16 October 2023 , 12:57
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Building societies have come out on top in a customer satisfaction survey about mortgage providers conducted by Which?.
The survey, which involved nearly 3,500 mortgage holders, asked participants to rate factors such as customer service, value for money, and the clarity of online statements. Nationwide Building Society and Skipton Building Society were the highest scorers, both achieving an overall score of 78%.
Yorkshire Building Society was close behind with a score of 75%. All three were praised for their customer service and transparency of charges.
To be named a Which? Recommended Provider, mortgage lenders must achieve a customer score of at least 70%, consistently offer top-ranking mortgage deals across various product types, and be fully covered by the Financial Services Compensation Scheme and Financial Conduct Authority banking standards scheme. Firms are not allowed to nominate their own products or services for a Which? award.
Barclays and HSBC UK both scored 65% in a recent study, while Halifax and Royal Bank of Scotland (RBS) received 64%. Lloyds Bank got 68%, First Direct 67%, and Accord Mortgages topped with 72%. Santander UK and TSB both scored 71%, NatWest got 70%, and Virgin Money was at the bottom with 60%.
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Paul Broadhead, head of mortgage and housing policy at the Building Societies Association (BSA), said: "Building societies pride themselves on their customer service and the range of mortgages they provide, including to borrowers with specific or complex needs that may be overlooked by banks."
He added: "They have a good track record of innovative products to cover a wide range of needs, from first-time buyers to borrowers in retirement, helping individuals and families to take control of their finances."
At the lower end of the Which? table, Metro Bank and the Co-operative Bank for Intermediaries were scored 54%.
A spokesperson from Kensington Mortgages, which also scored 54%, said: "Which?'s research does not reflect the overwhelmingly positive customer feedback we receive."
"Kensington ranks as an 'excellent' provider on Trustpilot, with an average score of 4.5 out of five. Seventy-four per cent have given us five out of five."
"Furthermore, Kensington is recognised as an industry leader. We have won 'best specialist lender' in the What Mortgage Awards for the last four years and are five times winner (including this year) of Moneyfacts' best online mortgage provider accolade."
"As such, we are surprised and disappointed to see the Which? scores and our ranking position in its table, which emphatically do not represent Kensington's business and its commitment to first-class customer services and products."
Providers needed to receive a minimum sample size of 40 for inclusion in the scoring.
While major lenders may be able to offer a more extensive range of products than building societies, some smaller lenders may potentially provide more tailored products to suit customers' particular circumstances, such as first-time buyers with smaller deposits or the self-employed, Which? suggested.
It added that, at a time when average mortgage rates have jumped, good quality customer service has become even more important.
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Firms are now subject to higher standards of care under the Financial Conduct Authority's consumer duty, which came into force over the summer.
Many mortgage providers have pledged to help borrowers in difficulty by signing up to a special charter.
Ele Clark, senior money editor at Which?, said: "Our research has found that some of the UK's biggest building societies lead the way when it comes to quality service, with greater transparency over charges and crucially flexibility when making payments."
"The Financial Conduct Authority has now set higher standards in its consumer duty, raising the bar for customer service and firms that fail to meet that bar should expect to face tough consequences from the regulator."
The survey was conducted by Focaldata in July 2023.
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