The dominance of prime and self-cert applied throughout the intermediary and direct-to-consumer sectors.
Nevertheless, the study found that non-conforming still made up around 30 per cent of the mortgage market and up to 40 per cent of intermediary business. Over 90 per cent of non-conforming business goes through intermediary lenders.
IMLA’s research compared the split of mortgage business in 2005 and 2007 and showed strong growth overall.
However, there was little movement in the size of the self-cert and non-conforming markets, while prime and buy-to-let showed substantial growth. This led to a decline in self-cert and non-conforming market activity.
Peter Williams, executive director of IMLA, said: “It’s important to realise that non-conforming lending is not all non-conforming. Buy-to-let statistically has a lower risk profile than prime lending, and indeed most self-cert is for prime borrowers who are for one reason or another unable to provide full evidence of their income and financial circumstances.
“What is clear is that the broker sector has played an important role in providing mortgages for customers with unusual requirements and circumstances, reflecting the dynamism and flexibility of the UK mortgage market.”
Melanie Bien, associate director of Savills, commented: “The problem that lenders have, and why they were moving into specialist areas, is that the margins on prime are so small. But now pricing is more realistic and we will see more lenders concentrating on prime.”
