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Brokers ‘never been more important’ as lender and product complexity grows – analysis

  • 17/01/2020
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Brokers ‘never been more important’ as lender and product complexity grows – analysis
Brokers have downplayed the idea that there can be too much choice when it comes to mortgage products and lenders, arguing that the vast array of deals on the market now makes the role of advice even more important.


Competition in the market has meant that advisers are faced with a vast number of products to choose from, with regular criteria changes to keep on top of too.

But far from feeling overwhelmed at the array of deals on the market, intermediaries have argued this situation ultimately demonstrates the value they can offer to clients.


More choice, the better

Jane King, mortgage adviser at Ash Ridge Private Finance, emphasised that a wide range of choice on mortgage deals was beneficial, as “clients come in all shapes and sizes and the more choice we have, the more likely we are to be able to find the right mortgage”.

David Hollingworth, director at L&C, said the level of competition in the mortgage market currently was pushing lenders to be more creative, leading to innovation in product design.

He continued: “There’s benefits for customers but also for brokers in giving a better range of options and increasing the possibility of finding a good fit for clients, even where their circumstances may not fit with the mainstream.”

David Sheppard (pictured), managing director at Perception Finance, agreed that the more products there are on the market, the better outcomes advisers can find for their clients.

However, he did suggest that the “constantly changing criteria” ‒ particularly if these changes are not updated comprehensively on lender websites ‒ can mean that a deal which the broker thinks will easily be approved ends up being turned down.

Sheppard suggested that lenders are not solely to blame for the “ever changing landscape” either, arguing that it is often driven by government and intervention from regulators.

“A well regulated mortgage market is good for us all, but where it becomes oppressive it is not healthy,” he added.


Finding the right deal

Sheppard said that while his firm utilises a number of tools to help establish the right product for their client “no amount of technology can make up for speaking to lenders and seeing what will work”. 

He added that it was not usual for lender contacts to get in touch to clarify that they will look at cases if there are certain strengths to it, even if it does not fit with headline criteria.

James Mole, managing director of London Belgravia Wealth Management suggested brokers were becoming more reliant on technology to help sort through criteria “but I do think it’s a marriage between market knowledge in your head and technology”.

Hollingworth agreed that while sourcing and technology can help “narrow the field” when sifting through deals, “advisers will still need to have that knowledge and experience to know when an enquiry that, on paper, would be declined may actually be acceptable to an underwriter”. 

King said she does an affordability and property check first in order to weed out the lenders who cannot help her client, and then goes from there.

She continued: “I use my research software but always read lenders’ new emails and will always check directly that they are not offering an exclusive of some sort before proceeding. I think it is essential we use technology both as evidence of research and to save us time.  

“When you have been around for as long as I have you sort of know what lenders you can use and who you can’t.”


Brokers have never been more crucial

Hollingworth pointed out that one of the many reasons borrowers go to brokers is so that they can help them work through the haze created by the vast number of product options.

Sheppard added: “The job of a broker has never been more important with the myriad of rates and complexities in the market. It is that complexity that means we can thrive even though it would be nice to have more simplicity sometimes.”


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