UK Mortgage Intermediary Distribution 2008

Content

• Overview
• Catalyst
• Summary
• Executive Summary
  • The Mortgage Intermediary Market Consists Of A Number Of Different Players
  • The Distribution Structure In The Mortgage Market Is Quite Complex
  • Mortgage Intermediaries Will Remain An Important Part Of The Market
  • A Greater Proportion Of Intermediaries Estimated That New Mortgage Lending Would Decrease In 2009
  • Mortgage Intermediary Distribution In Niche Mortgage Sectors Has Been Hit Hard By The Credit Crunch
  • With Lending Scarce, Intermediaries Are Having To Turn Down A Lot Of Customers
  • Mortgage Intermediaries Need To Look For Other Ways To Raise Revenue
  • Intermediaries Are Turning To Cross-Selling, Commission And Diversification Opportunities To Grow Income
  • Regulation Is Likely To Increase As The Fsa Continues To Carry Out Thematic Reviews Of The Market
  • The Retail Distribution Review Could Lead To Changes In Mortgage Distribution
  • Market Context
  • The Mortgage Intermediary Market Consists Of A Number Of Different Players
  • The Distribution Structure In The Mortgage Market Is Quite Complex
  • Mortgage Intermediaries Have Two Types Of Status For Advising And Selling On Mortgages
  • There Is Some Debate As To Whether Intermediaries Are Moving Away From Das Towards Ars
  • A Large Percentage Of Intermediaries Have A Customer Base Of Less Than
  • The Majority Of Intermediaries Arranged Less Than 100 Mortgages In The Last Year
  • Networks Are Considered To Have Been Least Affected By The Credit Crunch
  • The Credit Crunch Has Seen Networks Redefining Their Role In The Market
  • The Market Has Seen Some Recent Consolidation Among Networks
  • Some Mortgage Networks Are Outperforming Others With Regard To The Number Of Ars They Hold
  • Mortgage Clubs Are Likely To Fare Similarly To Networks As The Market Continues To Struggle
  • Packagers Are Considered To Be In The Most Trouble As A Result Of The Credit Crunch
  • The Future Remains Uncertain For Packagers
  • Those Packagers Which Consolidate And Survive Will Be In A Strong Position When The Market Recovers
  • The Professional Mortgage Packagers Alliance Closed To Allow Members To Focus On Their Businesses
  • The Majority Of Gross Lending Comes From The Intermediary Channel But Its Share Has Decreased
  • The Intermediary Share Of Gross Lending Has Fallen In 2008
  • Market Conditions And Lender Strategies Have Reduced Intermediaries' Market Shares
  • The Majority Of Intermediaries Feel That Lenders Are Focusing More On Direct Distribution
  • Dual Pricing Is A Key Weapon Being Used By Lenders To Increase Their Share Of Direct Distribution
  • Most Niche Mortgage Sectors Have Declined Or Disappeared Entirely
  • Mortgage Intermediaries Will Remain An Important Part Of The Market
  • A Greater Proportion Of Intermediaries Estimated That New Mortgage Lending Would Decrease In 2009
  • The Mortgage Intermediary Channel Is Likely To Recover Its Share Over The Next Few Years
  • Mortgage Intermediaries Will Be Hit By The Slow Improvement In The Main Niche Markets
  • Lenders And Brokers Have Looked To Improve Their Service Through Technological Improvements
  • Pink's 'Remittance Manager' Has Been Designed To Simplify The Transfer Of Commissions To Brokers
  • Networks Are Using Crm Platforms Such As The Key To Facilitate The Management Of Their Business
  • The Impact Of The Credit Crunch On The Intermediary Channel
  • Mortgage Intermediary Distribution In Niche Mortgage Sectors Has Been Hit Hard By The Credit Crunch
  • The Liquidity Squeeze Has Led To Significantly Low Levels Of Lending In The Uk Mortgage Market
  • With Lending Scarce, Intermediaries Are Having To Turn Down A Lot Of Customers
  • Customers With Little Deposit, Credit-Impaired And First-Time Buyers Are The Most Affected
