Good time to get closer to clients

Lenders have a duty to lend responsibly but in the current climate, as many exit the market, those that remain are being forced to amend criteria to ensure they hit capital targets.

As we all know, capital is a scarce resource, which means LTVs in particular are being scrutinised. For lenders, the capital required to support 90% LTV mortgages is significantly more than that needed for 60% LTV products.

While a tightening of criteria is never welcome, I know from speaking to brokers that they understand a sensible approach is essential to ensure lenders write the correct type of business.

But on the plus side, while providers leaving the market is disappointing it presents an opportunity for brokers. It is a chance to strengthen relationships with clients by providing advice about switching products to lenders still in the market.

Bank of Ireland and Bristol & West have been the most high profile example of big names leaving the high street. The Council of Mortgage Lenders says the two brands wrote around £8bn worth of mortgages in the UK and roughly 70% of this would have been through brokers.

This means about £5bn is on offer and brokers will be advising where this new business should go.

Borrowers need help in rebuilding their confidence and nursing these relationships will help restore faith in the market while allowing consumers to forge closer ties with brokers.