Compare and contrast football match of the 1970s to the recent Euro championship and you would be forgiven for thinking you had watched two completely different sports.

Dangerous tackles and even fist fights back in the 70s would lead to little more than a mild rebuke from the referee; these days there would be a straight red card. And what would goal line technology have made of Geoff Hurst’s second goal in 1966?

Whilst football fans of a certain age may moan “It wasn’t like this in my day”, we have to accept the game has changed for better or worse and things are very different now. It is the same in the mortgage world – but I sometimes wonder whether all lenders have come to realise just how far things have moved on?

With access to so much more information at their fingertips, clients rightly expect brokers to recommend the cheapest possible deal for them on the day of application. This is why I’m baffled that of the big players, only Nationwide seems to have nailed the art of product reservation.

First time buyers 

This really comes into its own in a rising interest rate environment. If Nationwide is there or thereabouts at point of AIP and the case fits, why take a chance on losing out on a rate that could be secured in advance by looking elsewhere? We happen to deal with a lot of first time buyers here at UK Moneyman and I’m not surprised to see Nationwide’s market share of our cases growing and this USP is one of the reasons why.

And then we have the smaller lenders from the top six downwards. In the last few years, we have seen the flash sale style of fixed rate mortgage pricing, where a smaller lender puts a deal out there only for it to be withdrawn a week later to understandably protect their service levels.

Our mortgage club Paradigm recently approached us so say a non-top six lender was thinking about launching a particular rate and if they did, did we think it would fly off the shelves. The lender wished to remain anonymous, but whereas before my answer would have been an unequivocal “Yes this will sell”, I had to qualify my reply with “but it depends which lender you are talking about”.

This is because these days when a broker firm sees certain lenders up at the top of the sourcing, they know that it is likely to be what I call a ‘mortgage mirage’. In other words, there’s little point in an AIP unless the client is ready to proceed there and then as you know full well that the lender will be nowhere to be seen come the point of application.

I’d like to put a big shout-out to Accord Mortgages in terms of a lender that I think is getting a lot of things right at the moment. Our advisors like working with this lender and when we had a recent visit from our BDM, a very intelligent debate took place about product pricing.

We had some advisors saying: “If you could be just that bit cheaper we would use you more” and others saying “I don’t want them to price more aggressively because their service might suffer”. I was really proud of my team at that moment as I felt it showed a high level of understanding of this balancing act that lenders are grappling with.

Focus on niche areas

Rather than compete on pricing (which is only going to be temporary) I wonder why more non-top six lenders don’t take a leaf out of Accord’s book and look for all the niche areas where the bigger players are less strong.

For example, a capped rate product would have worked really well this year but none have been forthcoming and hardly any mainstream lenders play in the self-employed for one year space. Maybe I’m wrong, perhaps these lenders are happy to do their lending quota in a condensed period and then be absent for a while?

Lenders could tap in very easily to these markets by asking broker firms where the gaps are, we would be only too happy to help. There are a lot of experienced brokers and firm principals out here and maybe a quicker way to resolve some of these new issues would be for lender policy-makers to reach out to those working direct at the coalface a bit more. For example, focus groups could be set up very quickly via Mortgage Clubs via video meetings where ideas can be shared.

I do worry that if these smaller lenders fail to adapt to the changing environment, the market could move more and more towards the bigger players and few would agree this would be a good thing for consumer in the end.

Malcolm Davidson is managing director of UK Moneyman