Building societies top Which? mortgage provider consumer satisfaction survey

Building societies have topped a consumer satisfaction survey from Which? about mortgage providers.

Which? commissioned a survey of nearly 3,500 mortgage holders in July, resulting in providers receiving a customer score.

People were asked about factors including customer service, value for money, the ability to underpay or overpay a mortgage, clarity of online statements, online access and transparency of charges and penalties.

Scores were also based on the likelihood of providers being recommended.

Nationwide Building Society and Skipton Building Society topped the table, both receiving overall scores of 78%, just pipping Yorkshire Building Society, which scored 75%.

All three scored a full five stars for customer service and transparency of charges, and were also the highest-scoring firms when people were asked about the flexibility of payments in the annual analysis.

The trio have also been named Which? Recommended Providers (WRP).

To be a WRP, mortgage lenders must have achieved a customer score of 70%-plus, consistently offer table-topping mortgage deals across a range of product types and be fully covered by the Financial Services Compensation Scheme (FSCS) and Financial Conduct Authority (FCA) banking standards scheme.

Firms cannot nominate their own products or services for a Which? WRP award.

Meanwhile, Barclays and HSBC UK both scored 65%, while Halifax and Royal Bank of Scotland (RBS) were given 64% in the research.

Lloyds Bank scored 68%, First Direct scored 67% and Accord Mortgages scored 72%.

Santander UK and TSB both scored 71% while NatWest received 70%. Virgin Money scored 60%.

Some other building societies also fared positively in the consumer group’s analysis. Coventry Building Society and Leeds Building Society posted customer scores of 70% and 69%, respectively.

Paul Broadhead, head of mortgage and housing policy at the Building Societies Association (BSA), said he was “delighted, but not surprised” at the findings of the research.

He 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.

“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.”

He also said that, being based in local communities, building societies are able to respond to the needs of those communities, “considering mortgage applications on their merits with the individual’s unique personal circumstances taken into consideration and then providing the most appropriate product”.

At the bottom end of the Which? table, Metro Bank and the Co-operative Bank for Intermediaries were scored 54%.

A spokesperson from Kensington Mortgages, which also received 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.

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 providers have also signed up to a mortgage charter, to offer certain forms of help to struggling borrowers.

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 of UK mortgage holders was carried out by Focaldata in July 2023.