With the Royal Institution of Chartered Surveyors (RICS) and Nationwide, among others, admitting a downturn in mortgage approvals since the start of the continuing ‘credit crunch’, John Charcol’s decision has been welcomed for bringing stability into the currently fragile market.
Ian Kennedy, chief executive at John Charcol, confirmed that the change had come as a result of market conditions and was designed to improve consumer confidence.
He said: “The need for expert mortgage advice has arguably never been more apparent than now, with mortgages consistently at the front of both many people’s minds and the front pages of newspapers.
"With many lenders moving and, crucially, tightening their criteria, it is difficult for consumers to know who will lend to them.”
David Hollingworth, head of communications at London & Country welcomed the change.
He said: “We have been banging the drum for fee-free advice for a long time now and estimate that our customers saved more than £21 million in broker fees last year. With an ever more complex mortgage market, access to whole of market advice is needed more than ever.”
However, Simon Chalk, mortgage planner at Mortgage Portfolio Services, disagreed: “Not charging a fee won’t change a client’s state of nervousness, it will simply make it a tad cheaper.
"The only reason Charcol is doing this is because it is losing huge volumes of business and cannot compete with the personal service that the majority of professional fee-charging brokers provide.
"As soon as the market recovers, will it stick to its new-found belief? I doubt it.”
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