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.”
