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Direct-only mortgage deals rise to over 50% of market

Direct only mortgages increased from 22 per cent of available mortgage products in 2007 to over 50 per cent in 2010, according to independent financial research company Defaqto.

Defaqto recently launched a new banking report, which highlights the growth in direct-only mortgage products. It says that the growth in direct-only products places mortgage brokers at a disadvantage.

Insight analyst for banking Kevin Bray says: “Our research shows that 12 of the top 20 best buy fixed rate mortgage products are only available directly from the provider.

“The steady growth in direct only products over the last two years has clearly placed mortgage brokers at a disadvantage but it also leaves consumers with a difficult choice to make. Do they seek the advice of a mortgage intermediary or do they do their own research and approach the provider directly?”

Bray adds: “Mortgage intermediaries play an important role in helping buyers through the house buying process but consumers need to ensure that the broker they are using will advise them of the best deals in the market including direct only products.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. With the broker community having a bashing from the FSA and permissions being removed, what can you expect. Unfortunatley like all professions the few spoil it for the rest and until we all start acting professionally things will not improve.

  2. The consumers only decision should be to use a whole of market adviser because such advisers must surely be examining direct only products as well – and recommending them if they are found to be the most suitable.
    Brokers need to adapt to this changed reality by charging a fee to cover their costs. If a procuration fee materialises, then the broker can use this to reduce or eliminate the client fee. If client ends up being sent to a direct only lender, then they will know they have to pay the fee for the brokers work (which will be less because they won’t be involved in the placement process) out of their own pockets.
    Where’s the problem?

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