Brokers have been warned they could lose the war with high street lenders over market share if they fail to take advantage of the number of people seeking mortgage advice.
The Association of Mortgage Intermediaries and Legal & General Mortgage Club commissioned You – Gov to carry out research among 2,113 adults about their mortgage buying habits.
Representative to the UK population, the results show 3.4 million people plan to secure a new mortgage in the next year and 1.6 million will be looking to remortgage, with 1.1 million worried their credit history might hinder their application.
But while 81% of borrowers would prefer to make just one att empt at securing a mortgage as opp osed to trawling the high street, only 44% plan to see a broker. The res earch also shows 8% of borrowers have credit history issues, such as a County Court Judgement or Individual Voluntary Arrangement.
Alan Cleary, managing director of Precise Mortgages, says: “Most people are going to their banks because of the relationships they have with
them. Brokers are going to lose the war to the high street if they are not more proactive about calling up clients and building relationships.
“If a customer visits six lenders they would probably need to take time off work so it makes sense they would just want to go to one place – a broker.”
He also believes the number of borrowers with some form of credit issue could be higher than YouGov predicted.
He says: “People do not like admitting they have credit problems, so we estimate the true figure would be around 12%.”
A recent near-prime poll by Mortgage Strategy showed that the majority of brokers have not placed a single near-prime case in over six months, despite having a large number of credit-impaired customers on their books.
Robert Sinclair, director of AMI, says many borrowers want to receive whole-of-market advice but many consumers are unaware what services brokers offer.
He says: “Brokers need to educate consumers and be proactive if they are to turn this latent demand into business. The mortgage market isn’t going to spring back to pre-downturn levels so it’s up to brokers to make the most of opportunities out there.”
AMI and L&G have gone on the media offensive with the research and spoken to national newspapers in the hope of publicising the advantages
of using brokers.
AMI wanted to launch a national advertising campaign incorporating newspaper and television advertisements to promote the ad vice brokers
can offer. But Sinclair says with an overall cost of between £2m and £5m lenders were unwilling to fund it.