Dominic Hennessy says:
"The similarities between the mortgage market of Spring 2008 and Spring 2012 are very strong.
"In May 2008 mortgage lenders aggressively introduced "dual pricing". This is the system of offering lower rates and mortgages through its branch and online networks than available through the intermediary market.
"In March 2012 exactly the same thing has happened. You can now on average get a rate of 0.25% - 0.50% cheaper mortgage rate by going direct to a lender. The intermediary mortgage market represents the majority of lending for many of the largest UK mortgage lenders. In Spring 2008 lender's increased their underlying rates - despite Bank of England Base rate remaining flat.
"In Spring 2012 they have done exactly the same thing. In 2012 this has been triggered by a very positive start to the year for lending. The London mortgage market has got off to a flying start, as homeowners, movers and first time buyers have realized that conditions are the "new reality".
"UK mortgage lenders have been surprised by demand for lending, and have become concerned at their ability to continue to fund lending at the current rate. So they have taken the decision to make standard variable rates higher, new mortgage products higher, re-introduce "dual pricing" and the final twist in this procedure is that mortgage applications will decrease.
"In 2008 mortgage lenders addressed this problem by increasing underwriting criteria. (Also known as making it much harder to get a loan approved). This has the double purpose of further restricting lending and keeping their processing centre's busy.
"So for now, they are trying to restrict lending. As a result we say - go direct to a bank for the lowest possible rates."