  • Intermediary Lending Volumes In Various Niche Mortgage Sectors Have Declined Significantly
  • High Loan-To-Values, Sub-Prime And Self-Certification Lending Are Among The Most Affected
  • Sub-Prime, High Ltvs And Self-Cert Are Expected To Remain Weak In The Short Term
  • Intermediaries Are Most Concerned By Lenders Looking To Pull Away From Direct Distribution
  • Mortgage Intermediaries Are Disquieted By A Number Of Factors
  • Mortgage Lenders Pulling Away From Broker Distribution Presents A Big Concern For Intermediaries
  • The Housing Market Is Already Experiencing A House Price Crash
  • A Limited Supply Of Credit Is Making Life Difficult For Intermediaries
  • Falling Income And Commission Levels Are Also A Worry For Intermediaries
  • Lenders Pulling Away From Non-Conforming Sectors Is Also A Concern Among Mortgage Intermediaries
  • Intermediaries Are Concerned About Greater Fsa Involvement
  • Mortgage Intermediaries Need To Look For Other Ways To Raise Revenue
  • Intermediaries Are Turning To Cross-Selling, Commission And Diversification Opportunities To Grow Income
  • Intermediaries Are Looking To Identify New Opportunities With Existing Clients
  • Regulation In Life Assurance And Pensions Makes It Difficult For Mortgage Brokers To Diversify Into These Markets
  • Cutting Down Operational Costs Is Another Key Measure For Beating The Downturn
  • Some Intermediaries Are Taking Steps To Adopt New Business Models
  • Ifas See Mortgages As Being The Worst Affected By The Financial Slowdown
  • Regulation Is Likely To Increase As The Fsa Continues To Carry Out Thematic Reviews Of The Market
  • The Retail Distribution Review Could Lead To Changes In Mortgage Distribution
  • Lenders Attempt To Ensure Intermediaries Comply With The Fsa's Tcf Scheme
  • Mortgage Fraud Could Have A Major Impact On The Market
  • The Oft's Irresponsible Lending Study Is Set To Lead To Further Regulatory Pressures In The Market
  • The Extension Of The 'First Day Marketing' And 'Drop Dead' Dates Will Impact On Estate Agents
• Appendix
  • Supplementary Data
  • Market Context Chapter
  • The Impact Of The Credit Crunch On The Intermediary Channel Chapter
  • Definitions
  • Appointed Representative
  • Buy-To-Let Mortgage
  • Directly Authorized
  • Fixed Rate Mortgage
  • Mortgage Club
  • Mortgage Intermediary
  • Mortgage Network
  • Non-Standard
  • Sub-Prime
  • Packager
  • Self-Certification Mortgage
  • Methodology
  • Further Reading
  • Ask The Analyst
  • Datamonitor Consulting
  • Disclaimer
• List Of Tables
  • Table 1: The Number Of Mortgages Arranged Over The Last 12 Months
  • Table 2: Ars As A Percentage Of The Total Number Of Intermediaries
  • Table 3: Approximate Customer Base Size
  • Table 4: Level Of Concern Regarding Different Features Of Their Business: Networks
  • Table 5: Number Of Appointed Representatives For Large Networks
  • Table 6: Intermediaries Affected By The Credit Crunch
  • Table 7: Strength Of Intermediary Business Models Over The Next Two Years
  • Table 8: Mortgage Intermediary Share Of Gross Advances
  • Table 9: Whether Intermediaries Are Losing Market Share To Direct Distribution
  • Table 10: Focus Of Mainstream Lenders' Distribution Strategies
  • Table 11: How Mortgage Lending Is Likely To Evolve In 2009
  • Table 12: Forecast For Intermediary Share Of Gross Advances, 2007-2012f
  • Table 13: Datamonitor Neutral Forecasts For The Buy-To-Let And Sub-Prime Markets, 2007-2012f
  • Table 14: Proportion Of Customers Turned Down Due To Difficulty Of Finding Credit
  • Table 15: Customer Groups For Which Intermediaries Find It Most Difficult To Find Credit
  • Table 16: The Fall In New Lending In The Different Mortgage Markets
  • Table 17: The Strength Of The Short-Term Future In A Variety Of Mortgage Sectors
  • Table 18: Areas Of Most Concern To Intermediaries
