Direct mortgage lending has 'bottomed out'

Brokers are still the first port of call for borrowers as mortgage lending via intermediaries rose to 62% of all property finance in Q1 this year.

The figure - which takes in both value and volume - has risen from 60% in the final quarter of 2009, according to IMLA.

First-time buyers in particular have sought advice and help from brokers with 71% of first-time buyer loans, by volume, introduced via intermediaries in the first quarter of 2010; the highest proportion since the second quarter of 2009. By value, the figure rose from 67% in Q4 2009 to 69%.

Meanwhile, intermediaries introduced 57% of home mover loans, by both volume and value, and 64% of remortgages by value and 61% by volume.

Peter Williams, IMLA's executive chairman, says: "House purchasers and those looking for a remortgage value the service that the mortgage broker community provides and that is why they remain the first destination for many when looking for a mortgage.

"What the figures show is that the contraction in the intermediary market share, which arose when lenders were rationing supply and delivering it direct through branches, bottomed out in 2009. It underlines the fundamental importance of this channel, not just to borrowers but also to lenders as a flexible and highly effective route to market."

However, Chris Cummings, director general of the Association of Mortgage Intermediaries (AMI), says sales through intermediaries are only 62% of a much weakened mortgage market.

"What we need is greater liquidity and new funding lines. We are already making this point to the new Government on behalf of our members," says Cummings.