The rapid pace at which mortgage brokers have been leaving the market finally began to slow in the final months of 2011, figures from the Financial Services Authority reveal.
The year-on-year decline in the number of authorised appointed representatives slowed to 8.1% in December 2011, down from 9.7% in September and 30.8% in December 2010.
There were 2,425 ARs in the market in December 2011, compared with 2,472 in September and 2,638 in December 2010. From its peak of 5,123 in December 2007, the number of ARs is now down by 52.7%.
Meanwhile, the number of directly authorised firms whose primary category of business is mortgages fell by 2.8% between September and December 2011 to reach 1,512.
This marks an annual decline of 12.4% compared with the 1,726 firms in the market in December 2010, which is almost half the year-on-year fall of 21.5% seen between December 2009 and 2010.
The number of DA firms has now fallen by 52.7% compared with a peak of 3,533 in January 2006.
Robert Sinclair, director of the Association of Mortgage Intermediaries, says it is good to see the rate at which brokers are leaving slowing for both AR and DA firms.
He says: “At this stage of the economic cycle, I would still expect to see ongoing consolidation and a gradual fall in the number of firms, but for 2012 this will be more of a trickle than a dramatic drop in numbers.”
The figures also show that the number of DA firms that conduct mortgage business, but not as their main regulated activity, has held up well through the downturn.
The number of these firms has been gradually increasing in 2011 to reach 3,778 in December, just 0.9% off its peak level of 3,813 reached in June 2008.
Sinclair adds: “This is encouraging and demonstrates that firms that diversify into other areas survive market stresses better.”