Mortgage broker market share could drop to 50% over the next decade

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At a recent roundtable titled ‘The Mortgage Market in 2030’ hosted by financial services communications consultancy MRM, key industry figures predicted that brokers would struggle to maintain their current share of 77% of the market.

The group agreed that lenders would use big data and machine learning to make it more attractive for borrowers to go directly to a lender rather than a broker, likely through tailor-made pricing and nifty processes.

The prediction follows an update this month from the Financial Conduct Authority (FCA) in which it effectively made it easier to get a mortgage without taking advice first, which is seen as a blow to the broker market.

Speaking at the MRM roundtable, Dev Malle, director of group distribution for carrier myhomemove, said, “I would say, potentially, that 50% of the market over the next 10 years will be either run-only or one-off. hybrid version of it.

“The critical point here is the data. Brokers are nothing like data lenders. Will lenders outsource risk decisions to a third party when they have access to this data?

Lynda Blackwell, former FCA mortgage manager and now non-executive director of digital lender Molo Finance, said: “The broker market will be much smaller going forward. I think disintermediation is really starting to happen and intermediaries are definitely going to be impacted.

“The big lenders are going to digitize and move away from brokers because this is such an expensive distribution channel.”

However, the group agreed that even by 2030 there will still be a large part of society that will still want independent face-to-face advice, although there are far fewer of them.

Andrew Montlake, Managing Director of broker Coreco, said: “Brokers will not have 75% market share [in 2030] but they will still have a very good future. It is about adapting to consumer demand; react to the way they want to be treated; embrace technology rather than be afraid of it; and take better care of their customers.

“There will be fewer brokers in the market, but if those who are left can do all of this, then they will have good relationships with their clients and prosper. “

David Whittaker, managing director of rental lender Keystone Property Finance, said he believes many lenders should also fear for their futures in the age of big data and rapid technology development.

He said: “Just as brokers must fear for their future, so too have the historic High Street lenders, whose hold on technology is fleeting at best and have shown no willingness to attack. to today’s problems.

“They need to be more afraid of what’s going to happen to them, rather than the brokers need to be afraid for their future.”



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