Mortgages  

Tesco bank joins UK mortgage market

Tesco bank joins UK mortgage market

Tesco Bank is set to enter the intermediary mortgage market in a move to take on the largest high street lenders.

The supermarket chain’s Edinburgh-based subsidiary has initially made its mortgage range available through London & Country mortgage brokers.

The service, Tesco Mortgage Intermediaries, will be offered through a range of other brokers via Legal & General’s key account firms, including Nouveau Group, Mortgage Advice Bureau, John Charcol and Stonebridge.

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It includes a number of features to help brokers make the transaction as straightforward as possible, including searchable lending criteria, webchat and the ability to scan and upload documents, and track the status of applications from any device.

Brokers will be able to contact Tesco Intermediaries by phone or online using the bank’s webchat functionality.

Benny Higgins, chief executive of Tesco Bank, said broker market competition has increased since the introduction of the Mortgage Market Review in 2014.

He explained: “The vast majority of Tesco customers select their mortgage through a broker, and our platform has been specifically designed to help brokers provide a great service to customers who are remortgaging or purchasing their home.”

In February 2015, Mr Higgins revealed that Tesco Bank was laying the groundwork to offer mortgages through intermediaries in the first half of 2016. This followed a move into the intermediated market by HSBC at the tail end of 2014, providing residential mortgages in partnership with Countrywide Mortgage Services.

More than 70 per cent of mortgages in the UK are obtained through brokers rather than directly through banks or building societies.

Adviser view

Mike Richards, director at Mortgage Concepts Associates, welcomed the move but was annoyed that the offer affected only for a restricted group of advisers.

“It means that the majority of mortgage advisers will not be able to access this products. It will show on the sourcing systems, but advisers will have to explain that they can’t access them.

“While on the one hand I understand they would not have the infrastructure to cope with having their offering out to the whole market, it is one of my pet hates that most brokers will not have access to what is in effect an extremely competitively priced product.”