The Mortgage Works (TMW), part of the Nationwide Group, is set to start paying mortgage brokers for retention business for all applications from August.
The company has joined a raft of lenders that have been raising or introducing procuration fees in the residential and buy-to-let (BTL) market in recent months.
Under the terms of the deal, a gross procuration fee of 0.2 per cent for retention business will be paid by TMW to intermediaries for all existing customers switching products.
The fees will be launched simultaneously to all intermediaries, with no phased roll-out. Nationwide has invested in its online systems to develop the technological functionality to let brokers switch products and be paid a procuration fee.
Paul Wootton, managing director of TMW, said: “We announced that we would be offering procuration fees for retention business earlier this year, and we are now able to do so for TMW.
“We have long valued the support and hard work of our intermediary partners and we are pleased to be in a position now to roll out retention procuration fees.”
The Association of Mortgage Intermediaries has said the increase in the number of procuration fee offers has been triggered by the Bank of England phasing in its term funding scheme, which incentivises lenders to boost net lending in order to benefit from its cheap borrowing rates.
Ray Boulger, director at mortgage broker John Charcol, said: “It is good that TMW is starting to do this, but I would say it is a catching up level.
“Bearing in mind that BTL business goes through brokers, with all the changes in the BTL market, lenders are more in danger of losing clients than they have been in the past because clients’ circumstances will be changing. It is in the lender’s interest to engage with brokers.”
Andrew Montlake, director at mortgage broker Coreco Group, added: “This is totally reflective of the way the market is moving in both the residential and BTL spheres, with lenders recognising the additional work and benefits brokers bring to the retention process.
"It is a great starting point and I am sure that the payments themselves will move upwards over time so there is no difference between a new business procuration fee and a retention procuration fee.”
