Lenders are now requiring all potential borrowers to meet much stricter requirements in respect of their levels of equity and rates are more closely linked to the perceived risk associated with the lending.
There are significantly fewer products from which to choose and many lenders have withdrawn from the market altogether.
In some cases, these lenders had been taking significant market share, particularly those cases which would not be classified as being prime.
This change in the scene is of particular importance to brokers. The total number of mortgages outstanding has not significantly reduced but the numbers of lenders has shown a big fall and there is likely to be less need for the lenders to be over-competitive to attract the numbers of mortgages they are seeking.
Additionally, many of the lenders who have withdrawn from the market are those who did not maintain a physical high-street presence and who accessed the market through the intermediary channels.
The backbone of the market will be formed by more trad-itional firms which have a high-street presence of their own, having an in-house capability to deliver their services direct to customers.
Brokers have the supreme advantage of the relationship they have with their customers but that will count for nothing if they are not able to readily match their clients’ needs to willing lenders.
Brokers must ensure that their own relationships with lenders are in good order and that the lenders value the service they are providing to their clients and the quality of the applications that the broker is able to provide.
For many lenders, an intermediary channel is able to offer them access to market sectors that are not readily available to them through their branch networks. Regionally-based societies may welcome access to remote geographical areas or to a different type of property.
All lenders will be trying to balance their loan books in order to minimise their risks. Brokers can provide them with a vehicle for achieving this.
In the same way, as different lenders will have different problems to address, so the way forward for different brokers will vary, depending on their own location and the nature of their clients.
Adjusting to these new situations will be difficult for everyone, including the clients who still need to find affordable solutions to their housing finance.
Richard Fox is chief executive of the Society of Mortgage Professionals