Get grip on lenders and push mortgage advice, Kensington urges politicians

Kensington has published a rallying cry ahead of the upcoming election, encouraging policy makers to grapple with the UK’s lending problems and promote financial advice to consumers.

The lender said the government needs to support lenders of all kinds to encourage market sustainability and competition and encourage consumers to seek out advice before getting a mortgage.

The manifesto highted teh change in the shape of UK mortgage distribution with brokers eclipsed by bank branch sales. A YouGov survey suggested consumers are following best-price because they can’t get the products through brokers because 45 per cent of consumers would rather arrange their mortgage through an Independent Financial Adviser (IFA) than a bank or building society. Despite this, branch business has more than doubled since May 2008 from 28 to 58 per cent of all business in January 2010. In turn, broker business has fallen to 23 per cent of the market, down from 49 per cent in May 2008.

Keep the FSA’s hands off affordability criteria, said Kensington, and support the self-employed mortgage marketplace to make sure people have access to finance to meet their requirements. It added that the regulator should also stay away from prescribing levels of business to individual firms.

Kensington signed off promising to play its part, saying: “We will offer transparent and fairly priced products designed to meet the specific requirements of target customer groups, not headline grabbing propositions."

It concluded: "We will investigate new opportunities to design products for customers who are underserved by the dominant lenders to increase competition and diversity in a controlled, sustainable and responsible way."