pantomime villain appears to be the recently formed Concordia. Press coverage of its conception has been balanced in the main although some misinformed reporters do appear to be the subject of gerrymandering from non-competitors of Concordia which say it is intent on mortgage world domination by 2010. This is, of course, complete tosh.
First, what is Concordia? Answer – it is a collaborative. Note, not a mortgage club, not a network and certainly not a cartel.
The more interesting question for lenders, however, is what does it represent? This is where I can understand why the sanctimonious insecurities of certain intermediary businesses are surfacing .
Concordia represents over 300 practitioners who individually broker 30m of business a year in a very compliant and professional environment. More to the point , this distribution capability is actually owned, that is, unlike most networks and clubs, these consultants are majoratively employed by the five profitable and consumer-facing businesses and the 300 consultants themselves influence a consumer base comprising almost 100,000 of the UK’s most prosperous and property-investing individuals. The uncomfortable truth is that there is no other single business or group of businesses in the UK mortgage market which possess those potent characteristics.
Quite apart from the fact that a 10bn annual loan delivery in a market worth 345bn is pretty inoffensive, commentators are well wide of the mark in suggesting that the Concordia agenda is all about securing outrageous procuration fees. It is not. It is about a fair procuration relationship and also about inviting lenders to streamline their premier operations and to develop a single and cogent service strategy for five burgeoning businesses.
If that ignites value chain reviews elsewhere, then so be it. Ultimately, lenders are discerning enough to make their own conclusions as to which distribution models are in the ascendancy and which are in decline and they will certainly have been pleased to read that one national brokerage is so happy with its procuration arrangements that it will not be seeking a review of these – what an early Christmas present that was.
Kevin Duffy is managing director of Hamptons International Mortgages