Comparison website Moneysupermarket.com has launched a blistering attack on the mortgage broker community by claiming advisers offer limited choice because 90% of deals are available only direct.
The website says lenders are now offering better deals and the days of brokers offering a whole-of-market range are gone.
Kevin Mountford, head of banking at Moneysupermarket.com, says: “Lack of supply along with high demand means lenders can take full advantage of the present situation rather than having to push their products through brokers, who they previously relied on.
“As a result, anyone using a mortgage broker should be aware that the range of products available may be limited.”
He adds that brokers should be seen as part of the shopping-around process rather than having the last word when it comes to mortgages.
Council of Mortgage Lenders data shows that 71% of first-time buyers used intermediaries to get a mortgage in Q1 2010 compared with 67% in 2006.
Intermediaries also accounted for 57% of the volume and value of deals in the home mover market, and 61% of the volume and 64% of the value of remortgage deals.
Dev Malle, group sales director at Personal Touch Financial Services, says Moneysupermarket.com is talking “a load of old tosh”.
He adds: “Consumers will vote with their feet. Clearly, what they value is telephone or face-to-face advice to help them through what is effectively still a maze of thousands of products. They need access to expertise and understanding.
“Nobody has yet found anything to replace brokers, either on the internet or via direct products.”
HSBC, which has never offered deals via brokers, is backing Moneyfacts analysis that shows 93% of the lowest price deals are now available only direct.
The company surveyed 96 of the lowest rate deals in the past two years and found that only six were available to brokers.
Moneyfacts says the difference between the best broker and best direct deals is 0.31%.
Martijn van der Heidjen, head of mortgages at HSBC, says customers can no longer rely on brokers to get them the best deals.
He says: “Going to a broker can be a useful part of this process but it definitely shouldn’t be seen as the only route to guaranteeing the best deal. Borrowers need to check newspaper best-buy tables, comparison sites and lenders’ direct deals.”
Mortgage Strategy is fighting for the future of mortgage brokers with a campaign and petition to be presented to the Financial Services Authority and the Treasury.