Recent research by consumer champion, Which?, reveals that building societies are currently outstripping many high street banks in their annual survey of the best mortgage providers.
Nationwide Building Society reclaimed its title as the Which? Recommended Provider (WRP) this year, with newcomers Skipton Building Society and Yorkshire Building Society also securing top spots.
Over 3,400 members of the general public participated in the survey in July. Each mortgage provider received a customer score based on the quality of their customer service. To be designated as a WRP, mortgage lenders had to achieve a customer score exceeding 70%, provide competitive mortgage deals across various product types, and be fully compliant with both the Financial Services Compensation Scheme and Financial Conduct Authority (FCA) banking standards.
The triumphant trio of WRPs, Nationwide and Skipton Building Societies, both achieved an impressive customer score of 78%. Meanwhile, Yorkshire Building Society trailed slightly with 75%. All three societies garnered a full five-star rating for customer service, transparency of charges, and also stood out for their flexibility in payments with a commendable four-star rating.
While building societies predominantly took the lead, larger high street banks like Barclays, HSBC, and Halifax fell behind with customer scores hovering around the mid-60s. None of these banks managed to score more than three out of five stars in crucial categories such as clarity of statements and flexibility of payments. This slide down the rankings might be attributed to the current cost of living crisis, which has seen an increased emphasis on these factors for mortgage holders grappling with monthly repayments.
The survey’s lower ranks saw the inclusion of Family Building Society, Kensington, Metro Bank, and The Co-operative Bank for Intermediaries, all of which had customer scores around the mid-50s. Even though these larger institutions might offer a broader range of products, smaller lenders appear to be offering more bespoke products tailored for specific customer scenarios, such as first-time buyers with minimal deposits or self-employed individuals.
Given that average mortgage rates are now at their highest since the 2008 financial meltdown, the importance of top-tier customer service has surged. Which? underscores the necessity for banks to offer tailored support ensuring customers are adequately assisted.
The FCA’s Consumer Duty now necessitates even higher standards of care. Which? anticipates that the regulator will be stringent with companies that don’t meet the mark.
Ele Clark, senior money editor at Which?, said: “With mortgage rates at some of their highest levels for 15 years and alarming numbers of homeowners struggling to meet their monthly payments, customer service is more important than ever.
“Our research indicates that some of the UK’s premier building societies are setting the standard in terms of service quality.
“The Financial Conduct Authority has set a higher bar for customer service with its Consumer Duty, and those not meeting expectations should brace for stringent measures from the regulator.”
