You are here: Home - News -

BROKER VIEW

by:
  • 06/06/2002
  • 0
An exceptional product is going to attract more applications, so it is no wonder that services standards suffer, says Nick Parkhouse

Recently, I found myself in a major high street clothes retailer, in the throes of their mid-season sale. I found a couple of bargains at significantly reduced prices so I happily queued. Due to the popularity of the sale, the shop was packed and it took me 25 minutes to pay for my items.

Now, imagine a different scenario. It is late in the afternoon and I am desperate to find a new shirt for the evening’s dinner party. Had I walked into the same store and seen the mayhem inside, I would have turned straight around and headed elsewhere. The retailer next door is empty, so I hastily choose a reasonable shirt, pay and have my item bagged up within minutes. It is perhaps not my first choice, and I pay slightly more than I would have liked, but it was simple and easy and I manage to get on with more important jobs in hand. In some situations, the speed of the transaction becomes a bigger concern than the cost of the item.

This is reflective of the current mortgage market in the UK. There are some exceptional deals available at present, and often such deals involve free legal and valuation fees. But the downside for such deals in the current climate lies in the back-end processing of applications.

Lenders breeze in and out of the market and rarely does one lender persistently top the best buy tables.

When they do, it follows that they are going to sell more of their product, so the queuing time is longer. Lenders do not have a transient workforce allowing them to take on and lay off processing staff as demand increases and wanes, so the same body of people is processing cases whether lenders take 10 or 10,000 applications per week. It is simple logic that an exceptional product is going to result in an increased number of applications, hence service standards will suffer.

If you are buying a property with a three-week completion deadline, you are not going to fulfil this by plumping for the best two-year discounted rate in the market. You will almost certainly lose out. Here, what is more important ‘ the deal or the lender’s ability to fulfil its processing work fast enough for you to complete your purchase? The answer is surely the latter, and it is often worth reminding clients of this when recommending mortgages.

Sometimes, you can get an exceptional deal quickly, and it is often through assistance from a good adviser or broker with important contacts within a lender. But if you want to secure a great deal, you will often have to join the queue with all the other bargain hunters.

Nick Parkhouse is a consultant at Savills Private Finance


Tags

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @MAB_JChidgey: It's vital that action is taken so as to avert the tenure 'Leasehold' becoming discredited amongst new and existing homeo…
  • RT @OTJournalist: Problems in the free legals sector continue as one firm tells brokers not to call (and blames them for delays). https://t…
  • RT @OTJournalist: "our service to our lender clients is being affected by the high level of calls from mortgage brokers requesting updates.…
Read previous post:
Your career is in your hands

Richard Hall, head of Newcastle-based packager Best Advice Mortgage Centre, has come out with a rath...

Close