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UK Mortgage Intermediary Distribution 2010
http://www.aarkstore.com/reports/UK-Mortgage-Intermediary-Distribution-2010-118965.html
Introduction
2010 proved to be another challenging year for the overall mortgage market and for the intermediary sector in particular. Intermediaries had to deal with the declining volumes of business, falling market share as a result of the focus on direct distribution, and uncertainty over the shape of proposed regulation of mortgage distribution.
Features and benefits
* Presents findings from Datamonitor’s Intermediary Distribution Survey to highlight the key trends and issues facing intermediaries.
* Provides an overview of the main developments in the mortgage market and intermediary sector in 2010.
* Analyzes the market context in which mortgage intermediaries operate.
* Provides forecasts for the value of gross lending conducted via the intermediary channel, and for intermediary market share.
Highlights
The mortgage intermediary sector continued to contract in 2010, with many member exiting the industry due to a lack of viability. This was the result of gross lending volumes falling across all lines of business, adversely affecting income levels. However, the sector is now leaner, fitter and more efficient as a result of these changes.
Intermediaries remain pessimistic, expressing concern about poor consumer demand, the weakness of the economic recovery and stagnant property prices. They also feel that their share of the market will continue to fall, and are less inclined than last year to expect the value of business they handle to increase.
Brokers are adapting their business models to survive in the current climate and to address the impact of dual pricing. Fee charging will start to supersede commission-based models, allowing intermediaries to advise on the whole of the market. Diversification into other products and services, such as financial planning, has become commonplace.
Your key questions answered
* Gain an insight into the views, opinions and concerns of intermediaries.
* Understand the consequences of the ongoing downturn in the mortgage market for the intermediary sector.
* Use Datamonitor’s forecasts to help plan your future distribution strategies.
Table of Contents :
Overview 1
Catalyst 1
Summary 1
Executive Summary 2
Difficult market conditions for mortgage intermediaries persisted throughout 2010 2
There are several different distribution channels for mortgages in the UK 2
The number of intermediaries continued to fall in 2010 3
Trend: Datamonitor predicts tough conditions for intermediaries for many years 4
Insight: intermediary-sourced lending will grow modestly under the neutral forecast 4
Trend: intermediaries are less hopeful about the state of the market than they were last year 5
Insight: brokers believe that a recovery is further away than before 6
Trend: intermediaries have become more pessimistic about their own prospects 6
Insight: the proportion of brokers who believe they will do more lending in the coming year has fallen 7
Trend: brokers are changing their business practices to reflect the new reality 7
Insight: brokers are starting to charge upfront fees 7
Trend: lenders are directing their efforts towards direct distribution 9
Insight: brokers feel they are losing market share to lenders 9
Trend: broker incomes are continuing to fall 10
Insight: there has been an increase in the proportion of brokers reporting falls in product commissions 10
Defining the Intermediary Sector 22
Difficult market conditions for mortgage intermediaries persisted throughout 2010 22
There are several different distribution channels for mortgages in the UK 22
The number of intermediaries continued to fall in 2010 23
The industry is now leaner but also fitter 24
Half of intermediaries report having no more than 500 clients 25
Individual brokers have seen a slight upturn in activity 26
Mortgage volumes remained steady in 2010 26
There has been an overall increase in the value of mortgages arranged by brokers 27
Individual brokers saw a fall in the value of mortgages arranged in 2010 28
Buy-to let lending was the least badly affected category of mortgage in 2010 29
The share of lending claimed by brokers has fallen drastically since 2007 and 2008 31
Quarterly lending arranged by intermediaries is two thirds lower than at the top of the market 32
Intermediary lending has fallen at a greater rate than total market lending 33
Intermediaries choose providers on the basis of rate and level of support 34
Rate, reliability and quality of service are all key to choice of lender 34
Procuration fees are of lesser importance than rate and service-based factors 35
Rate, speed and service all play a role in persuading intermediaries to switch lenders 36
Intermediaries appear to be only mildly concerned about key aspects of the market 37
Commission levels are a cause for slight concern 37
Concern with receiving adequate support from networks has declined over the last two years 37
The mortgage market is concentrated in the hands of a few large providers 38
The big banks have increased their dominance of the mortgage market since the banking crisis 38
Intermediaries are dependent on a select few lenders 39
Market Context 41
The lack of credit availability is still restricting lending 41
The aftermath of the credit crunch continued to hold back activity in 2010 41
The first time buyer market remains badly affected by the lack of mortgage finance 42
A sizeable proportion of consumers are still being refused credit 42
Consumer demand for mortgage finance was also subdued in 2010 43
A lack of both demand for and supply of mortgage finance resulted in low lending levels in 2010 44
2010 was a less turbulent year for mortgage networks 45
Far fewer networks found themselves in difficulty in 2010 than in 2009 45
Some networks have seen considerable changes in their AR numbers 46
Remortgaging activity continues to be hit by the low base rate 47
Remortgaging flatlined throughout 2010 47
The lack of consumer demand for remortgaging is confirmed by Bank of England data 49
Remortgaging is likely to remain low throughout 2011 49
The FSA is still in the process of reviewing the regulation of the mortgage market 50
The FSA has published a consultation paper on distribution and disclosure 50
Article Source: http://www.articlesbase.com/mortgage-articles/uk-mortgage-intermediary-distribution-2010-market-research-report-4653999.html
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Tags: business models, datamonitor, economic recovery, market diversification, market research report, market share, mortgage, mortgage intermediaries, mortgage market, uk mortgage, viability