Yorkshire Building Society is pledging to introduce trail commission on mortgages in a move which could revolutionise the way IFAs are paid by lenders.
In a bid to keep borrowers who are becoming increasingly aware of the ben- efits of shopping around for competitive rates, York-shire says it wants to “rew-ard intermediaries who encourage a long-term commitment to lenders”.
The society believes that all lenders will eventually have to make a similar move to survive.
IFAs welcome the society's pledge, saying it was only a matter of time before one of the major lenders took action.
They claim the move by Yorkshire could force rival lenders to adopt the same commission policy to avoid losing market share.
Yorkshire says it is too early to release details of how much the trail commission is likely to be and whether it intends to abolish up-front procuration fees entirely.
London & Country mortgage specialist David Holl-ingworth says: “This is the natural progression of a lender trying to maintain its borrowers by recognising the part that brokers play in the process.”
Pretty Technical Partnership partner Kim North says: “Brokers will welcome a move in this direction because they need incentives to sell mortgages as the market becomes leaner. Trail commission is the future.”