According to exclusive Platform research, showcased at The Big Debate last week, intermediaries get the majority of new mortgage borrower business, but channel preferences are often weak, with many new borrowers willing to be flexible.
Jonathan Cornell, communications director at First Action Finance, said: “One of the reasons buyers favour going direct is because of the best buy tables that dominate the magazines and newspapers. This often persuades people to go straight to the banks.
“Intermediaries on the other hand, have been getting negative press coverage and have been blamed for the woes in the industry. New buyers also find it much easier to wander into a bank, than having to get in touch with an intermediary that they have never met before.”
The Platform research revealed 56% of potential market entrants would go direct because they think it would be easier than using an intermediary. Perceived speed and existing relationships were the other key reasons borrowers chose direct channels, whereas ‘advice’ was much more prominent for those who choose to use an intermediary.
Lee Gladwell, business development director at Platform, said: “These results give further evidence of the value consumers put on professional mortgage advice.
“As the market gets ever more challenging, we believe it is this that the sector, including brokers, lenders and distributors, should focus on and work together to promote to ensure more consumers better understand what brokers can offer.”
Platform also found that among those who have taken out a mortgage, the majority of borrowers have been happy with the service they have received from both channels.
However, the level of delivery from intermediaries created greater customer satisfaction than that experienced by direct-only borrowers, with 97% of intermediary users happier with their advice on the best deal, compared to 81% direct users.
When it comes to identifying the range of competitive deals to choose from, 94% prefer using an intermediary, whereas 70% prefer to go direct.
Cornell said: “There is a major difference in the value of advice that is offered to borrowers if they choose to use an intermediary. We’re independent from the whole of the market, therefore we can advise a buyer on the best deals from all the large providers.
“New borrowers should also know that when they go to discuss a mortgage at the bank, they also need to consider ancillary products. This is where an intermediary’s advice is invaluable to the consumer.”
