This week Mortgage Solutions’ experts addressed which lenders had got it right and most impressed them since launching – the answers might surprise you.
Jeremy Duncombe, director of Legal and General Mortgage Club, credits several lenders with engaging with the market pre-entry and ensuring good service standards.
Paul Flavin, managing director of Zing Mortgages, suggests a new middle tier of the lending market has had a significant impact.
John Coffield, head of Paradigm Mortgage Services, believes an already established lender has re-entered the market as a new force.
Legal and General Mortgage Club has launched with 20 new lenders over the past 18 months. While this is great for choice and for the customer, not every new lender will be able to make their desired impact.
Irrespective of size or ambition we offer all our new lenders our full support and encourage their full engagement in the market.
Those that succeed will spend time really getting to know distributors, brokers, our account managers and mortgage support services team.
This will help them to explain their proposition and using our expertise, help get them to market in the most effective way.
New lenders such as the Post Office, Tesco, TSB, Bluestone Mortgages and most recently Vida Homeloans have all had great successes.
What these firms have done may seem simple, but they all have the basics in place; service, sales support, products, criteria and have executed them brilliantly.
However, the focus should not just be on new lender launches. How existing lenders continue to evolve and react to the changes in the market is equally as important.
Congratulations should also go to Virgin Money, Accord Mortgages, Leeds Building Society and Metro Bank for how they re-launched their propositions.
They talked to the market and asked us for our recommendations about what was missing from their propositions; a prime example of engagement and partnership which rewarded them all with a great success.
I couldn’t single out one particular lender, but an area that has intrigued me is the complex prime resurgence.
There’s been a real shift in the mortgage arena with a third tier being added.
Pre-credit crunch there were two basic tiers, the high street offering prime coverage (even allowing for minor blips), and then sub-prime.
Now we have three tiers, which are high street (now accepting only vanilla cases), the traditional complex prime providers, and slipped in the middle is now this near-prime layer, which more and more people are fitting into.
We can almost class this new banding as the “blip” tier. It’s there for those people who have had a minor blip which is now enough to be declined by traditional high street choices.
With the amount of people with County Court Judgements (CCJs) increasing at 25% per year, but the average amount the CCJ is being issued for falling from more than £3,000 to around £1,500, this middle tier is a real growth area.
This is not the domain of the serial offender but designed for those with the one-off incident.
Pepper Homeloans told me recently that almost 85% of their lending was for their prime product range.
This new tier would have normally been swallowed up by high street lenders but now it would seem the only flavour being offered by the high street is vanilla, at a time when life is forcing more people to look for Neapolitan.
I’m probably going to get in trouble for this choice of lender because it’s not technically a new one – in fact it’s been around for more than 150 years.
However, I think it has effectively relaunched its intermediary lending proposition during the last few years and is subsequently a new force on the scene.
That lender is Kent Reliance for Intermediaries.
As a distributor for directly authorised (DA) firms, Paradigm has been incredibly impressed by how Kent Reliance has embraced the DA marketplace. Previously, it was a lender that appeared to work extensively through the packager market, however it has reconfigured its offering and our members have certainly benefited from this.
Also, given this highly important time – with the Prudential Regulation Authority’s portfolio lending underwriting changes soon to be introduced – Kent Reliance has been a lender absolutely committed to clarity and precision in the buy-to-let area. Plus it offers quality (and realistic) criteria on its buy-to-let range.
Given the increase in business levels, its service levels have held up strongly and its whole engagement with our members has gone up a level, with more business development managers out on the road.
All in all, it’s a level of performance that we wish could be replicated by all lenders.