You are here: Home - News -

Consumers do not understand role of mortgage brokers – Duncombe

by: Chris Menon
  • 07/11/2017
  • 0
Consumers do not understand role of mortgage brokers – Duncombe
Legal and General Mortgage Club is launching a press campaign, entitled ‘Mortgage Myths – Value of a Mortgage Broker’ to dispel common misconceptions around mortgages and highlight the important role advisers can play in helping consumers find better deals.

As part of this campaign it carried out research based on a survey that indicated more than five in ten UK consumers, (55%) were unaware that a mortgage broker could offer more product choice than a bank or building society.

Speaking at Mortgage Solutions’ Mortgage and Protection Event to launch the research, Duncombe explained that brokers needed to adapt to the current market as threats to their business came from multiple directions.

The Value of a Broker research, supported by analysts from Censuswide, draws on a survey of 500 individuals who have bought a home in the last 12 months with a mortgage, and 500 first time buyers who plan to buy in the next six months.

The research revealed that nearly half (48%) of homeowners and those looking to buy who did not use a broker chose not to because they felt that their bank or building society offered them a good deal, 15% thought that they would get a cheaper mortgage going direct, and almost one in five (19%) consumers “did not see the value” a broker would add.  Almost a fifth (19%) of all respondents surveyed thought that brokers and banks had access to the same mortgage products and deals. This was despite there being 3,721 products available to consumers who went direct, compared with 29,886 for those who used a broker.

Lender impartiality

When asked whether they agreed with a series of statements about mortgage advice, one in seven (14%) thought their bank or building society would be able to give them access to the same impartial advice as a mortgage broker.

The Legal & General Mortgage Club Mortgage Myths campaign aims to put the spotlight on misunderstandings like these, highlight the valuable role of independent advice from a mortgage broker and encourage consumers to speak to an adviser about their mortgage options.

The survey also showed that the majority of borrowers were unsure about the role of a broker and how an adviser could help them with finding a mortgage. Less than half of respondents (44%) correctly identified that a mortgage broker works primarily for the borrower, while over a quarter (29%) thought brokers worked on behalf of the lender.

Consumer misconceptions

Jeremy Duncombe, director of Legal & General Mortgage Club, said: “These findings show there are a number of misconceptions consumers hold around the role of a mortgage broker, particularly when it comes to understanding who the broker is there to support. As an industry, there clearly is a significant amount of work to be done to change these attitudes, educate consumers and promote the advantages of using a mortgage broker.

“Although some consumers appear to believe they have secured the best deal possible by going directly to their lender, without speaking to a broker they could be missing out on thousands of mortgage products that might be even better suited to their needs. Brokers can offer consumers exclusive rates to their benefit and provide them with access to specialist lenders if they haven’t been successful on the high street.

“Ultimately, we hope our campaign will encourage brokers and the wider industry to dispel the myths surrounding mortgages and encourage consumers to speak to a professional mortgage adviser, who can guide borrowers and provide best advice when making the biggest financial decision of their lives.”

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.

Read previous post:
TMPE 2017: Google and Amazon are threat to broker business, Legal and General’s Duncombe warns

Brokers must adapt to bat off business threats from robo-advisers and comparison sites, as well as technology giants such as...

Close