IFG Mortgage Broker Solutions tops €1.5b turnover
Date: 16-01-2006
Source: IFG GROUP PLC
IFG-Mortgage Broker Solutions tops €1.5b as mortgage brokers signup with network to solve regulatory and lender pressures
Over 20% of full-time mortgage brokers have signed up to IFG-Mortgage Broker Solution’s packaging network. The company estimates that 60% will have joined a mortgage network by 2010.
IFG-Mortgage Broker Solutions have announced market leading growth in mortgage lending for the 5th year running. With this record business growth, IFG is now the dominant force in the independent mortgage market.
- Overall mortgages drawn down grew to over €1.5bn representing an increase of 29.3% on 2004, well ahead of the market average. This performance was on the back of substantial growth in each of the previous 5 years.
- In this period, the company’s share of the independent market grew to over 27%.
- The number of independent mortgage brokers joining this unique support network continues to grow. IFG-Mortgage Broker Solutions now represents over 20% of the independent mortgage market and this trend is likely to grow significantly over the next 2-3 years.
Small to medium sized mortgage brokers are struggling to offer their client comprehensive independent advice as lenders continue to apply minimum volume targets.
Many brokers are effectively reduced to 3-4 agencies (out of a possible 12) severely restricting the choices they can offer potential mortgage customers.
Prior to the creation of MBS’s network, these and other scale factors would previously have squeezed out the smaller mortgage brokers or indirectly forced them to become tied agents to one or two lenders.
Commenting on this development and on the growth of networks like MBS in the wholesale mortgage market, Trevor Grant MD, Property Division, IFG Ireland said, “While increased compliance regulation is to be welcomed as it both protects and increases consumer confidence, it also adds significantly to the administration overhead of the small to medium operator. This along with being able to offer customers more lenders and greater flexibilities has resulted in many more brokers joining the MBS network, which is a positive step for consumers and brokers alike. Brokers feel comfortable with our network as we do not sell direct to the consumer and therefore do not compete directly our broker partners. ”
Market Trends
Residential
- The proportion of regular home purchases has dropped to below 50% of all mortgage business, as the re-mortgage sector continues to grow rapidly. Within this group, there has been a significant change in trends over 2004, with over 96% (up from 90%) of the retail mortgage applicants choosing new homes over second-hand ones.
- Average mortgage size for this group has grown by 6% reflecting increases in disposable income and a greater flexibility in lending practice.
Re-mortgage
- Overall, IFG-Mortgage Broker Solutions estimate that the market has grown by over 50%.
- Applications continue to grow dramatically in size with an average level of almost €197,000 (up 19% from €169,000 in 2004) reflecting the increasing costs of trading up or building on an extension.
- A greater percentage of consumers are choosing to wrap all of the debts under a mortgage availing of interest rates of 3.5%, often selecting dual repayments terms.
Commenting on these market trends, Trevor Grant, MD, Property Division, IFG Ireland said,
“Consumers expect and should receive total choice and genuine transparent independent advice. There has been a significant shift towards full-service independent mortgage brokers. Consumers appear to be heeding commentators’ advice to seek independent advice before making a major financial commitment – This is equally applicable to mortgage services as it is with legal and other services.”
Predictions for 2006
- 2006 is likely to be another bumper year for the industry with;
- Re-mortgaging expected to grow by a further 40%+ as consumers attempt to reduce their outlay and more lenders offer switcher options.
- Greater product innovation as new lenders enter the mortgage market.
MBS estimate that almost 50% of mortgage applicants will choose to deal with a mortgage broker (rather than directly with a bank or building society), showing a real trend towards comprehensive advice, enabling customers to get a better deal in the long run.
Within the IFG-Mortgage Broker Solutions Mortgages network which accounts for approximately 27% of the broker market, all mortgage agents are paid the same commission regardless of which product or lender they recommend. Each IFG network agent has complete freedom to place the mortgage wherever is best for the client. All brokers within the IFG network have access to the maximum number of home loan providers in the broker market.
The combination of the Title insurance company, First American, and the IFG branded network and its wholesale packaging mortgage arm MBS; make IFG Ireland the largest independent authority in the mortgage market.
Registered in the Republic of Ireland No. 21010
Registered Office: IFG House, Booterstown Hall, Booterstown, Co. Dublin
Tel: + 353 (0)1 2752800 | Fax: + 353 (0)1 2752801
Email: group@ifg.ie