Quarter of brokers could go to wall in two years

A quarter of mortgage intermediaries could be forced out of business in the next two years if market forecasts are to be believed.

Chairing a question and answer session at Mortgage Strategy’s Mortgage Summit in Jerez, John Malone, managing director of Premier Mortgage Service, told delegates the disparity between the value of the market last year and predictions for the end of 2005 means something has to give.

Malone told delegates: “Figures published by the Council of Mortgage Lenders in August predict the market will be worth 228bn next year.

“Considering the market at the end of last year was worth 291bn, this suggests there will be less business to go round.”

But Chris Cummings, director of the Association of Mortgage Intermediaries, says intermediaries have good reasons to be optimistic and should not be apologetic about the valuable service they provide.

He says: “Intermediaries are a vital distribution channel and should start being assertive about the value they add in the mortgage process.

“Advice is an economic commodity and consumers are beginning to realise that.”

Lenders also used the conference session to confirm their commitment to the intermediary market.

Louis Kaszczak, national partnerships manager for the RBS Group, said: “One of the reasons we are here is because we want to expand our business – and we want to do this through the intermediary market.

“Regulation has made branch business more expensive and we will continue to offer intermediaries exclusives to maintain our distribution through this channel.”