The Post Office is considering offering mortgages in an attempt to expand the range of financial services products it offers, according to market analyst Datamonitor.
In a comment note responding to industry analysts, Datamonitor said: ‘The appeal of a Post Office mortgage is limited and it is unlikely the new mortgage products will provide the solution for its current financial malaise.’
A Post Office spokesperson said: ‘We will not be selling mortgages in the short term, but it was something the Post Office’s chief executive, David Mills, talked about to illustrate the types of financial areas we are considering moving into. As yet, no timeframe is in place for such a move.’
Following the failure of Consignia, the Post Office is under financial pressure and is prepar-ing to expand its services to generate revenue. Having lost £163m this year, it will face further financial strain when the Government implements automated benefit payments, replacing over-the-counter cash transfers traditionally managed by Post Office staff.
Datamonitor pointed out that customers prefer to be sold a mortgage face-to-face and that Post Office staff are not mortgage advisers. The report said: ‘Should it restrict itself to purely facilitating monthly payments for pre-arranged mortgages, the Post Office may have a role to play.
‘However, it is debatable whether the kind of customer that prefers to pay their mortgage over the counter in cash every month is typical and if so, they are likely to be insignificant in number.’