Mortgages  

Non-advised mortgages drop by third since crash

Non-advised mortgages drop by third since crash

The number of non-advised mortgage sales has dropped significantly in the decade since the financial crash, with practically all customers now receiving advice according to Financial Conduct Authority data.

In its product sales data for mortgages published today (23 October), the FCA found the number of non-advised transactions fell to 3 per cent in the second quarter of this year compared with 35 per cent in the same period of 2008.

The figure has also marginally dropped from the previous quarter this year when it stood at 4 per cent.

The FCA defines non-advised sales as one in which no personal recommendation is made to the customer including execution-only and direct offer transactions.

The data showed a total of 297,184 mortgage sales completed in Q2 2018, an increase on the 273,340 seen in Q1 2018.

This follows the general market trajectory seen over the past few years with sales increasing as the year progresses before dropping off again in the year’s final quarter.

Accompanying the increasing number of borrowers seeking mortgage advice the number of sales completed through intermediaries had also risen, with 72 per cent of transactions completed through this channel compared with 57 per cent ten years ago.

Jonathan Harris, director of mortgage broker Anderson Harris, said: "It is great news that more people are seeking mortgage advice. The mortgage is most people’s biggest monthly outgoing so it’s important to make sure you have the right one."

Mr Harris said the financial crisis and increased awareness and availability of advice have helped with this.

He said: "Borrowers are more aware of the downfalls of opting for inappropriate products. With so much choice on the market when it comes to mortgages and tougher affordability criteria, which vary from lender to lender, seeking advice from someone who knows makes perfect sense."

Bob Riach, mortgage broker at Riach Financial, said this year was the busiest he has been in more than 40 years. 

He said: "I believe that mortgage advisers are more accessible now. More and more people are online and search for mortgage deals, but they are not confident enough to take the next step without taking advice."

rachel.addison@ft.com