Almost 60% of respondents said that their business grew a lot and less than 8% reported a decline in business volumes.
Based on the data provided by the 54 respondents to the independent survey, the average volume of mortgages packaged in the year was £216 million. The research covered both large and small packagers. 41% of them packaged over £200 million, while 13% packaged over £500 million. A minority of just 9% packaged less than £50 million.
Godfrey Blight, director of IMLA, said: “Packagers clearly think their sector is in good shape, with the largest proportion of respondents – almost 60% – reporting that business increased a lot between 2005 and 2006. A further 22% said it grew to a lesser extent.”
The typical packager employs 12 people. 7% of respondents were small firms of less than five people, and 24% employ between five and ten. At the other end of the scale, 28% have between 21 and 50 staff, and 13% have between 51 and 100. No firm employed over 100 people.
Blight said: “Most firms remain fairly small in scale, and as such are able to provide the targeted, personal service that intermediaries are looking for to help them arrange their more difficult cases.”
According to respondents, the most important benefits for intermediaries of dealing with a packager are the support they provide for difficult cases and their knowledge of product lenders. Both were mentioned by nine out of ten respondents, while personal service was mentioned by eight out of ten. Other key benefits were having an underwriter on site and the access to several lenders under one roof, given by more than seven out of ten respondents to the survey. Packagers’ views of how they add value to intermediaries matched closely those of intermediaries in IMLA’s recent survey of brokers, with support for difficult cases mentioned by eight of of ten respondents, and access to several lenders and knowledge of product lenders mentioned by six out of ten.
Packaging firms do tend to package for a wide range of different lenders, with the average packager working with over 20 lenders. Almost 43% package for over twenty lenders.
Most of packagers’ activity is business-to-business, although a small portion (11%) is business-to-customer.
Non-conforming mortgage business makes up the majority of packagers’ volume and mainstream accounts for just 9%. Sub-prime represents 37% and self-certification 27%. Buy-to-let also accounts for a significant proportion of business, at 22%.
Blight concluded: “Several things emerge from this new research. Packagers are successfully growing their businesses by providing a valuable function to intermediaries, helping them to place their difficult, mostly non-conforming, cases with a wide range of lenders. Both packagers and intermediaries agree that personal service and expertise are key to the relationships between the two parties.”
“Packagers are clearly doing many things right and fill an important role in the mix of the UK mortgage industry.”
