More UK consumers are searching online to find a suitable mortgage broker, according to the Intermediary Mortgage Lenders Association.
An Imla report titled “The technological new frontier: digitisation in the mortgage market” suggests that as the Financial Conduct Authority and mortgage lenders support the further digitisation of the market, consumers will gradually find it quicker, cheaper and smoother to access mortgage finance.
Imla examined Google trends and found more people are looking for a broker online while fewer consumers are searching directly for the best mortgage deal.
It found that in 2018, searches for “mortgage broker” – which now automatically highlight local mortgage brokers with a web presence at the top of any Google search – reached a 14-year high, having increased by 180 per cent over the past five years.
According to Imla, the growth in customers seeking information on mortgage brokers online has mirrored the growth of intermediary mortgage completions. It says more than 70 per cent of customers now source their loan through an intermediary when changing lenders.
Imla’s report suggests comparison websites have made limited inroads in the mortgage market, in contrast to other financial products such as car and home insurance.
It noted that comparison websites only provide customers with a list of mortgage products from different lenders based on a very limited range of criteria such as loan-to-value and borrower type. Also, there is no certainty that customers will qualify for the loans they have selected.
Imla found that while 38 per cent of brokers see the rise of robo-advice as the biggest threat to their business in the next three years, there are a number of barriers that stand in the way of firms seeking to implement a full robo-advice model.
The report noted that people’s lives frequently don’t fit into neat algorithms and that brokers often successfully challenge cases that are initially turned down by lenders for falling outside criteria.
Imla executive director Kate Davies says: “We have already seen a number of digital advancements as the industry seeks out solutions to improve the mortgage and property transaction process. But we’re still some way from seeing a completely automated mortgage market as the technology cannot yet – and may never – fully address all customer needs.
“Our findings suggest that consumers clearly appreciate the softer skills offered by brokers. And online tools have made it easier for mortgage brokers to advertise their services and to be sought out by local property buyers seeking information and advice. The digital revolution hasn’t yet disrupted the traditional mortgage journey, but it’s certainly making it more effective.
“That’s not to say that change isn’t coming. Advancements in artificial intelligence and big data capture and manipulation are allowing more of the mortgage transaction process to be digitised. I’m sure we’ll see new and exciting developments in technology and delivery – and our members are very aware of the need to keep up to speed with what the market can provide and what consumers increasingly expect, so that they can stay ahead of the curve.”