Tough times in the mortgage market are causing intermediaries to become increasingly reliant on networks, according to Paragon Mortgages.
A survey of over 200 financial advisers found Sesame, the UK’s largest network, was attracting advisers, while smaller networks were losing out.
When asked which network they were part of, the number of advisers belonging to Sesame increased from 24.5% in March to 27.8% in the latest survey and Sesame now has three times the number of brokers as its nearest rival, Open Work, which accounts for 10.3% of those surveyed.
The number of networks mentioned by brokers has also fallen, from 32 in March to 24 more recently, which Paragon says is an indicator of consolidation in the market.
Paragon says market conditions are making lenders less able to give discounts and special product offers, and the bulk buying power of networks gives them better bargaining power on behalf of their brokers. Additional support with regulatory compliance is also a major attraction of networks.
“There is some preference for the larger networks that have greater resources to keep on top of increasing regulation and market changes,” explains John Heron, managing director of Paragon Mortgages.
“Higher business volumes give networks better bargaining power on behalf of broker members – so larger networks are gaining members faster because they can offer better deals.”
Paragon’s survey also claims membership of smaller networks is contracting, with Network Data, Pink Home Loans and Personal Touch all seeing a fall in broker numbers.
Heron says larger networks are generally more popular because they have more resources to stay on top of regulatory issues and market changes.
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