The housing market may be booming but intermediaries are missing out on much of the action as their market share tumbled over the past 12 months.
Just 53% of all mortgage sales in 2013 have gone through intermediaries, a drop of 14% in the last 12 months, according to a new survey by financial services technology specialist Avelo.
The forthcoming mortgage market review (MMR) could make life even harder for brokers, with 60% of lenders predicting the broker population will decline as a result.
More than 55% of lenders said the amount of mortgage business they write will also decrease.
Some 30% of mortgage sales now going through branches, up from 22% last year, following heavy lender investment into their branch networks.
Lenders with more than 5% of market share were less likely to use intermediaries, conducting 47% of lending through their branches.
Mutuals relied more heavily on intermediaries, conducting nearly 69% of their mortgage business this way, although this was a 5% drop on last year.
But there was some good news for brokers. Despite the decline, they remain the most effective mortgage channel, with 62% securing an offer, against 57% for all other channels.
And although lenders predicted the number of brokers would fall after MMR is introduced 26 April 2014, seven out of 10 thought the proportion of advised mortgages will rise.
Mortgage processing times have fallen this year, with 22% of lenders taking longer than 30 days to produce a mortgage offer, compared to just 11% a year ago.
Many lenders expect the time to offer will lengthen further under MMR, as they carry out more detailed manual and plausibility checks.
Henry Woodcock, principal mortgage consultant at Avelo, said: “So far, 2013 has been the best year for lenders since 2008. Not only is the mortgage market growing, but the largest lenders have been able to take advantage of their investment in high street branches to tap into growing buyer demand.
“The next year brings a host of challenges for lenders as MMR comes into force. With branches proving key, and advised sales predicted to climb, the question remains whether lenders will have enough qualified staff at branch level, or whether they will need to break up the sales process to allow qualified advice at the right times.
"The customer experience is vital, and lenders must put that at the heart of their changes for the new regulation. With buyers already having to wait longer to receive offers before the MMR has even kicked in, lenders must redouble their efforts to make the process as straightforward and as quick as possible.”
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