This amounted to 43 per cent of all product transfer transactions completed by execution-only – in line with figures over the previous two quarters of the year.
Data from UK Finance showed that the remaining 175,900 switches were done on an advised basis.
In total, the number of homeowners who switched products with their existing provider increased by 7.5 per cent year-on-year.
By value, internal product switching represented £43.5bn of mortgage borrowing in the quarter, an increase of 12.8 per cent year-on-year, with £25.4bn on an advised basis and £18.1bn on an execution-only basis.
Worrying trend
David Copland, director of mortgage services at The Mortgage Alliance, said: “It is disconcerting to see that 135,500 of product transfers were on an execution-only basis last quarter.
“There is a danger here that customers could end up with the wrong product for their circumstances, and this could lead to severe financial consequences for them in the future.”
He added: “What’s more is that some may be better off remortgaging – something which they may not realise without getting guidance from an adviser.”
Andrew Montlake, managing director of Coreco, added: “That fact that the number of non-advised product transfers continues to rise is a worrying consumer trend.
“Sadly this trend looks set to continue, as lenders become ever more assertive in their desire to keep hold of their existing customers.”
Advisers need to keep in touch
Ross Boyd, CEO of Dashly said advisers who made no effort to stay in touch with clients after completion were “far more vulnerable” to product transfers.
“With lenders upping the ante when it comes to targeting their existing customers, advisers need to respond and the best way to do that is to stay at the forefront of their clients’ minds.
“Play it right and product transfer approaches by lenders can be turned into just another opportunity to advise and reinforce the client relationship,” he added.
Copland added: “It is a broker’s duty to be checking in with clients regularly and reviewing their circumstances throughout their mortgage term.”
