There is an unstoppable sense of optimism building in the broker mortgage market – but what is fuelling it?
We have seen 68,200 first-time buyers helped with mortgages in the second quarter according to the Council of Mortgage Lenders who declared in almost gushing like tones how well lenders are supporting the mortgage market as they reported the largest quarterly total since 2007.
We have heard the chief executive officer of Bovis claim that the Help to Buy scheme has made an appreciable difference in house builder fortunes and it is brokers serving 100 per cent of those enquiries for housebuilder.
Legal & General Mortgage Club broke an 18 year record for completions in July – a sure sign that the first-time buyer, buy-to-let and remortgage sectors are dominating the gross mortgage lending market.
We brokers do have short memories though don’t we? As lenders have realised that it is the broker leading the mortgage market out of the depths of despair, as was ALWAYS going to be the case, because of the orientation of brokers, first-time buyers, housebuilders and remortgages, the issue of dual pricing has gone away. I wonder why?
Perhaps lenders have finally recognised that few first-time buyers are entering their branches?
Property buyers are being well served by estate agency brokers and all the appointed representatives of networks who deal with independent estate agents or the specialist new home brokers who deal almost exclusively with housebuilders.
Lenders have also realised that no landlord is going into their branches.
Finally, it appears that lenders have realised that brokerages up and down the country built systems post regulation and that their business depends on them completing volume remortgage business much more than branch staff.
That and the fact that Funding for Lending makes net lending important so remortgaging becomes an attractive market. Halifax leading the 50 per cent LTV remortgage charts anyone?
OK so bank branches will always gather a bit of mortgage business and those with deep bank relationships will gather more.
But foot flow in branches now must mainly consist of older banking customers who, last time I looked, do not want a mortgage.
Once the Mortgage Market Review is finally introduced in April next year, the advice and who is responsible for this advice will make it harder for lenders to deal with customers online and by telephone.
As a result, they will need to train their branch staff accordingly as the lender through MMR will now clearly be responsible for assessing that that consumer can afford the mortgage they are to take out.
Every lender has realised this and that is why we have the best set of products helped by funding for lending but at the same time, the bigger lenders are pulling their hair out about branch performance.
Be under no illusion, the lenders have never needed brokers as much as they do at the moment and will in 2014.
I now expect and obviously welcome a big shift away from branch/direct and into broker in the second half of 2013 and also into 2014 especially with the introduction of the second phase of the Government’s Help to Buy scheme for second homes.
The economy is showing signs of growth because the housing market is moving forward at last. A healthy housing sector is crucial to the UK economy as consumers need a positive housing market to feel confident about spending. Lenders need to be sure they can service this demand while compiling with MMR in 2014 hence their dependence on brokers.
Given that we brokers are now an inexpensive and variable cost channel for distribution, take full advice risk, are operating in the growing markets with unprecedented volume, I do have to ask why are our procuration fees not increasing? Why are we still facing fee reductions?
How long will it be until we actually use the Association of Mortgage Intermediaries and discuss a fair recompense for our increasingly professional advice and services but at increasingly lower costs?
Put it another way, how will a lender service increasing demand, grow market share without dealing with brokers fairly?