Martin Lewis, founder of MoneySavingExpert, has hit out at lenders’ for trying to cut out brokers by offering direct-only deals.
Speaking to Mortgage Strategy, Lewis argues that the rise of direct deals has forced brokers to change their commercial models.
He says: “The broker business model is changing because mortgage lenders are trying to cut brokers out of the market by offering direct deals.”
He adds: “I am very much against that trend because I think good mortgage brokers are valuable. It means that they are going to have to change their commercial models, especially the smaller ones.”
Lewis says he doesn’t think the number of direct deals is down to a “collective conspiracy theory” by all lenders. But he doubts lenders are doing much to protect brokers.
He says: “Their margins are better on direct deals. This is because they sell them through their own staff and do it their way.
“To go as far as to say they are deliberately trying to kill brokers is probably a step too far but I don’t think an increasing number of direct deals is a good idea and I don’t like it.”
The Financial Services Authority says exactly half of all mortgages came from intermediaries in 2010, down from 60% in Q1 2008.