Across Britain, brokers now account for 80% of the mortgage business, Pierre Blampied, Managing Director at SPF Private clients, explains how this has come about and why it is a positive both for prospective borrowers and the housing market in Guernsey.
With Guernsey estate agents voicing concerns about a housing shortage, a local mortgage broker has stepped forward to explain how brokers are playing an increasingly important role in keeping an element of balance to the cycle of supply, demand and lending.
Their pivotal role is the result of more and more lenders embracing the benefits that brokers bring to the mortgage market and once again freeing-up access to the full range of their products. This has helped brokers across Britain capture the lion’s share of the market.
The Intermediary Mortgage Lenders Association (IMLA) reported that in April 2020 brokers accounted for 80% of the mortgage business in the UK, driven not only by their broad product ranges, but also by their ability to work more flexibly during lockdowns.
Pierre Blampied (pictured) explains: “If we go back a few years, a number of lenders were protective over their offerings with some only lending direct and others keeping set products to themselves, but as circumstances have changed banks and building societies have increasingly realised the benefits that the broker brings.
The key part in this is volume. With brokers serving such a large percentage of the market, allowing them to access all products, meaning much more exposure to prospective borrowers and our experience at SPF Private Clients is that all banks are keener than ever to work with us.”
So, what has tipped the balance in favour of brokers and why do they now have the majority of the market share? Pierre feels it’s not just about the range of mortgage products offered.
“Obviously, if a borrower approaches their own bank direct then the bank has no option but to offer one of their own products when there could be a better alternative on the market. Brokers aren’t tied in the same way, but I believe people come to us because our services can extend beyond basic product recommendation, we will look at term of the fixed rate, whether discount or tracker options are suitable, we can negotiate with lenders and liaise with advocates and surveyors.
@With some banks having fewer mortgage advisers this level of service can be difficult for them to achieve. Brokers can take the time to look at personal circumstances, accurately judge what the borrower can comfortably afford and then pick and choose the right form of finance. Local borrowers quite rightly, believe that brokers will provide them with the best solution at the best rate and that is reflected in the lending statistics.”
Pierre explains why this is important for the local housing market. “To a certain degree, brokers are the pace setters for the housing market, we are trusted to help as many people as possible obtain finance to enable property transactions to complete. In the current market we are also looking to lenders who can meet desired timescales and the brokers’ market share is significant enough that lenders are keen to respond.”
There may be no quick fix to the housing shortage but government, Guernsey Housing Association, developers, lenders and mortgage brokers will all play a part in re-balancing the situation.