Much has been made by Moneysupermarket. com of its discovery that more better priced deals are available direct than through brokers, the implication being that the latter can’t provide the best deals.
Of course, this doesn’t tell the whole story. There are several reasons why brokers and lenders need each other while the balance of power continues to swing back and forth.
Even after the credit crunch well over 50% of mortgage deals are introduced. This suggests lenders are happy to work with brokers where cases are not straightforward, and that in having two channels to market they can manage the risks in each.
Lenders are introducing exacting standards but it’s significant that they have not deserted the broker market.
They will be affected by the extension of the approved person’s regime and the MMR, so if new regulations come with a high price tag for brokers it’s an equally significant one for lenders.
Moreover, most mortgage business is anything but straightforward, requires advice which providers can’t offer and knowledge to source the right deals for clients.
Consumers still appreciate whole-of-market advice. Lenders will continue to manage risk and funding, and new rules will stretch resources. But ultimately it’s in neither lenders’ nor brokers’ interests to see the demise of the other.