Table of Contents
Introduction
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- Market definitions
- Abbreviations
Executive Summary
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- The market
- For now the threat from direct sales remains
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- Figure 1: Proportional distribution of regulated mortgage sales, by channel, 2007/08-2012/13
- Market factors
- Number of intermediary products increases
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- Figure 2: Avelo Product Index, average number of intermediary products available, April 2007-February 2013
- Companies and key players
- Number of advice firms continues to fall
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- Figure 3: Number of directly authorised firms in the mortgage intermediary sector, September 2006-September 2012
- The adviser
- Cautiously optimistic about the future
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- Figure 4: Expected change in intermediary annualised income over the next three and 12 months, January 2013
- Advisers are spending more time with clients
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- Figure 5: The effect that market conditions have had on the time that intermediaries spend with each client, January 2013
- Direct lenders still seen as a challenge to intermediaries
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- Figure 6: Challenges faced by mortgage intermediaries, January 2013
- Developing cross-sales is a main priority
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- Figure 7: Intermediary priorities for the next six months, January 2013
- The consumer
- Consumers use a mix of resources in arranging their mortgage
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- Figure 8: Sources of advice and information likely to use when researching/arranging a mortgage, December 2012
- Consumers are self-sufficient in undertaking their own research, but still need the reassurance of intermediaries
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- Figure 9: Mortgage application expectations and intentions, December 2012
- What we think
Issues in the Market
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- Who will win the battle between direct lenders and intermediaries?
- How can intermediaries demonstrate their value in the mortgage market?
- Can aggregators work with intermediaries?
- Will there be a move from face-to-face to remote advice?
Trend Application
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- Advisers can take the hassle out of buying a home
- Target future first-time buyers
- Mintel Futures: Generation Next
Market Drivers – Broader Market Issues
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- Key points
- Consumer confidence remains low
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- Figure 10: GfK NOP Consumer Confidence Index, January 2007-December 2012
- Property prices flat line
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- Figure 11: Annual house price growth in the UK – comparison of four different sources, Q1 2007-Q3 2012
- Upward swing in buying intentions
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- Figure 12: Expected mortgage and property purchase activity, Q3/Q4 2002-Q3/Q4 2012
- Mortgage rates remain separated from the Bank of England base rate
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- Figure 13: Bank of England base rate, three-month (monthly average) LIBOR and new mortgage effective rate, January 2006-January 2013
- Monthly mortgage approvals remain flat
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- Figure 14: Number of monthly mortgage approvals (seasonally adjusted), by type, January 2009-December 2012
- Number of repossessions continues to fall
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- Figure 15: Mortgage arrears and repossessions, Q1 2009-Q4 2012
- Buy-to-let continues to outperform, but the gap has narrowed over 2012
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- Figure 16: Annual percentage change in gross advances – buy-to-let versus total mortgage market, 2002-12
Market Drivers – Internal Market Issues
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- Key points
- Number of direct products continues to rise
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- Figure 17: Avelo Product Index, average number of direct products available, April 2007-February 2013
- Number of intermediary products increasing slightly, but nowhere near 2007 highs
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- Figure 18: Avelo Product Index, average number of intermediary products available, April 2007-February 2013
- Only half of direct sales are advised
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- Figure 19: Advised sales, by selling channels, April 2011-March 2012
- The Mortgage Market Review
- Government help to kick-start the mortgage market
- The Funding For Lending Scheme
- Help to Buy scheme
SWOT Analysis
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- Figure 20: SWOT Analysis, mortgage intermediary market, 2013
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Lending Market Overview
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- Key points
- Little change in gross and net advances in 2012
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- Figure 21: Total mortgage lending, by gross and net advances (not seasonally adjusted), 2006-12
- House purchasing increased in 2012, but remortgaging activity fell by 13%
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- Figure 22: Gross mortgage lending, by type of loan, 2006-12
- First-time buyer loans reach their highest level since 2007
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- Figure 23: Loans advanced for house purchase, by type of borrower, 2006-12
- Buy-to-let continues to grow
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- Figure 24: Number and value of new BTL mortgages sold, 2004-12
Intermediary Share of the Mortgage Market
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- Key points
- Intermediaries slightly increase their proportion of mortgage sales
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- Figure 25: Proportional distribution of regulated mortgage sales, by channel, 2007/08-2012/13
Mortgage Intermediary Marketplace
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- Key points
- The number of mortgage intermediaries continues to fall
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- Figure 26: Number of directly authorised firms in the mortgage intermediary sector, September 2006-September 2012
- Sole traders and partnerships feel the strain
