Lenders expect broker numbers to shrink further in 2009

The number of brokers operating in the intermediary mortgage market has further to shrink, according to the latest member survey from the Intermediary Mortgage Lenders Association (IMLA).

Although all IMLA members believe the Bank of England's quantitative easing programme will help to stimulate new mortgage lending, two thirds of member lenders said they expected the broker market to shrink in 2009.

The body said lending via intermediaries had come down from its peak of 77% of all mortgage lending in Q1 2008, to 62% in Q1 2009. This is still significantly higher than the Association of Mortgage Intermediaries' (AMI) prediction that lending via intermediaries would account for just 45% of the market this year.

Peter Williams, executive director of IMLA, noted the mortgage market was less than half the size it was at its peak, meaning brokers had to compete hard for remaining business.

He explains: "IMLA is working to help restore lending volumes and even if the market only achieves £150bn gross in 2009 this is still a substantial market. Brokers need to focus on attracting good quality borrowers - writing high credit quality loans will help brokers stand out from the crowd."

The survey also showed two thirds of IMLA members believed there was a difference in the credit quality of loans sourced by appointed brokers and those sourced by directly authorised brokers. Of the lenders who saw a difference in credit quality, all said that appointed representatives produced a higher credit quality of business on a consistent basis.

IFAonline