Broker market share hits record high at 59.1%

January 21st, 2019

 

The MFAA Survey for the September 2018 quarter has revealed that mortgage brokers settled $50.1 billion of new residential home loans during the period. That’s equivalent to 59.1% of all new residential home loans written.

This is the highest broker market share ever recorded by the MFAA. It represents a 3.4% increase year-on-year, and an increase of 5.5% over the same period in 2016.

This is an amazing result for the broker channel, considering the overall number of residential loans written during the September quarter was down by more than 3% compared to the same time last year. It’s a great indicator of the resilience of the broker channel and that new lending for brokers has not fallen by as much as the rest of the market.

According to Connective Director and Combined Industry Forum Deputy Chair, Mark Haron “The growth in market share is not surprising, given the tightening of lending criteria by many banks, especially the major banks” he says. “More customers are turning to brokers for their ability to provide value, service and choice, given increasingly complex lending requirements.”

The figures reveal that personalised service and expert credit advice are highly valued by home loan customers in a market that’s becoming increasingly complex. “The increase in the use of broker services by home loan customers shows that the benefits of using a broker are not limited to getting access to better interest rates” says Haron. “Customers need access to a broader range of lenders and lending policies and appreciate having the benefit of someone to explain them. Someone who has their interests at heart” he added.

Mark Felton, CEO of the MFAA, supports Haron’s view. “In addition to providing customers access to a panel of 34 lenders on average, mortgage brokers are ideally positioned to help customers – especially those with more complex lending scenarios – to understand the ever-evolving application process and provide the information necessary to meet changing lender requirements” he says.

It’s also interesting to note the survey revealed non-bank lenders and white-label home loan products accounted for 20.5% of all residential home loans written during the 2018 September quarter. This is another indicator that brokers are positively influencing the way the home loan market operates, facilitating wider product choice and value for consumers across the board.

“Mortgage brokers continue to offer choice to consumers” says Mark Felton, “and they ensure credit continues to flow – which is of systemic importance to the housing market and a strong economy” he added. “This result has occurred during a period of severe credit tightening, with brokers stepping in to provide critical assistance in the redistribution of credit demand for those seeking a home loan.”

Connective has launched a campaign supporting the value, service and choice that mortgage brokers provide, following the commentary about mortgage broking practices surrounding the Royal Commission into Misconduct in the Banking and Finance Industry last year – #CHOICEMATTERS.

“Our objective with this campaign is to unite the community and the industry in support of brokers” says Haron. “We’ve collected more than 2,000 pledges already.”

To find out more about #CHOICEMATTERS, or to pledge your support, simply visit the #CHOICEMATTERS website.