Brokers, building societies and specialist lenders benefitted most from the mortgage market review, according to a report.
The end of non-advised sales has led lenders to source more business from brokers, an Intermediary Mortgage Lenders Association report has revealed.
Between the first quarter of 2014 – immediately before MMR implementation – and the final three months of 2014 the number of consumers using intermediaries rose by 20 per cent, while those going direct to lenders fell 6 per cent, the report revealed.
Specialist lenders and building societies are also enjoying a growing share of gross mortgage lending at the expense of banks, the report found.
According to the 24-page report, ongoing demand from ‘niche’ borrowers was providing these types of lenders with opportunities to grow, partly because the self-employed and other non-standard customers in the post-MMR world fit less well into the automated loan underwriting systems favoured by some larger lenders.
Imla’s report also stated turnover of a property has almost trebled since the 1980s from eight to 23 years.
The report argued that low housing turnover has been driven by people buying their first homes later; a larger private rented sector where turnover is lower; and by the baby boomer ‘hoarding effect’, where middle-aged homeowners are staying put, effectively tying up a large part of the housing stock.
Key Figures |
The estimated contribution of mortgage finance to the total value of UK housing transactions hit a new all-time low of 41.7 per cent last year. It means just £4.17 of every £10 spent on house purchases in 2014 was funded by mortgages. Cash or equity made up £5.83 of every £10 spent on house purchases. Imla |
Peter Williams, executive director for Imla, said: “Inertia in the property market spells danger for future owner-occupation levels, and the growing influence of cash and equity is sowing the seeds of a permanent social divide.
“Having said that, we will see some continued growth in mortgage lending – and as the market stabilises and wages rise, we may also start to see affordability improving.”
Last year, Imla’s December 2014 market research had found that 56 per cent of brokers reported an increase in the volume of cases placed with specialist lenders relative to summer 2014, ahead of 49 per cent with regional/local building societies, 48 per cent with national building societies, 38 per cent with high street banks and 36 per cent with challenger banks.
Adviser view
Martin Reynolds, chief executive at SimplyBiz Mortgages, said: “For the 18 months prior to MMR we saw a gradual movement of consumers preferring to see intermediaries.
“This movement has kicked up a few gears post-MMR as consumers look for guidance and whole-of-market advice. The role of the intermediary is now being recognised more widely, which is to be welcomed.”
