In need of a broker champion

Ed Miliband’s recent leadership victory prompted me to reflect how we are missing intermediary champions at the moment.

Lenders and trade bodies alike are conspicuously quiet except in reaction to initiatives from the Bank of England and regulator who are increasingly the only voices easily heard.

This reactive approach is in part a consequence of where we are. Trade bodies are in defensive mode and with so few lenders actively lending, it’s hard to find many being vocal about its future. It is a sobering thought that £9 out of every £10 of mortgages is lent by Britain's five biggest banks and Nationwide, and last year Lloyds Banking Group reduced its lending by over half.

Of course it was not alone but given this retrenchment no-one has been able to fill the hole left behind. There is too little lending in too few hands and tougher capital adequacy and the cost and comparative lack of liquid retail savings to fund lending is making some lenders appear as if they are in “run off”.

This will not change soon, since banks face a series of deadlines to repay £165bn from the Bank of England's special liquidity scheme, but will not last forever.

While there are milestones to overcome such as the removal of credit guarantees among banks, and uncertainty in the job market, we should take care to ensure we are not left with a rump industry when conditions improve.

By October 20th we will know more about the extent of the imminent public sector spending cuts and what they actually mean to all of us.

The fear of these cuts has impacted lenders and consumers behaviour already, the reality could produce some startling changes. What effect are we as an industry having on any of this?

The banks for sure are lobbying hard for their own discrete interests but do not assume it is in the interests of home owners.

At some point we have to emerge from the shadows of the credit crisis with a plan for the future of intermediary distribution that is more than a consequence of lenders’ strategies.