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Complicated criteria and growing product choice behind broker market share jump ‒ analysis

  • 21/09/2021
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Complicated criteria and growing product choice behind broker market share jump ‒ analysis
Brokers have pointed to lenders increasing the complexity of their criteria, as well as the wide range of products to choose from, as drivers in the increase in the ratio of mortgage deals going through advisers last year.


According to the latest research from mortgage technology firm IRESS, around 90 per cent of mortgages went through intermediaries last year, up substantially from the 77.5 per cent registered the year before.

And advisers have suggested there is potential for intermediaries to enjoy an even greater market share in the years ahead.

No direct route

Lee Flavin, co-founder of Accelerate My Mortgage, suggested that the increase in mortgages going through an intermediary may also have been down to the attitude of lenders towards selling their mortgage directly.

He explained: “I’ve heard of many instances where a potential borrower had to wait weeks for a telephone appointment to go through the application process with a lender directly, at the height of the stamp duty holiday. If that’s happening at telephone level, what are the branch waiting times? The direct approach wasn’t there for many borrowers when they needed the funding urgently ‒ speed is so important ‒ so they may have tried a broker instead.”

Complicated times

Dominik Lipnicki, director of Your Mortgage Decisions, argued that lenders employing more complicated criteria had made the process of applying for a mortgage more daunting, which boosted the appeal of independent advice, adding: “More independent access to the whole market is attractive to savvy customers who do their research”.

James McGregor, director at Mesa Financial, agreed that the move towards stricter criteria, with lenders adopting more manual underwriting, had been a factor. 

“Criteria were changing daily at one point, which meant it needed that level of experience a broker brings to navigate these complexities.”

McGregor noted that it wasn’t just lender criteria that was becoming more complicated though; the pandemic impacted the financial situations of so many would-be borrowers, which pushed more of them to make use of advice rather than attempt to go it alone when securing a mortgage.

How do I choose?

Lipnicki also pointed to the significant numbers of mortgage products available as a driver for borrowers seeking advice. According to data released by Moneyfacts last week, there are now 4,812 mortgage products available to borrowers, almost double the number on offer a year ago.

He continued: “With thousands of products to choose from, advice-fuelled decisions make sense to more and more people. Gone are the days when clients are happy to switch from one product to another without looking at other lenders first. As with some other financial services such as insurance, brand loyalty to lenders is not important to many clients.”

Can brokers do more?

McGregor argued there was cause for confidence that the broker market share would increase further in the coming years, suggesting that as lenders try to reduce their headcount and automate their processes, they will likely lean on brokers to increase distribution.

He continued: “It does not make sense for lenders and banks to try and take business directly due to the huge cost this brings due to employing back office staff and advisers. Also from a regulatory perspective, the FCA should not allow regulated products to be advised on when there are no alternatives, this is not giving advice.

“For example, a bank mortgage adviser advising a client and not giving advice about what else is available ‒ this is not advice and surely opens them up to future complaints.”

Spreading the word

Flavin argued that finding a new way to reach customers improved his firm’s reach. The Accelerate My Mortgage proposition ‒ where customers earn cashback when shopping online which is then used to fund overpayments on their mortgages ‒ benefited from the pandemic, according to Flavin. 

The closure of the high street meant people had no option but to shop online, which meant there was a large userbase of potential customers for his brokerage to discuss switching deals with.

Flavin also noted that his firm had received a grant from Creative Wales to develop an Accelerate My Mortgage iOS app, which had helped him reach more people with the concept, and by extension increased the number of people open to receiving mortgage advice.

McGregor suggested that the best marketing for brokers was a combination of sharing expertise, customer reviews and real case studies.

He added: “Our industry is about trusted relationships rather than faceless transactions. Whereas brand loyalty to lenders is not prevalent, brand loyalty to advisers is very common.”

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