A further 20 per cent of brokers will opt for their number two lender – highlighting how important it is for lenders to achieve either top or second lender status.
As a result, mortgage lenders will have to decide whether to maximise the number of brokers they work with or focus on securing the majority of their business via a small base of supporting intermediaries.
Significantly, commercial mortgage intermediaries have used a limited range of lenders over the past year. On average, intermediaries have placed business with just five lenders over the course of the year – much lower than residential mortgage introducers who typically used 11 lenders each quarter.
Specialist commercial intermediaries, for whom over 50 per cent of business income is derived from commercial mortgages, use an average of seven lenders. Non-specialist intermediaries use an average of four lenders
Commercial market ‘will grow’
The research also found that most brokers plan to increase their commercial mortgage business over the coming twelve months. This anticipated growth is indicative of widespread optimism amongst intermediaries, despite rate increases.
Three quarters expected to do more of this type of business in 2008, with only 2 per cent saying they would do less.
Mark Dennis, director of Charterhouse Research, said: “The UK commercial mortgage market has repeatedly been highlighted as an area of potential growth for intermediaries in recent years and the results from our in-depth research support this. There are real opportunities for lenders and intermediaries over the next 12 months.”
In addition, demand for online servicing in the commercial market is increasing. Almost a quarter (24%) of commercial mortgage intermediaries are currently using multi-functional online platforms compared to 100% of residential mortgage intermediaries.[3][3] Commercial mortgages are sometimes seen as too complex for the online process, but there is demand for better online functionality to support the commercial mortgage application. 40% of mortgage intermediaries consider the availability of online servicing when deciding which lenders to approach on a case.
Dennis added: “As the intermediary channel becomes ever more important, lenders need to consider how they service intermediaries. A good, trust-based relationship is fundamental to determining which lender achieves critical ‘top lender’ status. In a market where cases are often complex, a key contact to liaise with and regular proactive communication with intermediaries is of paramount importance.”
