The Association of Mortgage Intermediaries recently estimated that the number of people offering mortgage advice had fallen from 40,000 at peak to less than 20,000 in 2013.
While it is never pleasant to see people go out of business, it could be argued that as a result of this reduction in numbers, for those that have weathered the storm, the benefits of a leaner, fitter mortgage market is about to show.
Having witnessed adviser numbers contract for the past few years, I’d suggest we are about to see a slight change to the pattern, certainly if current activity levels can be sustained. Increased mortgage activity won’t be the only influence either – with the Mortgage Market Review (MMR) requiring that all sellers are required to hold a mortgage qualification, we are likely to see the continued reduction in the number of bank advisers, especially if their superiors decide it is not worth the cost, time, effort and resource required to train them up.
Alternatively, if bank advisers are faced with the challenge of getting qualified, there may be a significant percentage who then decide they are better off being independent mortgage brokers, so there could well be some movement in that direction.
If adviser numbers are to buck the trend and start increasing, it is imperative we keep a close watch on quality control. Although it will inevitably be as a result of a growing market which is good news, it would be foolish to waste one of the few advantages of the dark days – that is the departure of less-committed brokers – by swelling the ranks with intermediaries of average calibre.
It is important that we bring in new blood, but broker firms looking to expand quickly must be mindful of giving too much responsibility to novice intermediaries who don’t understand the market. Personally (and I’m not alone in these thoughts) I think the MMR missed an opportunity to introduce individual registrations, preferring to let the trade bodies attempt the task – a huge mistake in my book but perhaps that’s an issue for another day.
Finally, on a personal note, I’ve just returned from France where I completed Le ‘Etape de Tour, a 128km race tracing the Annecy/Semnoz mountain stage from this year’s Tour de France. I undertook this gruelling challenge partly inspired by Bradley Wiggins’ heroic feats last summer, but I was also motivated to turn it into a fundraising event after witnessing my close friend and colleague John Coffield suffer with Non-Hodgkin’s lymphoma.
I’m close to achieving my fundraising target for Leukaemia & Lymphoma Research, and would like to thank all those who supported me, but anything readers are able to spare for this noble cause would be greatly appreciated, take a look at my Just Giving page HERE.
Bob Hunt is chief executive of Paradigm Mortgage Services
