Return to dual pricing will destroy years of broker lender goodwill
Leading national broker firm Just Mortgages has reacted to feedback from its brokers that some lenders are reintroducing dual pricing after more than a decade of goodwill between brokers and lenders being built up.
Dual pricing is the practice of lenders undercutting the products they offer borrowers via brokers to clients already introduced to them by the same intermediaries.
This practice fell out of favour more than 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.
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.
John Philips, national operations director at Just Mortgages said, “This really does feel like a return of the bad old days when there was conflict rather than co-operation between lenders and brokers.
“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.
“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.”