Mortgage experts are predicting a wave of consolidation in the homeloan market if the FSA forces lenders to police the regulation of mortgage advice.
Scottish Amicable nat ional mortgage manager John Malone says the mortgage market will follow the life industry and, within five years, there will just a handful of major lenders.
Experts say converg ence is the only way that brokers and lenders will be able to survive in a regulatory regime which is monitored by lenders, because of prohibitively high administrative costs.
Some brokers are unh appy with the FSA's disclosure proposals which could cause a shift towards exclusive partnerships with bigger IFAs, such as Brad ford & Bingley-owned Charcol.
Future Mortgages marketing manager Michael Bolton says: “With over 100 lenders in the UK market, it is not rocket science to expect ongoing consolidation but it will leave only the large or very small players because the market will squeeze out the mid-sized firms.”
Savills Private Finance managing director Mark Chilton says: “The way the Government is choosing to regulate will mean the big boys will just get bigger.
“Only the very small niche brokers will survive but generic broking will just fall out of the market. This is what happens when the Government interferes and does not do the job properly.”