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If the lenders want to restrict their lending why do they not use a booking funds system rather than dual pricing system? Why do they not have a system, which the Woolwich piloted a few weeks ago, where you ring, you book the funds, you have to key the cases within 48 hours and once that tranche of money has run out it has run out. At least this way everyone is on the same playing field. At the moment they are rationing by making the playing field uneven with dual pricing but it is also unfair for the client because they are now in the situation of giving intermediaries some deals that are not available direct, so it is not treating customers fairly because they do not know where they are at either. Cath Hearnden, My Mortgage Direct, Lingfield, Surrey.

Bob Young, CHL Mortgages, Fleet

Dear Cath,

The issue lenders face is how to manage distribution of a scarce commodity, namely mortgage funding. In answering this, whatever happens, someone is going to lose out or at least feel like they have lost out.

Up until now the debate on dual pricing has centred on the cost of distribution and has moved on to how lenders manage their workflow. Both of these are part of the mix but are not the crux.

Lenders have invested millions to get where they are today. If they choose to use the branch network as a preferred route for mortgages they have every right to do so.

For CHL's part we only distribute through intermediaries so it should be easy for us as a lender to manage workflows by a booking procedure, however, it is not. Earlier this year we withdrew our products and gave a full week's notice.

When the dust had settled, we had millions of pounds booked for clients that may exist but were not there yet. More millions were booked for customers who then changed their minds about the property.

In this sense, advisers did not have a clue what the potential cost of this over-hedging could have been for CHL.

When we return to the market we will be working with those intermediaries who have demonstrated they can play by both the spirit and letter of the rules. Some may think they are being disadvantaged by being unable to access our products but we assure those who have matched our investment in time and resources that we will continue to work with them to our mutual benefit.

David Finlay, Woolwich, London

Dear Cath,

We did have an exclusive product out in the market, which we knew would be very popular, so we decided to manage inflow through a booking system working closely with the networks we trialed this with. It was, for us, very successful and gave us a number of key learnings that if and when we need to do this again we would implement.

The decision we took was not linked to preferential pricing but was simply a case of managing the inflow of a popular product. We are a multi-channel mortgage distributor and as such we need to price our products to ensure all our distribution channels reach their commercial objectives.

At present this means some preferential pricing for our own direct channels, in the past it has meant some preferential pricing for the intermediaries. We are committed to intermediaries and unlike some lenders are looking to do more business through this channel this year as opposed to 2007, which must be good news for advisers.

We will continue to look at all options available to us to make sure we reach our goals and support our loyal advisers.

Jon King, Hodge Equity Release, Cardiff

Dear Cath,

Dual pricing has become a major issue recently within the mortgage market and has sparked numerous debates about the notion of fairness; fairness to intermediaries and their access to the best products for their clients and their best access to impartial advice.

While lenders within the mainstream mortgage market have had to play a difficult game due to funding, the same has not occurred within the equity release market. With most equity release business operating long term hedging to offset credit risk, funding has not become restricted.

The long-term nature of equity release means each intermediary and client relationship becomes a lifetime commitment compared with those in the regular mainstream mortgage where clients may look to remortgage regularly.

Advice is paramount and when an intermediary can ensure their product provider is dedicated to helping them help their client, the balance of fairness can be restored.

Steven Marks, Newcastle Building Society, Newcastle

Dear Cath,

Funding is now that more expensive. The markets are competing for savings and that is clearly having an impact on the amount of funding lenders are able to raise and the cost of that funding.

In turn, lenders are being much more careful in the volumes they can lend and the price attached to that lending. Against that background, we have seen the emergence of dual pricing and products only being available in the direct channels.

Booking systems are proving very useful in controlling the level of reservations that are coming through and it is almost a given now between lenders and intermediaries that you have to work together in this way to ensure applications are accepted and processed smoothly.

Clearly, there are some frustrations for intermediaries at the moment with lender strategies for pricing and capacity.

Lenders will have to balance the short-term issues around funding capacity and cost with continuing to support their intermediaries who, once current difficulties end, will continue to be the most important source of mortgage business.