Brokers are now finding it easier to source a mortgage than at any time since the Mortgage Market Review in April 2014, according to the latest figures.
Nearly one in three (30 per cent) mortgage brokers reported having no problem sourcing a mortgage for any client-type in the second half of 2016, according to the latest statistics from the Intermediary Mortgage Lenders Association (IMLA).
The figure represents a 26 per cent rise on the first half of the year and is double the rate recorded in the first half of 2015 (15 per cent), amid signs of improving lending conditions and strengthening relationships between lenders and brokers.
Just 16 per cent of brokers said they were unable to source a mortgage for first-time buyers - down from 29 per cent in the first half of 2016 to 16 per cent, while the proportion who were unable to source a mortgage for standard status borrowers fell from 26 per cent to 15 per cent over the same period.
Brokers are also finding it significantly easier to cater for non-standard borrowers, including the self-employed those who have irregular incomes.
Proportion of brokers unable to source a mortgage for different clients in preceding six months:
| Feb-15 | Jul-15 | Feb-16 | Jul-16 | Feb-17 | |
| Standard status borrowers | 23% | 25% | 22% | 26% | 15% |
| Near-prime borrowers | 26% | 22% | 21% | 28% | 18% |
| Adverse credit borrowers | 54% | 49% | 46% | 54% | 46% |
| Self-employed borrowers/borrowers with irregular incomes | 46% | 47% | 40% | 50% | 25% |
| ‘Lending into retirement’ borrowers | 50% | 51% | 43% | 43% | 29% |
| Interest-only borrowers | 54% | 51% | 39% | 52% | 31% |
| First-time buyers | 21% | 20% | 21% | 29% | 16% |
| Buy-to-let borrowers | N/A | 22% | 22% | 33% | 34% |
| No problem for any client in the last six months | 16% | 15% | 26% | 26% | 30% |
The improved figures are set against a backdrop of falling rates, with Bank of England data showing the average 2-year fixed-rate mortgage at 75 per cent loan-to-value (LTV) dropped 45 basis points (bps) from 1.90 per cent to 1.45 per cent between December 2015 and December 2016.
Both lenders and brokers believe the remortgage market has the best prospects for growth in 2017, followed by lending to first-time buyers.
IMLA’s executive director Peter Williams described the figures as ‘hugely encouraging’.
He added: “Over the past few years, regulations like the Mortgage Market Review (MMR) have raised the bar in terms of borrowers’ requirements, which some predicted would leave many borrowers locked out of the market.
“This new regulatory regime has made the intermediary channel more important than ever, and brokers are clearly doing a great job of helping people get a foot on the housing ladder.”
Tony Catt, compliance consultant at TC Compliance Services, East Sussex, commented: “I think that the groundswell of opinion is that it is a bit easier to source a mortgage. A lot of lenders were spooked by MMR and there was a knee-jerk reaction regarding various things like self-certification and buy-to-let, and they have gradually loosened them up again.
“I think remortgages have increased in popularity from the point of view that a lot of people would rather remortgage than pay the cost of moving that increased with the extra costs of stamp duty, and also the deals are now very attractive, so I can see that remortgage will be a major part of the lending field.”
Mr Catt added that lifetime mortgages - equity release - could be a bigger growth area during 2017, adding he thinks the take-off in this market is only just beginning.
simon.allin@ft.com
