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Brokers account for almost two thirds of all mortgages

Brokers accounted for nearly two thirds of all mortgages in the first three months of the year, according to data from the Financial Services Authority and the Council of Mortgage Lenders.

Peter Williams
Peter Williams, executive chairman of IMLA

The Intermediary Mortgage Lenders Association has cited figures from the FSA and the CML which show that mortgage lending via brokers made up 62% of total mortgage lending both by value and volume in Q1.

This is an increase from the 60% mortgage market share brokers had in Q4 2009.

Some 71% of first-time buyer loans by volume were introduced via intermediaries in Q1. IMLA says this is the highest proportion since Q2 2009.

By value, the proportion of first-time buyer loans arranged through brokers rose from 67% in Q4 to 69% at the end of March.

Brokers also introduced 57% of home mover loans in Q1 by volume and value, as well as 64% of remortgages by value and 61% by volume.

Peter Williams, executive chairman at IMLA, says that the services brokers offer remain in demand.

He says: “Mortgage lending continues to be constrained, with a scarcity of mortgage products.

“This is where the intermediary community adds value to  borrowers, ensuring that they are suitably matched for a mortgage application to be successful. Broker experience and expertise are particularly valuable in the current economic conditions.”

He adds: “What the figures show is that the contraction in the intermediary market share, which arose when lenders were rationing supply and delivering it direct through branches, bottomed out in 2009.

“It underlines the fundamental importance of this channel, not just to borrowers but also to lenders as a flexible and highly effective route to market.”

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  • Mortgage Broker N3 19th May 2010 at 9:55 am

    ..next year, the figures will approx 50% via brokers and 50% direct and this trend will unfortunately increase until lenders intriduce more products.

    With LIBOR rising and continued debt problems and reluctance to lend amongst banks, the writing is on the wall for brokers.

  • Peter Suttill 19th May 2010 at 9:20 am

    Good to see that the public recognise the true value of good independent advice, even if some of the lenders are still in denial.

    I also suspect these statistics may be understating the broker influence as I like many other brokers will recommend direct deals if they are the best for the customer & in the past 12 months 31% of my clients have been advised to take direct deals. I would imagine the brokers are not being credited for this business.

    When will these direct only lenders wake up & realise that whilst their mortgage products may be good the public does not value the quality of their advice & is wary of being sold inapproriate or costly other products – might also be nice if the regulator truly recognised this as well.

  • Rob Jupp, Savills Lending Solutions 19th May 2010 at 8:10 am

    Excellent work my IMLA in highlighting these figures and I think we would all welcome any statement that shows that the majority of UK consumers do actively source their mortgages through independent mortgage intermediaries and not via branch networks or price comparison websites. With the gradual return of the specialist mortgage market I for one believe that this statistic will only improve over the next 24 months.

  • Stuart Duncan 18th May 2010 at 1:57 pm

    Good to hear positive news but I still believe that the FSA are neglecting their duty to regulate the mortgage market by allowing lenders to incentivise cheap non-advised mortgages.

    As for Bank of Ireland and similar, they should be prevented from marketing their products until they are prepared to provide an accessible advised service.

    These lenders are treating execution-only mortgages as the default option, which is unacceptable in an ostensibly regulated industry.

  • Paul 18th May 2010 at 1:13 pm

    Hopefully this will stop some of the negatives and throwing in of the towel from a lot of brokers on this debate. Mortgage brokers have proven themselves to be vital for a client selecting the most appropriate deal, not just the cheapest headline rate. This will continue for a long time yet with broker introduced mortgages dominating the market. Lenders know that brokers offer them the best route to market and will come crawling back very soon. Longer term, the dual pricing, non advised, sell at all costs direct attitude of the banks may well turn out to be a blessing in disguise for brokers. When the clients realise that their bank did not provide the best deal they will be forced to seek advice from a broker, the only person able to give whole of market advice. Here’s to the future, as said in the previous article, long live the broker.

  • Brian Brotherton 18th May 2010 at 1:02 pm

    Maybe somebody should point this statistic out to the lenders.

    Rather than lenders trying to do everything they can to cut out brokers.

    When will the lenders wake up, we generate clients and have relationships.

    They have customers who they try and rip off.

  • Avenue & Co Private Finance 18th May 2010 at 1:01 pm

    I hope lenders see these figures and realise the implications of shutting off a distribution force as powerful and of high quality as the mortgage brokers.

    I hope mortgage strategy publish research based on the disastrous consequences of business activity for those lenders who choose to dual price and stop distribution via brokers, it will make interesting reading.

    Already, we can see many lenders forced to cut rates just to appear on best buy comparison tables – because that is the only way they can win business, only then for the applicant to realise, the process is not as straightforward as it seems and unable to meet criteria. Only good brokers can help a client select the right products, and that needs advice.

    With all the negative press about shoddy financial advice from banks and building societies, combined with high pressure sales tactics in order to meet targets making a comeback, it’s no wonder clients choose independent advice.

    Long live the broker!!