Research published by the Intermediary Mortgage Lenders Association (IMLA) showed the remaining 73% of dropouts taking place were as a result of client or broker withdrawals.
The findings, based on interviews with 301 intermediaries from July to September, showed that more than eight in 10 applications made through brokers converted to offer and then completion. At the customer enquiry stage, one in three did not make it through to the application process.
Both directly authorised (DA) and appointed representative (AR) firms delivered the same proportion of enquiries to completion, with ARs reporting a marginally higher rate of mortgage offers at 84% compared to 81% for DAs.
Overall, sole traders achieved the highest rate of offers and completions for customers. Despite this, sole traders experienced 35% of all dropouts due to lender declines, compared to larger firms which accounted for just 20%.
Peter Williams, executive director of IMLA, said brokers and lenders must work harmoniously to produce the desired outcome for customers.
“The advantage of a competitive marketplace with a range of mainstream and specialist players is that a decline from one lender does not necessarily mean the end of the road. Rather brokers will work to secure alternative mortgaging opportunities. As this suggests, positive customer outcomes rely on lenders and brokers working together effectively,” he said.
Ray Boulger, technical manager at John Charcol, added: “[Previous] lender statistics show a lower application to offer success rate for applications not made through a broker. This reflects the understanding brokers have of lenders’ criteria, which changes frequently, and the fact that lenders’ affordability calculations vary considerably, resulting in some cases in very different maximum loan amounts being available.”
