With the battle of the new and established lenders well under way, can any particular lender achieve high profit margins, fantastic service and market leading rates, all at the same time? Or is this a dream, an impossible reality?
A few years ago, it was good enough to be able to offer a ‘Janet & John’ version of AIPs online. How life has changed. Technology rules the market now and 90% of mortgage business is transacted online.
Established lenders’ IT departments are in overdrive to improve their offering, to enable them to compete with new lenders entering the market. For the new kids on the block there is a lot to be said for starting with a blank piece of paper and building the system most banks would dream of. But legacy systems mean it’s an impossible dream for many of the established lending power houses.
This is the great thing about the mortgage market. The moment you stand still you find yourself going backwards and, if your not careful, out of the reckoning completely.
So from an intermediary’s perspective, the hunt for quick, smart propositions is hotting up, and we all know that service is the key to our hearts. My gut feel from a distributor’s point of view is that service matters up to a point. But it has to be matched with either market-leading products or innovative criteria.
So do intermediaries sell on service alone regardless of product? Not in my experience.
Do lenders which actively chase market share gain that by good service or jaw-dropping products?
I suggest that if a lender wants huge volume and market share, then the product is king, and only market leading rates will deliver. If a lender wants margin, then they have to deliver a superb service coupled with innovative criteria and product designs.
From a distributor’s perspective, we want the full monty to offer our members – the best products, best service and best criteria. But, can any one lender achieve the high profit margins shareholders and management demand, coupled with fantastic service and market leading rates or can this reality only be achieved by using a selection of lenders? Answers on a postcard please!
Sally Laker is managing director of Mortgage Intelligence.
The views expressed are those of the author and not those of the company she represents.IFAonline
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From 6 April 2019