Charterhouse Research's study entitled ‘Mortgage Intermediaries – The Regulated Environment’ has been tracking intermediary behaviour and attitude via 100 interviews per month since 2005.
The latest study shows that despite there being over 4,000 mortgages available, intermediaries consider that real product innovation has been lacking since the launch of offset mortgages in the 1990s. There is belief that lenders have focused on process and service to the detriment of real product innovation.
Only 12 per cent of intermediaries feel that real product innovation has occurred within the last year, while more than two thirds agree that product innovation has been more about increasing the loan to value ratio and borrowing capacity than real product innovation
In addition, 64 per cent agree that lenders have focused more on service than product innovation with the last really innovative product being the launch of the offset mortgage. When asked to cite the most notable recent product innovations, almost of third of intermediaries couldn’t think of one.
Northern Rock’s Together product was the most frequently cited notable innovation, followed at equal mention of 7 per cent were Edeus and GMAC for point of sale offers. A&L Mortgage Plus, BM Solutions and Halifax retention system each got a mention from 6 per cent of respondents
Kate Turner, associate director of Charterhouse Research said: “Despite its reputation as one of most innovative markets in the world, UK mortgage lenders are not delivering the cutting edge products that intermediaries are seeking. The market has been focusing on extending borrowing capacity to enable a broader range of people to get a foothold on the property ladder. The research results underline the competitiveness of this market and how crucial it is for lenders to differentiate themselves.”
