Although all IMLA members believe the Bank of England's quantitative easing programme will help to stimulate new mortgage lending, two thirds of member lenders said they expect the broker market to shrink in 2009.
Lending via intermediaries has come down from its peak of 77% of all mortgage lending in Q1 2008, to 62% in Q1 2009. This is still significantly higher than AMI's prediction that lending via intermediaries will account for just 45% of the market this year.
IMLA executive director, Peter Williams, said: "This is a tough market for everyone - lenders are fighting to stay fit, and brokers will have to do the same. The mortgage market is less than half the size it was at its peak - unfortunately that means brokers have to compete hard for the reduced business there is in the market. IMLA is working to help restore lending volumes and even if the market only achieves £150 billion gross in 2009 this is still a substantial market. Brokers need to focus on attracting good quality borrowers - writing high credit quality loans will help brokers stand out from the crowd."
The survey also shows that two thirds of IMLA members believe there is a difference in the credit quality of loans sourced by appointed brokers and those sourced by directly authorised brokers. Of the lenders who saw a difference in credit quality, all said that appointed representatives produced a higher credit quality of business on a consistent basis.
Peter Williams continued, "The restricted volume of business available may look like a threat to brokers, but it can be seized as an opportunity. IMLA members accept business from the whole intermediary market, but clearly the volumes on offer won't support all brokers. Doing detailed fact finds with customers and ensuring they are matched with the most appropriate product will both satisfy TCF principles and should improve the quality of business brokers can offer lenders. Directly authorised brokers can compete with appointed representatives, but they must make every effort to deliver consistently good quality business."
