Sarah Davidson is deputy editor of Mortgage Introducer
It shouldn’t come as a surprise that the latest numbers from the Council of Mortgage Lenders show brokers are still doing the lion’s share of British mortgages. It’s been that way at least since April 2005 when the CML started recording the intermediary/direct split.
In Q4 last year 57% of borrowers looking to buy for the first time, remortgage or move house chose to use an adviser to help them arrange their mortgage. For first time buyers the proportion of borrowers using a broker was 63%.
But somehow the intermediary community collectively feels relieved and gratified when the hard facts confirm what they know to be true. Consumers want advice. They value advice. They need advice.
So why the relief when the numbers show it? Because that dual pricing spectre still looms large and the big six lenders are still keen to make better use of their branches by bringing more mortgage business in through their own doors.
Brokers also continue to feel rather demonised despite a general acceptance in the market that the so-called “cowboys” are gone.
Well, time to take the bull by the horns. As a profession (and yes, mortgage brokers should be thinking of themselves as professionals) intermediaries can help themselves out of this state of mind.
It’s all very well spouting the mantra consumers need advice but a proactive approach can fall by the wayside as existing client business, admin and compliance pile up. And that isn’t going to help support the intermediary market in the long term.
With this week expected to see official statistics reveal inflation is running at a whopping 4% brokers have a perfect opportunity to prove their worth. Inflation at this level will spark serious debate about when the base rate should rise. Trying to be precise about exact timings is a pointless endeavour but one thing is fairly certain: lenders would be tempting fate not to be factoring at least a 25 basis point rise before the year-end into their pricing.
With so much talk in the financial press about potential rate rises and the consequent impact that will have on the cost of a mortgage, it can be easy to assume that consumers are aware of this possibility. But a significant proportion of people will be oblivious.
It’s those people who need brokers’ advice. It’s also those people who won’t be getting in touch with brokers to ask for that advice.
Changing the industry’s state of mind about intermediaries deserving the lion’s share of mortgage business is as much about brokers walking the talk on professional mortgage advice as it is about lenders improving the flow of money available to lend.
While brokers can’t control the amount of cash lenders have to lend, they can work harder to help their clients deal with a tricky market.
Raging inflation is unwelcome news for most of us but for brokers, it’s just one more reason to remind your clients why they made the right choice going to you and not direct to their bank.
