Fortunately, July and August saw a marked reduction in the extent of dual pricing – a development widely welcomed by the broker sector.
The number of exclusive deals available via large distributors has increased and although they are nowhere near the levels seen a year ago, their return has given brokers a much-needed boost.
The Council of Mortgage Lenders recently published quarterly mortgage data that reinforces the part brokers play in the market and the value of their advice.
In Q2 2008, 78% of first-time buyers arranged mortgages via brokers. This compares favourably with the corresponding period last year when the figure was 72%.
For consumers moving home, the proportion of mort-gages arranged via brokers was 61% – up from 58% in 2007. And 65% of remortgaging customers used brokers compared with 61% in the same period last year.
So broker sales across all three sectors held up remarkably well despite many lenders making available significantly more competitive products through their direct- to-consumer offerings. Meanwhile, research conducted by the Association of Mortgage Intermediaries in 2006 and 2007 and published this year found that 92% of broker mortgage sales in the period provided advice and recommendations to clients.
Lenders that offered mortgages via branches only offered these services in some 40% of cases. Consequently, about 60% of customers received only information rather than also getting advice when going direct.
The study also concluded that in terms of SVR products 87% of such sales were undertaken by lenders directly, without the involvement of brokers.
The AMI research was conducted at a time when mortgage products were at their most plentiful so it is not unreasonable to assume that with the plethora of fixed and tracker mortgages available back then, more appropriate deals could have been sourced had more customers sought the services of whole of market brokers.
In today’s volatile market, with product repricing and criteria changes occurring frequently, it seems logical that consumers must need the guidance brokers can offer them more than ever.
So brokers should draw confidence from the AMI’s findings and use the information to tell their customers about the value they deliver.