For immediate release
20 May 2009
Broker Market Will Shrink Further in 2009, Says IMLA
The numbers of brokers operating in the intermediary mortgage market has further to shrink according to the latest member survey from IMLA. Although all IMLA members believe the Bank of England’s quantitative easing programme will help to stimulate new mortgage lending, two thirds of member lenders said they expect the broker market to shrink in 2009.
Lending via intermediaries has come down from its peak of 77% of all mortgage lending in Q1 2008, to 62% in Q1 2009. This is still significantly higher than AMI’s prediction that lending via intermediaries will account for just 45% of the market this year.
IMLA executive director, Peter Williams, said: “This is a tough market for everyone – lenders are fighting to stay fit, and brokers will have to do the same. The mortgage market is less than half the size it was at its peak – unfortunately that means brokers have to compete hard for the reduced business there is in the market. IMLA is working to help restore lending volumes and even if the market only achieves £150 billion gross in 2009 this is still a substantial market. Brokers need to focus on attracting good quality borrowers - writing high credit quality loans will help brokers stand out from the crowd.”
The survey also shows that two thirds of IMLA members believe there is a difference in the credit quality of loans sourced by appointed brokers and those sourced by directly authorised brokers. Of the lenders who saw a difference in credit quality, all said that appointed representatives produced a higher credit quality of business on a consistent basis.
Peter Williams continued, “The restricted volume of business available may look like a threat to brokers, but it can be seized as an opportunity. IMLA members accept business from the whole intermediary market, but clearly the volumes on offer won’t support all brokers. Doing detailed fact finds with customers and ensuring they are matched with the most appropriate product will both satisfy TCF principles and should improve the quality of business brokers can offer lenders. Directly authorised brokers can compete with appointed representatives, but they must make every effort to deliver consistently good quality business.”
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For further information please contact:
Peter Williams, Executive Director, IMLA
Tel: 020 8390 5872 or email consultpwilliams@btinternet.com
Brian Thorn/ Sarah Davidson, Wriglesworth
Tel: 020 7427 1400
NOTES TO EDITORS
IMLA is the specialist trade body representing the interests of lenders who market their products primarily through brokers, rather than direct or through a branch network. The sub prime market makes up around 8% of the UK mortgage market and had a value in excess of £20 billion in 2005. Alongside that market is the self-certification market making up a further 10% and with a value in 2005 of around £30 billion. Both sub-prime and self-certification loans are almost exclusively sold via brokers rather than direct through lenders’ branches. Currently over 60% of mortgages are sold through intermediaries.
IMLA provides a unique opportunity for senior industry professionals to meet on a regular basis to discuss key current initiatives and contribute actively through IMLA and other fora such as the Council of Mortgage Lenders.
IMLA was formed in 1988 as the Association of Mortgage Lenders and was instrumental in the creation of the CML. It changed its name to IMLA in 1995. Subsequently IMLA helped bring the Association of Mortgage Intermediaries (AMI) into being and was instrumental in bringing the mortgage advisers qualification CeMAP to fruition.
More information can be viewed at the IMLA website www.imla.org.uk.
IMLA Management Committee 2009
Chairman
Godfrey Blight
Managing Director, Sales & Marketing
GMAC-RFC Limited
Directors
John Heron
Managing Director
Paragon Mortgages Limited
Tony Ward
Managing Director
Home Funding
Colin Shave
Chief Executive Officer
GE Money Home Lending
Bob Young
Managing Director
CHL Mortgages
Executive Director
Peter Williams
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