The figures clearly show the intermediary channel is the vehicle of choice for lenders and consumers alike when it comes to arranging mortgages. Between the third quarter of 2014 and the third quarter of 2015, CML data indicates that intermediaries’ share of lending to first-time buyers increased from 63% to 71%, with the home mover market seeing a similar increase.
The continued growth of intermediary distribution is due to a number of factors; including an ever-more restrictive regulatory environment, increased numbers of non-standard borrowers and the commercial advantages that distributing via the channel gives lenders. Given that none of these issues look likely to disappear from the market over the next 12 months, we can expect the intermediary channel to remain just as important to distribution in 2016.
It promises to be a year of striving to maintain the high levels of service and positive outcomes that brokers have provided over the past 12 months, against a backdrop of wider reviews of financial advice markets and mortgage distribution.
Our Mortgage Market Tracker – devised as a means of tracking customers’ journeys through the advice process – showed that 83% of applications via brokers led to offers in Q3 2015, of which 84% subsequently resulted in completions. Brokers are evidently highly effective at matching borrowers with the product best suited to their needs, and we expect them to build upon this success as they continue to get to grips with adjustments to the regulatory regime.
From the customer perspective, 2015 has been a strong year for those who meet lenders’ affordability criteria. While house prices are undoubtedly high, borrowers have been given a lift by low rates and an improving economic situation. Competition between lenders remains fierce, and product numbers continue to swell – providing consumers with an even greater incentive to look to the intermediary channel.
Changing technology will continue to present both a challenge and opportunity for brokers, lenders and regulators alike. But meeting consumers’ individual needs will remain the focus, whatever comes, and brokers are well placed to keep delivering.