Brokers hit out at latest dual-pricing figures

Brokers hit out at latest dual-pricing figures


The latest figures from Home Buyer Systems, the end-to-end sourcing, sales and compliance system for brokers, has shown that consumers choosing an intermediary mortgage can pay around £5,000 more over the first two years than if they opted for a comparable direct to lender product. 

This difference is equal to borrowers paying an extra £208 a month when taking out an intermediary mortgage, the Home Buyer Sourcing Index (HBSI) revealed.


In addition, the HBSI continues to show that the choice of products available via intermediaries is very limited compared with direct to lender equivalents. For first time buyers, there are no intermediary products at 90% LTV, and the intermediary share at 85% LTV is only around 12% of the total (seven out of 60 products). Likewise, for second time buyers and remortgages, there are no intermediary products at 90% LTV, and the market shares at 85% LTV are 13% and 10% respectively.


Intermediaries have reacted in dismay at the latest dual-pricing figures, with broker Michael White, from Email Mortgages, commenting: “Many mortgage advisers have already left the market and many more will follow if the lenders continue to only offer their best products direct.


“As all advisers know sourcing the ‘most suitable’ mortgage is never just about price - there are other factors to consider which makes, in my opinion, professional advice vital for all consumers. However, by continuing with a dual-pricing policy in these circumstances lenders are in danger of creating an advice vacuum, which is having a hugely damaging effect on the intermediary sector.”  


Home Buyer’s managing director, Richard Angliss, added: “Mortgage brokers exist to find the very best deal for their clients, but overwhelmingly this deal is likely to be a direct product. Therefore, all brokers wishing to remain in business and prosper would be well advised to use their skills and experience to research the market for their clients and generate an income stream from client fees, rather than rely on the fast-disappearing option of lender proc fees.”


Backing this view, Home Buyer Systems has reported a surge in fee levels charged by intermediaries. Mr Angliss concludes: “One of our customers - a firm of 23 advisers - now has 70% of their mortgage income generated by fees – up from 0% four months ago. It’s now clear that brokers need a business model that includes whole of market sourcing and sales systems, plus an effective way to charge and collect client fees, if they want still to be trading profitably in future.”

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