Edeus chief executive Michael Bolton believes the growing success of brokers will force major high-street mortgage lenders to merge in the next few years.
Bolton, speaking at the CML annual conference in London this week, said brokers have “never had it so good” and that their share of the mortgage market has increased dramatically since M-Day, which is forcing direct players to rethink their strategy. He predicted that there will be no more than two direct retail outlets in future.
Bolton said firms such as HBOS, Royal Bank of Scotland and Alliance & Leicester will be forced into consolidation as intermediaries’ share of the market has rocketed to around 80 per cent from 65 per cent at M-Day. He insisted that there is room for even more intermediary lenders.
Bolton said: “Year on year since M-Day, the broker market has equipped itself better than other distribution methods and the intermediary market has expanded at the expense of traditional outlets. There will be no more than two retail outlets in three or four years. There will be something called RBS/A&L/Abbey and something else called HBOS/ Citigroup/ and whoever else.
“Those businesses are not winning the argument. The quality of advice at the branch is nothing like that from intermediaries. There is plenty of room for new intermediary lenders.”