Direct Life & Pensions sales and marketing director Richard Verdin believes the slowdown in the mortgage market will boost protection business.
Bank of England show a 20 per cent year-on-year drop in lending in September, suggesting that five base rate rises and uncertainty about the credit crunch are cutting demand for mortgages.
Verdin says brokers have recognised that the slowing mortgage market will reduce their income and many have turned their focus to protection to maintain revenue streams.
He says: “Advisers now have more time to spend with their clients to look after their protection as well as their mortgage needs. Focusing on protection is one of a range of tools mortgage advisers have to maintain their position in the market and their revenue. The little guy has reacted pretty quickly while bigger businesses have identified the issue and are working out ways of using protection to recover revenue.”
The Council of Mortgage Lenders believes the mortgage market will continue to soften in the next six to nine months. It predicts gross lending to be to around £340bn next year from £360bn this year and net lending to fall to around £90bn from £105bn.