Table of Contents
Introduction
-
- Market definitions
- Abbreviations
Executive Summary
-
- The market
-
- Figure 1: Forecast of gross mortgage advances, 2006-16
- Proportion of intermediary products expected to decline further
-
- Figure 2: Proportional distribution of regulated mortgage sales, by channel, 2006/07-2010/11
- Market factors
- Hopes of an increase in intermediary product numbers dashed
-
- Figure 3: TrigoldCrystal Product Index, average number of intermediary products available, April 2007-February 2012
- Regulation is hot topic for mortgage intermediaries
- Consumer confidence and buying intentions fall
- Companies and key players
- The number of mortgage advisers continues to decrease
-
- Figure 4: Number of mortgage and home finance firms, January 2006-December 2011
- The bigger intermediary businesses are in a safer survival position
- The adviser
- Competition from direct products is the biggest challenge facing intermediaries
-
- Figure 5: Biggest challenges currently facing mortgage intermediaries, March 2012
- Increasing marketing activity is the top priority for intermediaries
-
- Figure 6: Main intermediary priorities for next six months, March 2012
- The threat from direct sales is increasing
-
- Figure 7: Threat from direct sales, March 2012
- Mortgage intermediaries are struggling to help some clients….
-
- Figure 8: Proportion of clients intermediaries unable to assist, March 2012
- … with affordability issues and maximum LTV being reached responsible
-
- Figure 9: Main reasons that intermediaries are unable to assist clients, March 2012
- What we think
Issues in the Market
-
- Will the increase in direct sales pose a serious threat to intermediaries?
- Increasing regulation – friend or foe?
- What can intermediaries do to secure their position in the market?
- Will Buy-to-Let be the saviour of mortgage intermediaries?
- How can the relationship between lenders and intermediaries be improved?
Future Opportunities
-
- Mortgage intermediaries can guide applicants through the mortgage maze
- Relationship building and cross-selling are the key to intermediary survival
Internal Market Environment
-
- Key points
- Bank of England base rate remains low but SVR mortgages are no longer falling in line
-
- Figure 10: Bank of England base rate, three-month (monthly average) LIBOR and new mortgages effective rate, January 2005-February 2012
- Number of intermediary products remains low
-
- Figure 11: TrigoldCrystal Product Index, average number of intermediary products available, April 2007-February 2012
- Number of monthly mortgage approvals
-
- Figure 12: Number of monthly mortgage approvals (seasonally adjusted), by type, January 2009-January 2012
- Number of direct mortgage products on the up
-
- Figure 13: Trigold crystal product index, average number of direct products available, April 2009-February 2012
- Mortgage switching levels
-
- Figure 14: Proportion of mortgage-holders who have changed mortgage provider in the past 12 months, 2007-11
- Repossession rates increased slightly in 2011
-
- Figure 15: Mortgage arrears and repossessions, Q1 2008-Q3 2011
- MMR will lead to fewer mortgages and higher costs
- Changes to the mortgages being sold
- Growing market for buy-to-let
-
- Figure 16: Annual percentage change in gross advances – buy-to-let versus total mortgage market, 2002-11
- 2011 saw an increase in demand for BTL
-
- Figure 17: Demand for buy-to-let and prime lending (house purchase), Q1 2008-Q4 2011
- Government scheme to help buying – NewBuy scheme
Broader Market Environment
-
- Key points
- Low level of consumer confidence is hindering the property market recovery
-
- Figure 18: GfK NOP Consumer Confidence Index, January 1988-December 2011
- Consumers are dubious about their ability to find a new mortgage
- Falling housing market intentions show that people lack confidence in the property market…
-
- Figure 19: Expected mortgage and property purchase activity, Q3/Q4 2002-Q3/Q4 2011
- ... yet property as a long-term investment is very much valued
-
- Figure 20: Attitudes towards mortgages, January 2012
- Property prices set to remain low
-
- Figure 21: Annual house price growth in the UK – comparison of four different sources, Q1 2005-Q3 2011
- Property prices expected to remain stagnant over the next 12 months
-
- Figure 22: Property price expectations over the next 12 months, January 2012
