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Market pick-up prompting lenders to work with more brokers

The mortgage market’s resurgence has prompted 50 per cent of intermediary lenders to increase the number of brokers they work with during 2013, according to research by the Intermediary Mortgage Lenders Association.

Over 300 intermediaries from around the UK as well as IMLA members were surveyed. The research found that 29 per cent of intermediary lenders reported an improvement of introduced business in the first six months of the year, while a further 65 per cent said business quality has remained stable.

More than a third of brokers – 34 per cent – have seen successful applications grow in the first six months of the year, while 69 per cent identified an improvement in product availability.

Not fitting a lender’s profile is the biggest challenge for mortgage applicants, at 67 per cent, with 52 per cent pointing to financial difficulties such as county court judgements, arrears or bankruptcy. This was followed by limited deposits, at 41 per cent, and existing debt, at 36 per cent.

However, mortgage availability has improved in the first six months of the year.

In the last quarter of 2012, 63 per cent of brokers were unable to source a mortgage for a mainstream borrower, while 67 per cent had the same problem for a near-prime borrower. These figures had fallen to 37 per cent and 46 per cent, respectively, in the second quarter of 2013.

Brokers and intermediary lenders have revised their predictions for total gross lending in 2013, off the back of a pick-up in market activity in the first six months of the year.

In January, brokers predicted gross lending in 2013 to hit £139bn. The brokers surveyed have increased this to £155bn as of July.

Lenders, on average, predicted a market of £150bn gross lending in 2013 in January. They have increased this to £157bn.

Around 85 per cent of brokers feel the market is currently improving, compared with 37 per cent in January. One in five reported a “significant” improvement in the market, compared with 2 per cent in January.

IMLA’s research found lenders are optimistic brokers will take around 59 per cent of mortgage business in 2013. In 2012 intermediaries tool 55 per cent of all first-time buyer business, 44 per cent of home mover loans and 45 per cent of remortgage loans.

IMLA executive director Peter Williams says: “Both lenders and brokers have high hopes that business will continue to grow for the remainder of the year. A key challenge will be to manage that growth while also preparing to implement the Mortgage Market Review from April 2014. Any upsurge of activity when the Help to Buy mortgage guarantee arrives in January 2014 will put even more emphasis on broker-lender relationships, so close cooperation will be essential to make these endeavours a success.

The quality of advice and service are absolutely essential to the consumer experience and IMLA is working hard to uphold good practice among brokers.”

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