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X marks the spot

The UK&#39s biggest mortgage lender, the Halifax, can certainly not be accused of avoiding controversy or keeping a low profile over the past few months.

Along with HSBC and Nationwide, Halifax hit the headlines with the Financial Services Ombudsman&#39s ruling that its dual-pricing policies introduced last year were unfair.

Insult was added to injury for Halifax when Nationwide was seen to win a publicity coup with its decision to refund a total of £90m to 400,000 mortgage customers by “applying the spirit of the ombudsman&#39s decision to all similar cases”.

About a week later, Halifax announced it was to compensate 30,000 borrowers who had complained to the ombudsman while giving nothing to another several hundred thousand customers in similar circumstances.

This move was not welcomed by brokers. Charcol senior technical manager Ray Boulger commented: “Clearly, those customers who have not been involved will be unhappy and may well decide simply to walk away.”

Not surprisingly, Halifax head of mortgages Phil Jenks is keen to play down the backlash from borrowers and intermediaries and defend its original introduction of dual pricing last year. He says: “When we introduced two rates last year, we had a great deal of support from customers – we received a relatively small number of complaints. The ombudsman&#39s decision will have no impact on new business.”

Although he puts the complaints down to a selection of “customers who felt aggrieved” he admits this may not be the end of the saga and realises that some will pursue the ombuds-man route.

But he believes lenders are being attacked for implementing a strategy intended to make the mortgage market fairer and more competitive and are being trapped with “a ruling not sen- sible in the longer term”.

Although Halifax says it recognises the need for a complaint service Jenks says the wider implications of its decisions on individual cases must be examined. “I obviously support the ombudsman scheme as it is vital the customer has a fallback and every single customer has the right to complain. We have tried to sit down with the ombudsman to establish principles but there may be nuances in individual cases.”

He also says Halifax&#39s situation was not helped by the individual involved, Mr Wright, who was more than happy to be vociferous in the media about his complaint.

Jenks says: “The reality is that the ombudsman process is meant to be private. If a public hearing was wanted, it would go to court. But the customer does not have to keep it quiet and made the debate public. The ombudsman may have to change how the process is done.”

He is adamant this blow will not stop Halifax continuing to make a big impact on the industry, commenting: “One thing we will not give up on is trying to del-iver a fairer mortgage market and long-term value.”

This approach seems to be paying off, with Halifax taking the title of best mortgage lender in this year&#39s Money Marketing awards, as voted by broker consultants.

Jenks believes this achievement partly stems from Halifax&#39s ongoing commitment to the mortgage sector and the service it offers intermediaries, who contribute 50 per cent of its total mortgage lending.

He says: “We do not dip in and out of the market. We offer sustained value and are good at servicing client needs. This reward from peers shows we are doing something right and it is good to have a lot of support from the IFA sector.”

The lender is not resting on its laurels, saying it has plans in place to improve the service offered to intermediaries, in particular, IT systems designed to give the intermediary more control.

Looking ahead to next year, Jenks is confident that HBOS as a whole can reach its target of taking 25 per cent of the net mortgage lending market, up from 22 per cent announced in its annual results this month.

He seems unperturbed about competition from the other lenders in the group, BM Solutions, the Mortgage Business, Intelligent Finance and Bank of Scotland and says: “All five compete with each but we know what segments we are strong in. HBOS is the only lender that can service every single segment.

“Halifax is the best-recognised mortgage brand in the UK. We can effectively manage substantial volumes of business and look after customers through the life of their mortgage.”

Despite a rocky start to this year, Halifax – with the substantial backing of HBOS – seems confident about the future and its dominant position in the mortgage sector. But whether its bid to increase its market share will be held back by the dual-pricing saga is still to become clear.


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