The shortage of brokers is nearing a tipping point following an upswing in business, say experts.
Association of Mortgage Intermediaries chief executive Robert Sinclair says things are “getting tight” and that soon there will be too few brokers to deal with increasing business levels.
Looking at Council of Mortgage Lenders’ latest figures, £62.5bn of loans completed in the first quarter – a 40 per cent increase on the £44.6bn of business completed a year earlier. However, this was in part down to borrowers trying to beat the buy-to-let stamp duty increase on 1 April.
Speaking last week as part of a panel at Money Marketing sister title Mortgage Strategy’s annual Leaders Forum, Sinclair estimated there are currently 12,000 brokers with a further 4,000 IFAs writing mortgages occasionally. It is estimated there were 30,000 brokers in 2007.
He said: “We look as though we’re about right [at the moment] but it is getting tight and we can see from evidence where as things have swung up in the first quarter, protection sales have started to drop off.
“That is a sign of pressure in my view, which says people don’t have enough time – or they are making enough money off mortgage transactions and a little off protection – to then be able to drop off stuff that is hard work to do or has compliance risks perhaps.”
When asked whether there should be a collaborative broker effort to boost recruitment, Sinclair said an industry-wide effort that included lender trade bodies might prove more successful.
Sinclair said: “I have taken this to my board and asked ‘ is this something AMI should be doing more on?’ and they have been quite clear about what AMI’s focus is and that it is not my job to start a recruitment strategy for the industry. Unless I get a different view that is the board’s decision today.
“Is it something we should be taking to the Building Societies Association and the Council of Mortgage Lenders about as a joint thing between all three of us? I think that has got potential – [there would be] a bit more clout, a bit more skill and a bit more size.”
Sinclair added that brokerages and distributors could offset some of the strain by adopting better technology and employing paraplanners like the IFA sector does.
He said: “Do we need more brokers, or do we need technology to simplify the process, or do we need administrators to do some of the work? I think it a combination of these things. I think the quality of the broker in front of the customer is more important than the number. I think it is about how we make these people more efficient and more effective.”
Coreco director Andrew Montlake believes technology will improve to a point where it can take on a lot of the administration tasks brokers must do today.
He said: “Ironically, in the future we might not need as many brokers; we just need technology to help brokers do their jobs quicker and more efficiently so instead of doing five, six or seven cases a month they can do 20 or 25.
“If we invest in technology then the number of brokers might not be so much of an issue.”