Brokers will drive recovery in the mortgage industry by doing remortgages, says Peter Curran, head of intermediary sales at Lloyds Banking Group.
Curran says low SVRs are deterring borrowers from moving away from their existing lenders but he believes that when interest rates start to rise brokers will be the ones to benefit.
He says: “The remortgage sector has been one of the worst hit as clients have been unwilling or unable to move because SVRs are so low.
“But a bit of movement in interest rates will provide opportunities for brokers. Once we’re into 2011 and beyond we’ll see growth in the mortgage market once more.”
And Curran believes that brokers will benefit from this trend. He adds: “Consumers like using intermediaries for a variety of reasons such as speed, convenience, choice and expertise.
“All this points to a bright future for brokers. They have been around for a long time and I don’t see this changing.”
Curran says the challenge for firms such as Lloyds group is to exist in an environment in which brokers and lenders work together, whereby the latter have direct channels and also intermediary ones.
He says: “I do not think the survival of broking as a sector is something to worry about – the intermediary market will grow again.”
Curran says if you take the view that borrowers will remortgage every five or seven years, a sensible and sustainable mortgage market size would be around £200bn.
He adds: “The market must move from its current position of around £140bn and I think a lot of that extra business will be through the broker channel.”
Latest figures from the Council of Mortgage Lenders show remortgaging made up 32% of all mortgage business in Q1 2010, worth £9.6bn – the lowest level since Q4 2000.
Peter Williams, executive director of the Intermediary Mortgage Lenders Association, says: “The direct channel has had a chance to expand but now it’s at capacity. Growth will come via brokers.”