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Lender withdrawals and consumer / broker duty

ended 30. May 2023

With a number of lenders pulling their products at very short notice again, UK newswire, Newspage, asked brokers whether lenders pulling deals at such short notice align with consumer duty — and also the impact it has on their and their clients' mental health. Their views are below.

8 responses from the Newspage community

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Justin Moy
Managing Director at EHF Mortgages
I would expect lenders to know well in advance when they can see both volumes increasing beyond capacity, and the cost of money changing on the markets. But the snap decisions made by some lenders do cause stress for everyone involved. How many brokers feel they cannot go too far from the laptops just incase an important rate pull is announced? Can we have a stress-free day out with the family? Are we becoming more like traders than advisers, reacting to the last email and running rather than the professional service which needs time and planning? If we are stressed, then this only bleeds across to the clients and we all become one. Coventry and Platform are the exception in the mainstream lender market, but as a whole its not perfect by any stretch. Those exposed to the Swap market, such as the specialist lenders are often the worst, pulling rates by midday or 2pm the same day.
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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
I am finding it increasingly difficult to plan anything at the moment when the mortgage market is changing daily. It is not an industry for the faint-hearted currently. Luckily my friends and family understand when plans get cancelled or appointments moved, for now. Rushing clients to decide on something as big as a mortgage with little notice isn't fair, especially with younger borrowers or first-time buyers, who will invariably need to ask their parents for their opinion, too. It creates a panic, which also may seem like we are pushing to make the sale, but it isn't. I am sure lenders can give more notice than they currently do. Coventry gave 2 days, Accord gave 7 hours. There is no consistency.
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Riz Malik
Independent Financial Adviser at R3 Wealth
The sudden repricing and withdrawal of financial products is indeed a cause for concern. It fosters an atmosphere of uncertainty and stress, both for us brokers and for our clients. With many people taking a break during half-term, the unexpected volatility has led to cancellations of plans including my own.

Moreover, it is important to note that the duty of care regarding mental health should not be limited to company employees alone. It should extend to brokers and clients who also bear the brunt of such abrupt changes. If a lender cannot afford to give a notice period of 24 - 48 hours before withdrawing or repricing their products, it raises serious questions about the viability and resilience of their business model.

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Amit Patel
Adviser at Trinity Finance
It's chaos at the moment. Lenders pulling their rates with minimal notice gives us as brokers a real headache and means having difficult conversations with clients explaining the situation. Lenders must protect their position at all costs to ensure they are liquid and can continue with their obligations to both borrowers and savers. As brokers, we are at the front end so we are on the firing line for all the grievances a client has toward the lender and at times this can impact our mental health, likewise, a borrower's mental health can be impacted, even more so if we identify them as a vulnerable client at the outset. Coventry has been one of the best lenders in giving ample notice to brokers. Specialist lenders don't tend to give much notice, this is not their fault as usually, they are reliant on 3rd party funding.
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Matthew Jackson
Director at Mint FS
Consumer Duty does sometimes feel like a one-way street. There's lots of direction from both the regulator and lenders on how brokers should act, but little policing of the actions of some lenders who are inflicting mental anguish on both the public and brokers. The past three years have been an absolute rollercoaster for the majority of mortgage brokers. The levels of stress are unlike anything I have seen in my 20+ years in the industry. It would help hugely if we felt like we were all pulling in the same direction, but the withdrawals with sometimes no or little notice just increase stress levels in a market that is already close to exploding. Some common sense is needed here. Just because you can pull products with no notice does not mean you should.
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Paul Neal
Mortgages & Equity Release Advisor at First Choice Financial Services
Part of consumer duty is to ensure our clients are getting the best value. How, as a broker, can we ensure that for our clients when lenders are increasing rates by 0.77% with little notice meaning clients are being rushed into making a decision? It's not fair we have to put our clients under this pressure.
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Graham Cox
Director at Bridging Hub
It's incredibly stressful when deals are pulled with next to no notice. The day's work plan goes out the window as brokers scramble to submit applications. And there's nothing worse than telling a client their monthly payments are going up because a product has been pulled. Some lenders are better than others: Coventry spring to mind giving 48 hours' notice, which at least means advisers have time to get the application in without burning the midnight oil.
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Adam Smith
Founder at Alfa Mortgages
The notion of equating lenders adjusting interest rates to mental health problems is indeed a case of woke nonsense. I mean, seriously, Give me a break. How can anyone even make that comparison? It's like mixing up first-world problems with real, serious issues. Let's not get carried away and lose sight of what truly matters. If there ever comes a day when I have to resort to sobbing myself to sleep while popping diazepam like candy, all because a lender messed with my mental health, then it's definitely time to call it quits on this whole mortgage game. We need to keep things in perspective and prioritize our mental well-being above all. Sure, dealing with lenders can be a pain in the neck, but we can't let it take such a toll on us. There are far more important things to worry about in life, and we shouldn't let these minor inconveniences consume us.