The Financial Services Authority’s recent report on the mortgage market showed the number of deals originated by intermediaries has declined.
This was disappointing but not unexpected. In the previous quarter 51% of mortgages were originated by brokers and this has dropped to 47% in the latest quarter. There could also be further declines over the next 12 months.
We commissioned a YouGov poll with 2,113 mortgage borrowers and one of the questions was whether the respondent would use an intermediary for their next mortgage or go to their bank.
The response was that 44% would be using a broker and 52% their bank. The reason for going to their bank was because they had an existing relationship such as a current account. But it strikes me this relationship is pretty tenuous and could easily be disturbed.
Banks spend millions of pounds on marketing to encourage consumers to come into branches and invariably sell them products from a narrow range.
Brokers need to fight back to reverse this trend and I believe the key is relationships. Regular contact with customers will make a big difference when they want to buy a financial product.
Also, intermediaries have a broader product range available to them than the typical high street bank. Brokers have a great proposition for customers but unless they tell them about it, banks will keep hoovering up more and more business.