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Yorkshire looking to long term

Our decision to continue the debate on how IFAs are paid for selling mortgages is brought about by a number of issues currently in the public domain.

The current market dynamics are fine for borrowers who are shopping around for a new mortgage on a regular basis but most of the current deals leading the market are being paid for by borrowers who do not shop around.

The trend is for more and more people to shop around but if everybody does these deals will disappear as they can only be paid for by the subsidy of the existing mortgage book.

The usual triggers for moving a mortgage are wanting a bigger house for a growing family, a job move or even a divorce.

Of course, there are people who consider moving their mortgage more often and, in fact, IFAs will be expected to offer their clients the best deal once their existing mortgage has run its term.

The Yorkshire&#39s mortgage book reinforces the view that the vast majority of our borrowers are not seeking a new deal every two or three years.

Many people would choose not to have the hassle of moving their mortgage constantly if one lender gave them good long-term value.

Many of the newer and popular flexible and current acc-ount mortgages make big savings for people over the long term, so if IFAs recommended these products we think there should be a debate about how they are paid.

Yorkshire&#39s track record of maintaining a low-standard variable rate offering flexible benefits across its product range, having no tied insurance products, no overhanging red-emption charges, moving its entire mortgage book on to daily interest calculations as well as providing attractive fixes, discounts, caps and Cat-standard mortgages will stand scrutiny by any borrower or IFA.

However, when the music stops and mortgage pricing becomes transparent, straightforward and fair both to new and existing custom-ers, we expect a low-cost mut-ual to be at the lower end of the price scale.

This will be a desirable position to reach and we bel-ieve that it will be attractive to most of our customers and we pledge to explore all means of delivering this approach to the marketplace.

One way we are investigating is for commission payments structured to rewarding independent advisers over a longer period consistent with delivering long-term value.

Procuration fees are not a substitute for products which deliver genuine and sustained value. There is no evidence that high up-front commission has acted in consumer interests in the past.

During the last financial year, we have succeeded in reducing our net interest margin to 1.07 per cent and this is believed to be the lowest of any high-street lender, therefore providing most value to members.

We recorded gross mortgage lending of £2bn (net £1bn), almost 50 per cent above the society&#39s existing market share.

It is with this track record that we want to continue the debate with the IFA market, not trying to restrict them for doing business as they see fit but saying to them that, for their clients who do not want the hassle of a constant change of mortgage prov-ider, they can come to the Yorkshire and be sure of long-term value.

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