A £1.3b digital disruption opportunity for mortgage brokers REPORT
Despite Brexit uncertainty, mortgage lending is up, with £275b in new loans in 2018, and growth forecast to continue.
Despite a downgrade in the overall growth rate as a result of Brexit uncertainty, transaction volumes are forecast to grow at a 3.1% CAGR between Q1 2019 and Q2 2024. There is approximately £1.4 trillion in outstanding mortgage debt in the UK.
The mortgage brokerage industry generated £1.31b in fees and commissions, up 13% from the previous year.
The proportion of mortgage sales where an intermediary was involved grew to 72% in 2018, an increase from about half that, since 2010. This continues alongside growing volumes.
But technology is causing disruption to traditional brokerage business models.
Data from the FCA shows there are 5,210 directly authorised mortgage intermediary firms in the UK (in addition to 14,169 firms with Appointed Representative status). This is still considerably less than the 30,000 brokers operating in the space before 2007.
"Robo-brokers’ are capturing the prime market and using automation.
Several large ‘robo-brokers’ have emerged over the last 5 years and increasingly serve the “easy’ customers through mostly low-contact, highly automated processes:
There are £1.3b in fees available to firms in 4 key categories:
ABOUT THE SUMMERHILL GROUP:
We can help you identify and capture new strategic opportunities, including adjusting your business model as a result of digital disruption.
Our strategy consulting team helps startups and corporate innovators prepare for investment, accelerate growth, expand into new markets and build new businesses in the UK.
We have worked with several major mortgage brokerage businesses, including both robo-advisors and traditional firms.
Give us a call on 0203 355 2060 to learn more, or email firstname.lastname@example.org