Brokers are more than twice as likely to refer, than to write, secured loan business while the number of brokers who do not operate in the second charge market at all has dropped significantly since 2016, SimplyBiz Mortgages has found.
Some 60% indicated that they would refer secured loan business, whilst 25% said they would write the business themselves. Only 15% reported they were not involved in the second charge market at all.
Martin Reynolds, chief executive of SimplyBiz Mortgages, said: “The implementation of the Mortgage Credit Directive means that every broker needs to offer clients a facility for placing secured loan business in order to remain independent.
“The move from OFT to FCA regulation in 2016 meant that second charge products have seen a boost; improvements in cost and affordability testing have also helped to encourage more brokers into the market.
“Whilst many are still opting to refer the processing of these cases to master brokers, there has been a marked increase in the number of brokers writing the business themselves, and I believe this will continue to grow.
“Undertaking this research has improved our understanding of the development of the secured loan market, and broker engagement.
“In turn, this means that we have been able to evolve our proposition for Members of SimplyBiz Mortgages, and our direct to lender panel is now wider and more comprehensive than ever before.”
Matt Tristram, co-founder and director of Loans Warehouse, pointed to positives in the results.
He said: “There are two points to take from the results provided by SimplyBiz Mortgages. Firstly it’s evidence that second mortgages are still a specialist product.
“Mortgage brokers aren’t lazy they just look for the best for their customers as they are vital to their future.
“Whilst much has been made about the alignment of the process of first and second mortgage, the processing for the latter is more involved. If that isn’t the nature of your business trying to adapt and learn as you go, it doesn’t lead to a good customer experience.
“Whether you’re a first or second mortgage broker, is it not true that you’re usually better when you’re experienced?”
Tristram added: “Secondly, only 15% aren’t involved or don’t consider second charges. You hear a lot of small brokers moaning on social media and press articles that first mortgage brokers don’t refer business to them or don’t consider the product, clearly they do in the case of SimplyBiz so maybe they just don’t refer it to them?
“We aren’t on the SimplyBiz panel but we love reading these statistics as it’s clear their education program for second charge products is working, congratulations on a great job.”