Regulatory Context
-
- Key points
- General intermediary view of regulation
- Mortgage Market Review – an Overview
- The Conduct of Business Reforms part of the MMR looks at:
- The Prudential Reform part of the MMR looks at
- The Niche Markets part of the MMR looks at:
- Impact of the MMR on intermediaries
- Responsible lending
- Distribution and disclosure
- European Commission mortgage review
Competitive Context
-
- Key points
- Instability in the market sees lenders keen to offer more direct products
-
- Figure 23: Average number of intermediary and direct mortgage products available, April 2009-February 2012
- Warning of potential return to dual pricing strategies…
- … yet intermediary exclusive deals are returning with NewBuy
- 97% of intermediary products arranged with advice
-
- Figure 24: Advised sales, by selling channels, April 2010-March 2011
SWOT Analysis
-
-
- Figure 25: SWOT analysis
-
Lending Market Overview
-
- Key points
- Gross mortgage lending figures show some resilience
-
- Figure 26: Total mortgage lending, by gross and net advances (not seasonally adjusted), 2001-12
- Remortgaging activity increases by 17% over the last year
-
- Figure 27: Gross mortgage lending, by type of loan, 2005-11
- FTBs still struggling to meet deposit requirements
-
- Figure 28: Loans advanced for house purchase, by type of borrower, 2005-11
- BTL lending accounts for 10% of all mortgage lending
-
- Figure 29: Number and value of new BTL mortgages sold, 2003-11
Intermediary Share of the Mortgage Market
-
- Key points
- Direct channels account for 52% of regulated mortgage sales in 2010/11
-
- Figure 30: Proportional distribution of regulated mortgage sales, by channel, 2006/07-2010/11
- Opportunities for intermediaries in 2012
- Intermediary business looking to diversify to survive
Mortgage Intermediary Marketplace
-
- Key points
- The number of mortgage advice firms continues to decline
-
- Figure 31: Number of mortgage and home finance firms, January 2006-December 2011
- Intermediaries must differentiate to survive
- Both DA and AR numbers are falling
-
- Figure 32: Number of mortgage and other home finance ARs and DA intermediary firms, by type, December 2007-December 2011
Mortgage Lenders/Intermediary Relationship
-
- Key points
- Dual pricing and direct selling – what are the reasons?
- How can the relationship be managed for mutual benefit?
- Where are the opportunities for intermediaries?
- Procuration fees – a threat to the lender – intermediary relationship
Company Profiles – Key Intermediary Players
-
- Intrinsic Financial Services
- Legal & General
- Openwork
- Personal Touch Financial Services
- Sesame Bankhall
Brand Communication and Promotion
-
- Key points
- Mortgage intermediary advertising spend starts to creep up
-
- Figure 33: Amount spent on advertising in the mortgage intermediary sector, 2007-11
- Mortgage market conditions could boost this sector
- Mortgage Works from Nationwide tops intermediary adspend in 2011
-
- Figure 34: Top ten advertisers in the mortgage intermediary market, 2009-11
- Press advertising dominates mortgage intermediary adspend
-
- Figure 35: Advertising channels in the mortgage intermediary sector, 2011
Mortgage Adviser Research – Confidence and Market Conditions
-
- Key points
- Market conditions mean that intermediaries are struggling to help some clients
-
- Figure 36: Proportion of clients intermediaries unable to assist, March 2012
- A lower standard of client is harming the intermediary business
-
- Figure 37: Main reasons that intermediaries are unable to assist clients, March 2012
- Confidence levels remain buoyant amongst mortgage intermediaries
-
- Figure 38: Intermediary confidence for the future, March 2012
Mortgage Adviser Research – Challenges and Priorities
-
- Key points
- Competition from direct products is the key concern for mortgage intermediaries
-
- Figure 39: Biggest challenges currently facing mortgage intermediaries, March 2012
- Threat from direct sales is increasing
-
- Figure 40: Threat from direct sales, March 2012
- Intermediaries take steps to safeguard their businesses
-
- Figure 41: Main intermediary priorities for next six months, March 2012
Appendix – Market Background
-
-
- Figure 42: Overview of distribution channels within the mortgage marketplace since mortgage regulation
- Different types of mortgage advisers
-
Back to top