Under siege mortgage advisers worried about their role in the market will be cheered by findings in the Association of Mortgage Intermediaries' (AMI) 'Value of mortgage advice' report released today.
The report, compiled by NMG, estimates intermediaries could save consumers up to £1,830 per year compared with going direct to lenders. This is the average difference between the cost of a Standard Variable Rate, most frequently offered by lenders, compared to a fixed rate.
Savings achieved by intermediaries for their clients are estimated to be between £1bn and £1.2bn per annum in total.
The intermediary sector was also identified as a key port of call for people experiencing financial difficulties. During the period 1 April 2006 to 31 September 2007, 83% of borrowers who had suffered financial difficulties were assisted by mortgage intermediaries.
Among brokers, over 73% were able to place over 95% of their clients with a lender first time thereby saving time and worry for the potential borrower, the report found.
There was also positive news for advisers when it came to communication with clients. More than half (55%) of all adults who arranged their current mortgage via an adviser felt they were kept informed on the progress of the mortgage application. This dropped to only a third (34%) among those who arranged it through a bank, building society or lender.
Chris Cummings, director general of the AMI, said: "Consumers can choose to shop around themselves rather than use an intermediary. However, research shows that half of consumers who purchased a mortgage on a direct basis did so from their own bank or building society without considering any other option. A further 39% contacted no more than three lenders. This significantly reduces the likelihood of finding the most competitive mortgage for the individual's own circumstances.
"Advisers know their clients and use this insight and their knowledge of the market, to identify the most suitable and most price competitive products for the client. If the government wants to achieve its aim of more fixed rate mortgages this will be done via intermediaries."
All figures, unless otherwise stated, are from YouGov Plc and the total sample size was 3,004 adults. Fieldwork was undertaken between 20 - 25 March 2008. The figures have been weighted and are representative of all GB adults (aged 18+).
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