It’s been estimated that in recent times 60% of mortgage cases have been arranged through Independent Mortgage Brokers, as opposed to going direct to lenders.
This is a marked change when you consider that only 4 or so years ago the majority of mortgages were arranged direct with lending institutions like Banks and Building Societies.
Well the boot is definitely on the Brokers foot now with mortgage lenders actively courting Broker introduced business, including some lenders that historically rejected all calls to accept Mortgage Broker business.
So why this incredible mortgage lender shift away from direct business towards the Broker market?
We think that the saying “needs must” goes a long way with this one!
In 2014 following a review of the mortgage market, at the stroke of a pen the city watchdog banned the “non-advised sale” route, which effectively allowed non-qualified staff of the type normally found in banks and building societies to talk the customer through making a potentially life changing decision regarding a mortgage using a “decision tree”. They must now be fully qualified and there are very few that are and banks are deciding whether it is worth training the number of staff that might be required.
This rather odd process allowed many institutions to give advice under the guise of information. The use of the “decision tree” non advised sales route was always a contentious issue with the Independent Adviser market as it created an uneven playing field.
Little wonder that since the introduction of the new rules, getting an appointment to see a fully qualified Mortgage Adviser at a lender can involve a wait of many weeks as they simply don’t have the qualified staff on hand. Many of their Mortgage Advisers are itinerant, going from branch to branch………for those lenders that still have them!!
Unless a mortgage is purchased “off the page” without any client interaction such as telephone calls or emails, lenders now have to give advice, and assess affordability. A mortgage appointment with a lender is taking on average 3 hours, which is not helping with their customer service or getting loans on their books.
Unfortunately for lenders fewer branches, combined with removal of the non advised sale route and the public’s deep mistrust of lenders is not going to produce anything like the level of mortgage lending that they need to thrive or even survive.
So many of the lenders who turned their backs on the broker market when the recession hit need them more than ever now. Most are increasing broker support staff numbers and introducing broker only channels to make their service easier to use.
The future for the Independent Broker?
All the signs are that it should be long and fruitful.