Lenders accused of new buyer favouritism

Ramesh Sharma

February 11, 2006

Alan Lakey, senior partner at Highclere Financial Services, argued borrowers would quickly lose faith in lenders who viewed new and existing clients in different price brackets. He gave the Halifax as an example. He said: “ Halifax doesn’t offer as competitive products to its existing clients, which is silly. Not only is it unfair, it also loses the lender easy business. One of my clients lost the faith he previously had with the lender and now sees it as not a forward-thinking company. This can’t be a good image to have and as a result my client moved to another lender. It’s as if they are providing existing clients with a second-rate service when they should be rewarding them by offering them the same rates and benefits for choosing them in the first place.”

However, Paul Fincham, press officer at Halifax, said the difference between deals for new and existing clients was minimal and was based on buyers’ individual circumstances. He said: “ Halifax products are designed to suit specific needs and first-time buyers, for example, will have different needs to remortgage clients. Having said that there is only a marginal difference, and some of the rates are the same.”

Matthew Wyles, group development director at Portman BS, said: “We price our maturing rates to destroy the economics of remortgaging so there’s no need to swap lenders. It’s naïve to assess new client and existing client deals because of their different circumstances.”

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