L&G club votes against dual pricing

Members of the Legal & General (L&G) Mortgage Club have voted overwhelmingly against the use of dual pricing by lenders.

The club asked brokers to identify the best solutions available to lenders when credit is restricted and the vast majority said lenders should raise their pricing across all channels.

The research aimed to try and move the industry on from the dual pricing debate to explore positive ways for lenders and advisers to work together.

After pricing, the next best option was to tighten lending criteria or restrict distribution channels. Among the other suggestions made by brokers were for exclusive deals for first-time buyers, to replace proc fees with monthly commission and for more credit to be extended at high loan-to-values for borrowers with good affordability.

Legal & General will be working with the lenders on its panel throughout the rest of this year to discuss the viability of implementing these suggestions.

Ben Thompson, director of mortgages at Legal & General, says: "I realise that conditions are very difficult for lenders, but there is nothing guaranteed to annoy a broker more than dual pricing. It is like treating them as second-class citizens.

"Brokers have long memories and will remember those lenders which have stood by them in difficult times."

He adds: "The mood at the Legal & General Mortgage Club awards, held on 5 June and attended by lenders and mortgage advisers, was one of co-operation and mutual support. The general feeling was that we all need to work together to get through this recession and a long-term outlook is needed rather than chasing volumes from week to week."

stephen.quigley@incisivemedia.com