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Lenders start rush to sign up brokers

Lenders are increasing their efforts to tie or buy distribution, says Cartel managing director Carl Wright.

He warns that this move could see fewer brokers who are truly independent in the mortgage market.

Lenders have been assessing their relationships with brokers since mortgage regulation and are approaching brokers offering deals. Wright believes this will start a flood of new relationship deals in the coming months.

Wright believes intermediaries are waiting for suitable partners to approach them. He predicts supply will dwindle quickly as lenders rush to sign up their share of the mortgage distribution market.

He also predicts that as lenders tie in distribution into their models to retain distribution, panels will be reduced.

Wright says: “The number of lenders approaching intermediaries suggesting partial equity partnership and total acquisition will make it difficult for many to resist. The key will be the price and suitability of the lender making the proposal. Most of this activity is going unreported but it will become the norm.”

Mortgageforce managing director Rob Clifford says: “If you look at the insurance market, wholesalers buying into retailers does not always work. Some people have had their fingers burned but it does not necessarily undermine broker independence. Charcol was owned by Bradford & Bingley but ran a very credible business.”

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