IMLA’s report assesses how the mortgage market recovery has been tempered in the past year by worsened housing affordability and tighter lending restrictions since last April’s implementation of the Mortgage Market Review and October’s macro-prudential changes prompted by the Financial Policy Committee.
IMLA’s analysis shows the end of non-advised sales has led lenders to source more business from brokers and between Q1 2014 – immediately before MMR implementation – and Q4 2014 the number of consumers using intermediaries rose by 20% while those going direct to lenders fell 6%.
Specialist lenders and building societies are also enjoying a growing share of gross mortgage lending at the expense of banks. Ongoing demand from ‘niche’ borrowers is providing these types of lenders with opportunities to grow, partly because the self-employed and other non-standard customers in the post-MMR world fit less well into the automated loan underwriting systems favoured by some larger lenders.
Peter Williams, executive director for IMLA, said: “The introduction of the MMR and first use of macro-prudential tools cannot be held entirely responsible for the [market] slowdown over the last year, but we may be getting the first taste of how the new regulatory regime can engineer a more subdued market – even with the policy prop of ultra-low interest rates.
“Access to advice and products from a broad spectrum of lenders are increasingly vital to borrowers in today’s mortgage market. With more prime borrowers falling into ‘non-standard’ categories, choice is vital so as not to frustrate legitimate applications for mortgage credit.”
