Branches flounder as brokers benefit

The Association of Mortgage Intermediaries chief executive said the only thing that could reverse the trend of brokers taking market share away from banks and building societies direct would be if lenders poured investment into much better technology, which he said wouldn’t be seen in under 10 years.

He said: “The advent of lenders changing technology might drive consumers down a different route but it’s not likely in the market we know today.”

Current estimates put the intermediary share of the mortgage market at around 65% at the moment.

Nigel Stockton, financial services director at Countrywide, agreed with Sinclair's view that brokers would have a stellar year and said while he predicted that mortgage lending this year would fail to hit the Council of Mortgage Lenders’ estimate for 2015 because bank branches simply couldn’t sell enough mortgages, brokers would take more of the market.

Stockton estimated gross lending will be somewhere between £210bn and £220bn over 2015 – just shy of the £222bn the CML believes the market will see.

He said: “Branches are having a bit of a shocker so far this year and my guess is that they won’t manage more than £75m before the end of the year. Brokers are up 10% already and are having a great year.”

In December the CML forecast gross lending of £222bn in 2015, up by 8.8% from £204bn last year, rising to £240bn in 2016.

But so far this year lending has been relatively subdued with January seeing £14.8bn gross lending, February £13.6bn and estimates for March showing £16.5bn. Q1 last year saw £46.3bn lending done in total while figures for the first quarter this year are down on that at £44.9bn.

Earlier this year the Intermediary Mortgage Lenders Association predicted gross lending would hit just £210bn in 2015 and £220bn in 2016, calling this the “new normal”.

Jeremey Duncombe, director of Legal & General Mortgage Club, said: “The time for the intermediary is now – for the next two or three years we have that opportunity with the market in our favour to make sure that customers are aware of what a great proposition the intermediary gives.

“My message to brokers would be talk to your customers to make sure they know what a good deal you can do and then the lenders will react three or four years down the line and start to invest in their technology. We need to prepare for that.”