M&S Bank has announced plans to offer mortgages early next year.
The retailer’s banking arm will be taking on the likes of on Tesco and Sainsbury’s with assurances of “competitive rates across a range of terms”. As yet, there is no indication as to what those rates might be and no firm date for launch. Full details have been promised in the new year.
Subject to regulatory approval, M&S will be offering deals to first-time buyers and home movers. There is no mention of remortgages at this stage. M&S mortgages will be available directly from its banking arm and via brokers.
Commenting on the announcement, M&S Bank’s Chief Executive, Sue Fox, said: “Many of our customers have shopped with M&S their whole lives, feeling the comfort of the brand at every key life event.
“We’re now in a position to support our customers with the biggest financial decision they’ll ever make – their home.”
M&S Money, the predecessor to M&S Bank, was set up in 1985 and subsequently bought by HSBC in 2004. While the bank is a joint venture between Marks & Spencer and HSBC, it exists as a distinct legal entity with its own banking licence.
M&S Bank currently has 29 in-store branches and almost four million customers. It has seen the amount of its current account customers increase by 60% over the last two years. Offering a full range of products including current accounts, credit cards, loans, and savings accounts, the addition of mortgages will result in the creation of a “full-service bank”. Bank opening times mirror the opening hours of Marks & Spencer stores.
Commenting on the development, David Hollingworth, Associate Director of Communications at L&C Mortgages said: “M&S is clearly a huge high street brand with real weight behind it in terms of quality and consumer trust. Consumers are well used to M&S offering financial products dating back to its original charge and credit card offering and more latterly the establishment of its current account. That existing foothold and strength of brand should give M&S a good platform for entering the mortgage market. The fact that it’s backed by HSBC should ensure that it can price sharply which is a must in what remains a fiercely competitive market and in our experience customers are open to new brands if the deal is right for them.
“There’s been a number of new entrants in the mortgage market in recent years that can demonstrate that today’s borrowers will happily take to new brands. Challengers like Aldermore, Metro and more recently Atom Bank, are all established brands in the market. Big high street brands have already shown that they have a place as well with Tesco Bank, and more recently Sainsbury’s Bank successfully competing in the mortgage market.”
It’s not yet clear whether M&S Bank will become a member of the Council of Mortgage Lenders (CML) and, if so when their CML handbook requirements will be published for conveyancers. In addition, there are no details about how the bank intends to manage its conveyancing panel.
Today’s Conveyancer has contacted both M&S and the CML – both have declined to comment or provide further details at this stage.
Chris Harris, Managing Director of Today’s Conveyancer, added: “Competition in the mortgage market is always good for conveyancers, as it keeps mortgage prices down and therefore incentivises people to move. At this stage, M&S are keeping quiet about how they will manage their panel, but hopefully it will be broadly open and we won’t see a repeat of the HSBC issues of a couple of years ago.”
