A leading national broker firm has warned that a return to dual pricing could destroy the years of goodwill that have been built up between lenders and brokers.
Just Mortgages has reacted to feedback from its brokers that some lenders are reintroducing dual pricing following more than a decade of goodwill between brokers and lenders being built up.
The company says dual pricing, the practice of lenders undercutting the products they offer borrowers via brokers to clients already introduced to them by the same intermediaries, fell out ouf favour over a decade ago when 'lenders recognised that they needed to work with and not against brokers' - not least because the majority of mortgages in the UK are arranged via brokers.
Just Mortgages claims that introduced business benefits lenders in many ways, including the professional presentation of a packaged case, liaising with brokers regarding service levels and the ability to launch and pull products quickly by communicating this to the market via the intermediary community.
“This really does feel like a return of the bad old days when there was conflict rather than co-operation between lenders and brokers," John Philips, national operations director at Just Mortgages, commented.
“Over the past decade brokers and lenders have worked so incredibly hard to develop terrific partnerships and mutually beneficial relationships and to throw that away to avoid paying a fee for professionally introduced business seems very short-sighted. The majority of mortgages in the UK are arranged via brokers and I suspect that any lender introducing dual pricing will suffer something of a backlash.
He added: “Perhaps these rumours are just rumours but if they are not then I'm struggling to understand why a lender would want to be known as ‘anti-broker’ as that is exactly what will happen if they go down a dual pricing route.”
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