Brokers call for lenders to agree minimum notice period

In this day and age, there are zero excuses for lenders not being able to give a minimum 24 hours' notice when withdrawing products. Saying it's all down to market volatility doesn't really wash in our eyes. These banks will have a huge team of experts in place to monitor these movements in advance before changes are actually made. None of these banks will be having a board meeting at 12pm and then rolling out new rates that same evening. It is a logistical job that will take a number of days' planning and updating their own software, their websites and informing mortgage sourcing software. All we are asking is if you know you plan to withdraw rates, let us know once that decision is made.

Personally, I don't agree. Yes, it would be great for my own sanity if there were minimum notice periods, and yes, I have had far too many nights where I'd rather be spending time with my wife than submitting mortgage applications. However, lenders are businesses reacting to the market, some quicker than others. The rates we have seen over the past week in many cases have been under SWAPs. Lenders will hedge certain amounts of funds at certain rates and once that hedge has run out anything further they lend is at a loss. My fear would be, if lenders are forced into minimum notice periods, it would be a net negative for the end borrower as lenders would have to factor this pricing risk into the rates that they offer. We have seen situations where on days rates are being pulled lenders get 20x the level of business they usually would. If that turned into 50x that could be a real issue that then would have to be offset somewhere else, not to mention the processing issues of 50x volume.

Sounds great in principle but lenders are recalibrating to the current climate and mortgage markets are mirroring rapid external change. Challenges are all due to the market's unpredictability as well as rapidly shifting consumer preferences. It would make our lives easier to have a minimum 24-hour notice but what if it led to overly cautious pricing from lenders? And the knock-on effects of that might disadvantage more customers than it helps. Rocks and hard places come to mind.

The way lenders treat brokers and their clients is incredibly disrespectful. We understand the current market volatility makes it difficult for lenders to price their mortgage products, but giving a few hours' notice of changes is unfair and completely unreasonable. Not just on brokers, but the lender's own intermediary support staff who get hit with a huge spike in live chat and call enquiries. If Coventry Building Society can manage to give 48 hours' notice, why can't all the other lenders?

Absolutely I would back this. It makes the industry more professional and puts the best interests of the clients front and centre, in line with Consumer Duty.

Well done. The immediate or negligible notice of product withdrawals is having a real detrimental impact on the mortgage market. With Consumer Duty around the corner, as brokers, we are responsible for giving our clients the best advice possible. They're making decisions on possibly the biggest purchase they will ever make, and for us to tell them they have two hours to make that decision or their rate will go up is putting them under unnecessary stress and forcing them to make a decision. A minimum timeframe adopted by all lenders is something the market very much needs.

I will absolutely bang the drum in support of this. However, the question, is will any lenders take notice? The past three years has taught me that the lender / broker relationship is often a one-way street. We are constantly told what we have to do to support their clients and agendas, but if brokers ask for 24 hours' notice, which is totally reasonable, the question is: will lenders take action or even care?

I have consistently expressed my admiration for Coventry Building Society's commendable implementation of a 48-hour notice period, which sets a standard that other lenders should strive to emulate. If other lenders adopted a similar approach, not only would it alleviate the challenges faced by brokers, but it would also prioritise the needs of clients and align more closely with the principles of Consumer Duty.