At a time when the mortgage industry is basking in complementary remarks from such figures as the Chancellor and Clive Wood, the chairman of the Council of Mortgage Lenders, the intermediary sector should be feeling rightly satisfied with its role in this success.
Despite all the talk of examinations and regulation, and the associated anxiety they bring, the last 12 months have been a boom time for mortgage advisers. And this success has culminated in the rightful recognition of brokers’ importance to the industry with the long awaited launch of the Association of Mortgage Intermediaries, the first trade body set up specifically for mortgage intermediaries.
However, there are indications of trouble ahead, as there have been growing signs of unrest in the mortgage protection market. Re-insurers are becoming increasingly worried about a predicted claims explosion in critical illness policies and are making it almost impossible for insurers to offer guaranteed rates. This has caused insurers to alter their policies ahead of time and consequently increase their premiums. One of the only insurers to maintain its guaranteed premium prices was Prudential and consequently it has been swamped with applications. It has now joined the other life insurers, but its recent decision not to honour ongoing applications will potentially cause problems for thousands of brokers and their clients, as they may now have to look for a different insurer and start the application again, leaving their mortgage vulnerable.
Despite this, mortgage brokers must not let adverse media coverage put them off selling protection. The continued success of the market depends on providing sustainable homeownership, as the latest Power Hour finds out. With only 14% of mortgage payment protection policies sold by intermediaries, the potential for increased revenue cannot be ignored.
Ben Marquand, editor