The modern mortgage intermediary looks very different from 10 years ago, says Phil Whitehouse, head of The Mortgage Alliance

When looking at the industry trade press websites if I didn’t know better there are some days when it feels like I’ve been transported back in time to the mid 2000s when lenders were lending and borrowers were certainly borrowing. After years of headlines consisting of rate hikes, slashing of LTV’s, redundancies and closures we now back to getting more akin to those containing rate slashing, LTV hiking – well maybe the odd raising, appointments and acquisitions.

All in all, on most days, such sites consist of much more positive news, which is great to see. Focusing on mortgage products and this has certainly been a rollercoaster of a few months and in a departure from a usual positive market trend, the intermediary market is benefitting from far more downs that ups, in terms of headline rates. But as we all know it’s not just headlines rates that will stimulate the market, competition is, and always has been, a key component and inevitably a result of good rates is increased competition.

According to independent financial research company Defaqto some 8,968 mortgages were either brought to market or updated by providers between April 1 and the end of June this year whilst almost 600 mortgage products were removed from the market during this period.

In terms of specific mortgage products, the Defaqto data shows that:
186 brand new fixed rate mortgages were introduced, there were 4,815 changes to existing fixed rate deals and 309 fixed rate products were removed from the market by lenders
80 standard tracker rate mortgages were launched, providers had made 1,687 changes to existing products and 108 of these mortgages were pulled by providers
99 buy-to-let mortgages were brought to market, with lenders making a total of 715 changes to existing products whilst removing 66 from the market

Research conducted by Moneyfacts Group has also revealed that the number of residential mortgage products has hit a near three year high.

June’s Moneyfacts Mortgage Trends Treasury Report found that at the end of June, there were 2,665 residential mortgages, up from 2,534 – the highest number seen since 31 October 2008. And Mortgage Brain’s latest product analysis suggests that the number of mortgage products available to intermediaries increased by 4% in June, its seventh monthly rise in a row.

But, and as usual there are a series of buts. Headline rates, increased competition and sheer product numbers are still not enough. A major factor to throw into the equation is access to this funding and affordability. Well, more research from moneysupermarket.com say’s that the number of 90% LTV mortgage products currently available is 17% higher than June’s figure, with 312 90% LTV deals available, the highest level since November 2008. On the face of it again this is great news but how many of these are available through intermediaries? Unfortunately I don’t have this data to hand but whatever the actual figure is, I would still argue that it is not enough.

So we have some positive headlines, low headlines rates, gently rising LTV rates, increasing competition and strong growth in product numbers. So why are lending figures so low? The fact is that we are not back in the mid 2000s and criteria, lending appetites and attitudes to risk of those times gone by remain distant memories.

But this is certainly no bad thing. The modern mortgage intermediary is far removed from some of the order taking counterparts of ‘the good old days’ that have fallen by the wayside. If they weren’t already, they are now highly skilled sales people across a number of financial areas with a much broader skill-set and a much improved ability to innovate, evolve and grasp opportunities that arise. We see many articles regarding how the market has changed and how it compares to yesteryear but sometimes we don’t give intermediaries enough credit. The market has unfortunately shrunk but this has left us with skilled professionals who can offer a greater service to their clients through a wider range of financial solutions.

Importantly it has also meant that the range of support services, such as those provided by TMA, have also had to evolve and improve to ensure intermediaries have the necessary support to survive and now potentially prosper.

Of course we also need funding lines to increase and lending appetites to recover which, as exhibited through the aforementioned increase in competitive deals, but this mustn’t be rushed and have to be implemented in the correct manner. There is no mistaking that potential borrowers and homeowners are still suffering and whilst I mentioned last month that much of the specialist market is making some strides in the right direction, again this can’t be forced. The sad fact is that some people will still not be able to borrow and this will continue. However, when they can, which will happen hopefully sooner rather than later, at least they will be met with an army, well maybe now more of a platoon, of well informed and well supported intermediaries that will help lead them out of the depths from whence they came.