September 3, 2015
Recent figures from the Council of Mortgage Lenders show that the proportion of adviser-introduced new home loans have now reached their highest-ever level, with brokers now responsible for 69% of all mortgages. This represents a 7% annual increase and beats the previous high set in the opening three months of 2008. The dominance can be attributed to a number of factors, but chief among these is consumers needing more assistance throughout the mortgage process as a result of the increased complexity introduced by the Mortgage Market Review. This has made things tougher for those attempting to navigate the mortgage maze alone and has meant intermediaries who are up to speed with what is required by each lender and where to go to place each deal worth their weight in gold.
This represents quite a turnaround for mortgage brokers who suffered in the aftermath of the financial crisis when their market share fell below 50%. There have been tough times since then, but the expertise offered by recession-hardened intermediaries has proved invaluable and, while, there has been some attrition in terms of broker headcount, the importance of good advice has never been keener. Interest rates may be at historic lows, but this increased competition makes it harder for consumers to find the best deal, so a helping hand is invaluable.
But while brokers are making hay when it comes to mortgage activity, the latest gross bridging lending figures show that the short-term finance sector is thriving too. The latest statistics from our Bridging Index show that lending increased by 30% in the year to June 2015 and now stands at £2.8bn on an annual basis. While intermediaries account for a significant percentage of bridging business too, it still feels as if there is a swathe of brokers who haven’t fully woken up to the potential of bridging and when it might be suitable for their clients. Far from simply opening up an additional revenue stream for themselves, it enables them to offer a more complete proposition and potentially help clients they may have previously turned away.
Specialist lending has come and leaps and bounds in my decade in the industry and this is an exciting time for the sector as increased regulation and the shift in second charge mortgage jurisdiction to the Mortgage Credit Directive enhances the transparency and credibility of alternative types of finance. Among the motivations to embark on a career as a broker, one of the often cited reasons is a desire to help customers and the satisfaction that is derived from doing so. To this end, brokers should want as wide a suite of products to choose from as possible and, while bridging may not be appropriate in every situation, an understanding of quite how versatile and useful it can be in certain circumstances will only benefit some of their more complex clients.