Brokers surge into second charge advice

More than eight out of 10 of brokers plan to include second charges in their advice process this year.

A new survey by Legal & General Mortgage Club reveals that 32% of brokers will write second charges themselves, while a further 52% will refer cases to a master broker.

In total, 84% of brokers plan to include second charge loans in their advice process in 2016, following regulatory changes brought about by the Mortgage Credit Directive (MCD).

London will see huge rise in brokers writing second charges themselves, with 41% expecting to do so this year

These findings follow Legal & General Mortgage Club’s launch of a direct-to-lender proposition for second charge loans earlier this month.

Legal & General interviewed attendees at their recent Spring Events, asking advisers about the future of the intermediary market. 

The MCD requires brokers to advise on whole of market, which means mentioning the option of second charge loans to customers looking to extend their borrowing.

Brokers wanting to describe themselves as “independent” must also include second charge within the scope of their service.

Jeremy Duncombe, director, Legal & General Mortgage Club, said: “We’ve recognised the growing importance of second charge lending with the launch of our direct-to-lender panel, widening product choice for brokers and giving members direct access to lenders’ second charge products.”

Duncombe said brokers should also future proof themselves against any further changes that might challenge their hold on the market.

“Intermediaries should look to offer a holistic advisory service, from mortgages and secured loans to equity release and insurance.

“At the same time, advisers should also look to their back-books for business opportunities, where they can advise exiting customers on their options for remortgaging and ensure the products they have still suit their current circumstances.”