Gross mortgage lending could reach £145bn in 2013 with brokers accounting for a greater proportion of business, according to the Association of Mortgage Intermediaries.
AMI’s quarterly economic bulletin says the FSA’s impending ban on non-advised sales, which will come into force in April 2014 as part of the MMR, along with the Government’s NewBuy scheme, should contribute to a greater proportion of mortgage business going through intermediaries next year.
Sinclair believes lenders will have to adapt to the non-advised sales ban in the coming months, favouring intermediaries as a distribution channel instead of training their own staff to give advice.
In a consultation paper published in December, the FSA proposed that sales must be advised where there is an interaction between the customer and the lender. However, it watered that proposal down in the MMR final rules, published last month, meaning that contract variations such as changing the payment method or rate switches can be carried out on an execution-only basis.
AMI chief executive Robert Sinclair says: “We expect to see gross lending pick up a little in 2013, possibly reaching £145bn, with a larger proportion through brokers than of late thanks to the FSA rules on advice and NewBuy schemes. Most new build sales are via brokers because the developers require borrowers who have been properly vetted for affordability, and see intermediaries as efficiently managing that process.”
For 2011 as a whole, estimated lending totalled £140bn, according to the Council of Mortgage Lenders.
Sinclair adds that while affordability levels have begun to improve, first-time buyers are still struggling to find a mortgage.
He says: “House prices are back to the levels last seen 10 years ago, but London and the South East defy the national trend. The improvement in affordability, however, has not led to greater accessibility of mortgages which leaves first-time buyers still frozen out of the market. As the credit market is not likely to ease in the near future, house prices are likely to continue to fall in real terms.”