Lenders predict broker market decline post MMR
The survey, sent to lenders making up 57% of gross lending in 2012, also revealed over 55% of lenders believed the amount of mortgage business written by brokers would decrease.
Respondents reported an overall decline in the number of sales through intermediaries from 67% to 53% in the past year while branch sales climbed from 22% in 2012 to 30% this year.
Avelo said this was due to large lenders’ increased investment in their branch networks. Lenders with more than 5% of market share in the mortgage market have conducted almost half of lending in branch.
Henry Woodcock, principal mortgage consultant at Avelo, said: “So far 2013 has been the best year for lenders since 2008. Not only is the mortgage market growing but the largest lenders have been able to take advantage of their investment in high street branches to tap into growing buyer demand.”
But the increased volume of lending is having an adverse impact on service levels.
This year the average time for a customer to receive a mortgage offer has slowed. The number of lenders taking longer than 30 days to produce an offer has risen to 22% from 11% a year ago.
At the other end of the spectrum 13% of lenders typically produced an offer in less than five days compared to 18 in 2012.
Many lenders foresee the time to offer will lengthen further following the Mortgage Market Review along with more detailed manual and plausibility checks.
However lenders are generally optimistic on the prospects of mortgage sales following the MMR with more expecting an increase in sales than a decrease in every channel except via telephone.
Woodcock added: “The next year brings a host of challenges for lenders as the MMR comes into force. With branches proving key and advised sales predicted to climb the question remains whether lenders will have enough qualified staff at branch level or whether they will need to break up the sales process to allow qualified advice at the right times.”