Almost 30% of intermediaries believe that regulation will push a significant number of brokers into working in the non-regulated markets of buy-to-let and second-charge mortgages.
The figures come from a survey of delegates at this year”s Mortgage Event, which visited seven UK cities and was attended by over 2,000 intermediaries. In explaining his view, one respondent said: “I think it is inevitable. Particularly as the buy-to-let market is so buoyant.
“The end of the endowment era has brought even the big corporate mortgage providers into the non-regulated market. Many smaller brokerage firms will be looking at ways to avoid increased cost in regulation and may view buy-to-let and second-charge business as a suitable option.”
Another went as far as to say: “I hope that this is the case. Specialisation is a good thing for the industry, as is general practice.”
However, the majority of those responding felt most brokers would continue to deal with regulated products rather than avoid regulation altogether. One said: “Intermediaries should not do this if they really believe in the interest of the client. Anyway, I feel that all products that relate to consumer lending should come under some form of regulation.”
The ability to generate revenue in the non-regulated markets was also an issue with many believing brokers would have to offer advice on the whole market to survive.
Whatever the outcome, clarity and freedom to operate featured highly in the responses, with brokers fearing important issues become “submerged among the torrent of rules”.
• Selected presentations from the keynote speakers at the Mortgage Event are now available online at www.themortgageevent.co.uk