Williams was commenting on British Bankers’ Association figures showing high street banks advanced just 2.3% more in gross mortgage lending last month.
He said Funding for Lending had put pressure on smaller lenders and encouraged them to compete for business: “Broker business is an important way of competing, whether by putting out special deals or tailored products through brokers.
“An increased share of the market is intermediary business. Direct lending is coming down and intermediary lending is going up.”
The BBA figures were another sign that the mortgage market was strengthening, especially in the remortgage market, he added.
A Building Societies Association spokeswoman said the figures indicated the growth in mortgage lending was coming from the mutual sector: “Many building societies and other mutual lenders have close relationships with brokers. The lending figures over recent months clearly show that the sector is open for business and growing its mortgage balances. This can only be good news for lenders, brokers and consumers.”
Some high street banks may have slowed lending in order to concentrate on repairing the capital holes in their balance sheets, she suggested.
BBA members advanced £9.1bn in July 2013, up from £8.9bn in June, according to the trade body’s latest figures. The number of approvals for house purchase and remortgaging were 31% and 40% higher respectively than the same time last year.
But despite representing some two-thirds of all UK mortgage lending outstanding, the high street banks only represented 54.8% of the £16.6bn July gross mortgage lending reported by the Council of Mortgage Lender figures.
High street banks’ net lending continued to fall, to -£0.1bn. By contrast, the Bank of England estimated mutual net lending to be at £1.047bn in June 2013.
BBA statistics director David Dooks said: “Mortgage activity has strengthened during 2013 with the help of government schemes but high repayments and redemptions mean, however, that we are not seeing increases in net mortgage borrowing for the high street banks.”
