A quarter of brokers have said their business is being adversely affected by the tumultuous sup-prime mortgage market, according to research from GE Money.
Twenty two per cent claim the uncertainty of the international market, particularly in the US, is having a negative effect on their figures, and one in seven say that the recent fragility will change the way they do business.
Of these, 71 per cent intend to practice more caution when deciding who to do business with, making an effort to avoid smaller, less experienced lenders and those that withdraw mortgage products at short notice.
Colin Shave, Chief Executive Officer of GE Money Home Lending said: “Our research shows that many brokers are clearly nervous about the potential impact recent events are having on some lenders and this is creating uncertainty.
“At this time it is crucial that experienced providers, with solid financial strength and pedigree, reassure their partners of their long term commitment to the non-conforming market, whilst ensuring that any changes to products, criteria or pricing are communicated in a timely, decisive and transparent fashion.”
Forty five per cent of brokers feel that at the present time many lenders do not have sufficient safety nets or adequately robust systems in place to ensure responsible lending. Almost half believe that a declaration of commitment to the sector is required to solidify the market and that they need to be more transparent in what they offer and do not offer.
Despite the uncertainty, 63 per cent of brokers do still have faith in the sub-prime market, and just one per cent of the total respondents said they would no longer do business with sub-prime lenders, but a quarter are nervous about the potential effects, with one in 10 feeling that the instability poses a threat to future business.
Duncan Berry, Director of Mortgages at GE Money Home Lending added: “Our research has overwhelmingly shown that brokers need clear communication and guidance from their lender partners at this time, as well as relevant tools, technology and expertise which will help them continue to refer appropriate customers to their lenders, despite the uncertainty.”
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