The Association of Mortgage Intermediaries believes lenders are gearing up to launch an aggressive campaign through their branches to compete with brokers who are currently taking a bigger share of the mortgage market.
The Intermediary Mortgage Lenders Association has worked out that brokers accounted for almost two-thirds of total mortgage lending in the first three months of the year.
Santander estimates that it does 80% of its mortgage business via brokers, while Lloyds Banking Group and Nationwide Building Society say 60% of their lending comes through intermediaries.
AMI says that with brokers taking most of the market lenders will need to up their game or be faced with the prospect of maintaining redundant branch networks.
Speaking at the Mortgage Strategy Summit at the Luton Hoo Hotel in Bedfordshire last week Robert Sinclair, director of AMI, told delegates: “Intermediaries are feeling as busy as they were last year because bank branches are pretty dead.
“Branches are running at less than 50% capacity at the moment. Somebody will do something about that at some stage.”
Sinclair says that to compete with brokers lenders are going to spend a lot more on advertising or revert to dual pricing.
He says: “I am concerned that given the low level of activity and how much business brokers are writing, lenders are going to be looking at how much business they can drive through their branch network.”
But Sinclair doesn’t think brokers can afford to be complacent. He is concerned that the Financial Service Authority’s plan for the individual registration of brokers could shrink an already dwindling adviser community further.
He adds: “We have gone from 30,000 to 12,500 brokers. We have to be careful that bringing in a strong authorisation regime could reduce this to the point where it gets hard for consumers looking for advice to find someone local.”
One industry insider tells Mortgage Strategy that there is a danger broker numbers could fall below the critical mass of 10,000.