Lenders are reporting that even though there are mortgage deals available, consumers still believe there is little hope of securing a deal, so are not making the effort to look for property.
The Council of Mortgage Lenders has forecast that gross mortgage lending will be down in 2011, before recovering to 2008 levels by the end of next year.
This is despite a clear improvement in the UK mortgage market.
As the CML states: “There have been signs over recent months of increased competition – and a narrowing of mortgage spreads – at lower LTV ratios, and a greater range of higher LTV products.
“While the latter will not necessarily show through fully or immediately in actual lending volumes, it is nevertheless a positive development.”
Mortgage product availability has improved in recent months. One sourcing system reports product numbers have increased by 7,000 over the past year and IMLA members are certainly stating that they want to do more business.
A clear message coming out of a recent meeting of IMLA members is that mortgage brokers can help tackle this malaise.
Lenders want intermediaries to start cultivating their customer bases again, looking to proactively look for mortgage leads and to approach clients with appropriate products.
Mortgage brokers have endured some tough times in recent years and quite rightly have moved into fresh sources of finance, particularly insurance and protection sales, to survive.
Yet, they can complement these new sources of income by what should be their bread and butter – mortgages.
It will take a concerted effort from both lenders and brokers, but this important consumer message needs to gather pace.
John Heron is chairman of IMLA
