Lenders have warned brokers they should be preparing sub-prime clients for a reduction in remortgaging opportunities, amid concerns some clients being put forward by intermediaries are more suited to debt counselling.

Mike Perry, associate director of sales and marketing at Amber Homeloans, said it was growing increasingly worried by remortgages arranged by brokers, in which borrowers already struggling to meet payments were seeking to consolidate additional debt, thus increasing their repayments.

He said: “I am surprised by reports of brokers attempting to remortgage clients to stop them being repossessed, when the clients would be better off with debt counselling and possibly individual voluntary agreements (IVAs).”

In addition to prolonging some inevitable redundancies, Perry said some brokers could be failing clients. “It begs the question of whether they are looking at procuration fees ahead of the client’s need,” he added.

Alistair Welham, head of marketing at Salt, said he agreed it would become increasingly difficult for some brokers to find affordable remortgage deals for clients. “Six months ago, some borrowers were moving from sub-prime lender to sub-prime lender, but the reality is that merry-go-round has now stopped,” he said. “Some borrowers are going to find it impossible to get finance.”

However, he added brokers were still only submitting cases to Salt which fit its criteria, and as a result there had been no increase in declined cases.

Bob Sturges, director of comm­unications at Moneypartners, said while it had not identified a similar trend to Amber, that could be due to it having pulled back from the heavier end of adverse lending. “There has been heavy tightening of criteria at the heavy adverse end, and we just do not have the product range to accommodate these borrowers. The appetite among funders is just not there to offer that type of lending in the first place.”

Debt counselling specialist Gareth Neill, a partner at Grant Thornton, said brokers who referred clients to debt specialists should not see it as a loss of business.

He said: “A mortgage broker has to offer a wide range of broad advice, but sometimes it is necessary to get in the specialists to deal with specific issues. The brokers who offer this approach will find their client keeps coming back to them.” He added most IVAs required property-owners to remortgage after five years, thus offering the broker future business.