  • Table 19: End Of Year Historic House Prices And Future Forecast
  • Table 20: Performance Of Average Commission Levels Over Last 15 Months
  • Table 21: Level Of Concern Regarding Different Features Of Their Business: Networks
  • Table 22: Average Commission Levels, Presently And 15 Months Ago
  • Table 23: Measures Introduced To Compensate For The Drop In Mortgage Lending
  • Table 24: Products Currently Offered By Intermediaries To Their Customers, 2007 And 2008
  • Table 25: Penetration Of Mppi Policies, 2003-07 (%)
  • Table 26: Effect Of The Economic Downturn On Different Facets Of Ifa Business
• List Of Figures
  • Figure 1: A Conceptual Illustration Of Distribution In The Uk Mortgage Market, 2008
  • Figure 2: More Than 40% Of Intermediaries Expect Their Overall Share Of Distribution To Decline In 2009
  • Figure 3: 39% Of Intermediaries Reported They Are Turning Down Between 10% And 30% Of Customers On A Monthly Basis, November 2008
  • Figure 4: Mortgage Intermediaries Are Looking At Cross-Selling And Commissions To Increase Income
  • Figure 5: A Conceptual Illustration Of Distribution In The Uk Mortgage Market, 2008
  • Figure 6: The Percentage Of Ars As A Total Of All Intermediaries Has Grown By 10 Percentage Points Since December 2006
  • Figure 7: Less Than 15% Of Intermediaries Have A Customer Base Greater Than 1,000
  • Figure 8: Networks See Commission/Fee Levels As The Biggest Concern
  • Figure 9: Mortgage Times Group Remains The Largest Mortgage Network In Terms Of Ars
  • Figure 10: Packagers Are Seen As Most Likely To Be Affected By The Credit Crunch
  • Figure 11: Ifas Are Judged As Being The Most Secure Over The Next Couple Of Years
  • Figure 12: The Intermediary Share Of Mortgage Distribution Decreased By 3% Between 2007 And 2008
  • Figure 13: Mortgage Intermediaries Feel That They Are Losing Market Share To Direct New Mortgage Lending
  • Figure 14: The Majority Of Intermediaries Feel That Lenders Are Currently Focusing More On Direct Distribution
  • Figure 15: The Majority Of Lenders Are Using Dual Pricing To Increase Direct Distribution Of Mortgages
  • Figure 16: More Than 40% Of Intermediaries Expect Their Overall Share Of Distribution To Decline In 2009
  • Figure 17: The Mortgage Intermediary Channel's Share Of Gross Advances Will Grow To 67% By 2012
  • Figure 18: Datamonitor's View Is That Both Of The Main Niche Markets Will Be Severely Hit By The Downturn
  • Figure 19: New Mortgage Lending Has Contracted Dramatically In 2008
  • Figure 20: 39% Of Intermediaries Reported They Are Turning Down Between 10% And 30% Of Customers On A Monthly Basis, November 2008
  • Figure 21: 27% Of The Intermediaries Surveyed Find It More Difficult To Find Credit For Customers With Little Deposit
  • Figure 22: 51% Of The Intermediaries Surveyed Reported A Fall Of More Than 70% In High Loan-To-Value Lending, November 2008
  • Figure 23: The Immediate Future For Sub-Prime And High Ltv Mortgages Is Seen As Particularly Weak
  • Figure 24: Intermediaries Are Most Concerned About Lenders Moving Away From Broker Distribution
  • Figure 25: House Prices Grew Strongly From 2000 Before Falling Away Sharply In 2008
  • Figure 26: Almost Three-Quarters Of Respondents Saw A Fall In Average Commission Levels
  • Figure 27: Commission/Fee Levels Are The Greatest Concern For Intermediaries' Business
  • Figure 28: The Number Of Intermediaries With An Average Commission Level Greater Than 0.5% Has Fallen
  • Figure 29: Mortgage Intermediaries Are Looking At Cross-Selling And Commissions To Increase Income
  • Figure 30: Mortgage Intermediaries Have Increased Their Offering Of Loan And Insurance Products
  • Figure 31: Negative Publicity Has Led To A Decrease In Mppi Penetration Rates
  • Figure 32: Mortgages Are The Area Of Ifa Business Most Affected By The Current Difficult Economic Conditions