Intermediaries are leading the way in today's changing mortgage market

It doesn't seem so long ago that getting a mortgage meant borrowers having to save up with their local building society and being on good terms with the manager to get a product they would stick with for the rest of their days

But, thankfully, the market is now a lot more competitive which means intermediaries are more in demand than ever to lead confused clients through the maze of mortgages and general insurance.

Alongside the mainstream market is a plethora of growing niches, from self-cert to sub-prime to professional mortgages, that intermediaries are better positioned than banks to advise on because of their wider knowledge of the industry.

And despite a relative slowing down of the housing market in recent months, it's still a great time for everyone involved.

The latest figures from the Council of Mortgage Lenders¹ revealed that total mortgage borrowing in the UK will pass the £1trillion landmark this month.

Intermediaries are at the forefront of driving this growth - they account for approximately 70% of all mortgages sold in the UK² - and in helping the development of niche sectors.

For example, intermediary lenders, such as GMAC-RFC and Platform, have led the way in helping the growing number of self-employed people buy the home of their dreams with a self-cert mortgage.

Sub-prime has lost the stigma it once had with many building societies and high street banks now involved in this burgeoning sector through subsidiaries.

Figures from Alliance & Leicester highlight how mainstream the sub-prime market is becoming.

It found, on average, 22% of broker business is being carried out in the sub-prime sector.³

Another area set to boom, which intermediaries can't afford to miss out on, is equity release -both lifetime mortgages and home reversion plans.⁴

One of the big brand name providers in the market, Prudential UK, recently called for advisers to take advantage of the opportunities in the market.⁴

Jan Holt, Head of Sales for Lifetime Mortgages at Prudential, said: "This is a good time to be an adviser in the equity release market. Demand is high and people need education.if advisers fail to act soon they could be missing out on an opportunity that the big banks could take advantage of."

Equity release is set to become even more lucrative as more high street lenders enter the market - HSBC being one of the most recent examples.
The make-up of homebuyers continues to change, particularly as there are more single people and the average age of a first-time buyer has jumped to 34 and looks likely to continue upwards.⁵

Despite being older, first-time buyers need intermediaries more than ever to help them find the right mortgage and associated products.

A study by IFA Promotion revealed 71% of first-time buyers are completely unaware of the related financial products that need to be considered to accompany a mortgage.⁶

Intermediaries can help borrowers meet their protection needs. Although rising house prices have made it difficult for first-time buyers to get on the property ladder, the industry is doing what it can to help.

Most recently, Yorkshire Building Society launched a new package of financial and practical assistance. The range includes a five year fixed rate offset plus mortgage available for loans of up to 100% LTV, without a higher lending charge. This allows parents or other relatives to offset their savings.

Yorkshire's research emphasised the need for intermediaries to educate the public. Only 54% of 22 to 29 year olds are aware of 100% mortgages, 36% know about joint ownership schemes and 27% have heard of guarantor mortgages.

With so much activity there's never been a better time to be a mortgage intermediary and just think of all that mortgage payment protection insurance borrowers will need to provide a further boost to your bottom line.