Crosby sounds dire warning for the future of mortgage brokers

Brokers\' share of mortgage business is set to fall and many will disappear from the market.

Sir James, deputy chairman of the Financial Services Authority, issued the dire prediction in his report on mortgage finance.

He says: “In recent years brokers have been the major force for competition in the market, both in terms of extending access and achieving better value for consumers.

“In the face of lenders now offering cheaper deals through their branches, brokers are losing share in a rapidly declining market and many will disappear.”

Sir James’ suggestion that remortgage business be excluded from his proposed 100bn mortgage asset guarantee programme will add to the pressure on brokers.

Robert Sinclair, director at the Association of Mortgage Intermediaries, says there is likely to be a fall in the number of mort-gage brokers as the market contracts.

But he adds that failing to guarantee remortgage deals could exacerbate the situation.

Sinclair says: “Not guaranteeing remortgages will slow down the housing market further to the detriment of brokers and consumers.

“We will push for the government to include remortgage business as there may not even be 100bn in new transactions next year. In fact, I suspect 100bn will be the extent of the entire mortgage market.”