Lenders trying to squeeze out brokers?

A significant minority believe their service offering is now less representative than it was, with respondents regarding their ability to look across the whole market as a broker's most important attribute.

In the survey of 486 brokers conducted during September, well over half (54%) said that having searched the market the appropriate product was sometimes not available via brokers, and only about a fifth (22%) said this had not occurred. Where the most suitable product was not available to intermediaries, the majority of them (63%) have still recommended that product on at least one occasion, and 37% said they suggested the customer contact that lender direct. 20% of respondents reported that they had suggested another product or lender but their customer had declined the recommendation.

Over a quarter of respondents (28%) felt that recent developments have made intermediaries' service offering less representative of the whole market - although a larger 67% reported no change. Less than 6% believed there had been an improvement. Indeed, brokers consider their ability to look across the whole market as their most important selling point to potential clients - mentioned by 76% of respondents and by far the highest response. Not being tied to a particular lender came second.

IMLA's executive director Peter Williams commented: "The market has become increasingly more difficult for intermediaries. They are they struggling with sharply lower business volumes, as mortgage activity has shrunk considerably and home buying activity is depressed. In addition, quite often they find that the most appropriate product for a given customer is only available direct from the lender - so they are effectively frozen out. Even so, most brokers will direct their customer to that product or lender, even if they do not benefit directly from it."

"The limited availability of some products, as some lenders favour direct sales through their networks, undermines the position of the intermediary and indeed the choice to the customer. In difficult market conditions, it is important that consumers are able to take advantage of the knowledge and expertise of intermediaries who can help them to source that all-important loan.

"Having said that the latest figures show that in the second quarter of 2008 intermediaries sold mortgages with a value of around £37 billion, around 68% of the total and though the volume will have fallen since then the broker sector still dominates the lending landscape. In our view, this will continue."