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- Figure 27: Number of mortgage and home finance ARs and DA intermediary firms, by type, September 2008-September 2012
Company Profiles
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- Intrinsic Financial Services
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- Figure 28: Key financial data for Intrinsic Financial Services, 2010 and 2011
- Legal & General
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- Figure 29: Key financial data for Legal & General (housing and protection business segment), 2011 and 2012
- Tenet
- Openwork
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- Figure 30: Key financial data for Openwork, 2010 and 2011
- Personal Touch Financial Services
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- Figure 31: Key financial data for Personal Touch Financial Services, 2010 and 2011
- Sesame Bankhall
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- Figure 32: Key financial data for Sesame Bankhall Group, 2010 and 2011
Brand Communication and Promotion
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- Key points
- Advertising budgets have improved, but are a long way off pre-2009 figures
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- Figure 33: Amount spent on advertising in the mortgage intermediary sector, 2008-12
- Top five advertisers made up two thirds of expenditure in 2012
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- Figure 34: Top ten advertisers in the mortgage intermediary market, 2010-12
- Internet advertising to mortgage intermediaries has almost doubled since 2011
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- Figure 35: Advertising channels in the mortgage intermediary sector, 2011 and 2012
- Websites becoming a favoured form of advertising to intermediaries
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- Figure 36: Top ten advertising media used by the mortgage intermediary sector, 2012
- A note on adspend
The Adviser Outlook
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- Key points
- Advisers are cautiously optimistic about the future income
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- Figure 37: Adviser expectations of change in income over next three months and 12 months, January 2013
- Intermediaries cite clients remortgaging to get more competitive rates as a key reason for growth
- The slow mortgage market is the main cause for concern
- Advisers’ cautiously optimistic outlook is similar to last year’s
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- Figure 38: Adviser expectations of change in income over next three months and 12 months, January 2012
The Adviser – Time Spent with Clients
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- Key points
- Mortgage advisers are spending more time with their clients
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- Figure 39: How the time intermediaries spend with their clients has changed, January 2013
The Adviser – Challenges and Priorities in the Mortgage Intermediary Market
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- Key points
- Competition from direct lenders remains a challenge, according to 43% of intermediaries
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- Figure 40: Challenges facing mortgage intermediaries, January 2013
- Difficult economic conditions for first-time buyers seen as a challenge for advisers
- Advisers do not see the rise of online comparison sites as a challenge
- Almost half of advisers see developing cross-sales as their main priority
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- Figure 41: Mortgage intermediary priorities for next six months, January 2013
- Increasing marketing activity is a priority for almost 40% of advisers
- Few advisers planning to invest in new technology
The Consumer – Mortgage Arrangement Preferences
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- Key points
- Online sources are gaining popularity
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- Figure 42: Sources that consumers are likely to use when researching or arranging a mortgage, December 2012
- Consumers are more likely to turn to advisers in their own bank as a first port of call
- Consumers are likely to use a mix of sources when arranging their mortgage
- Price comparison sites are key for remortgage customers
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- Figure 43: Sources that consumers are likely to use, by mortgage application intentions, December 2012
- FTBs to look to their own bank/building society and the internet
The Consumer – Attitudes towards Applying for a Mortgage
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- Key points
- Almost half undertake their own research to find the best deal
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- Figure 44: Mortgage application expectations and intentions, December 2012
- A third of consumers need advice in order to apply for a mortgage
- Consumers are less likely to expect advice when remortgaging
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- Figure 45: Agreement with statements relating to arranging a mortgage/remortgage, by type of mortgage customer, December 2012
- Experienced consumers are the least trusting of bank-based advisers
- Bank/building society mortgage advisers are less trusted
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- Figure 46: Agreement with statements concerning trust in advisers, December 2012
- Self-sufficient consumers research the best deals before going directly to the lender
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- Figure 47: Agreement with statements relating to arranging a mortgage/remortgage, by sources likely to use, December 2012
- Consumers that use friends and family expect to need professional advice
- Intermediaries used to take the hassle out of applying for a mortgage
Appendix – Market Background
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- Different types of mortgage advisers
Appendix – Consumers Arrangement Preferences
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- Figure 48: Most popular mortgage research, by demographics, November 2012
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- Figure 49: Next most popular mortgage research, by demographics, November 2012
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Appendix – Consumer Attitudes towards Applying for a Mortgage
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- Figure 50: Most popular attitudes towards applying for a mortgage, by demographics, November 2012
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- Figure 51: Next most popular attitudes towards applying for a mortgage, by demographics, November 2012
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