Survey finds only a quarter of mortgages sold through bank branches

Financial services technology solutions provider, Avelo’s inaugural Mortgage Efficiency Survey, has found that despite the investment lenders make in branch networks, only one quarter (27%) of mortgages for banks.

Related topics:  Mortgages
Amy Loddington
2nd November 2012
Mortgages
Mutuals sell even less in branch, with less than one fifth (15%) currently sold through their branch networks.

Of the 70% of the mortgage market surveyed a clear difference emerged between how mutuals and banks originated their mortgage sales. Mutuals were found to lean more heavily (75%) on  the intermediary market, with almost twice as many sales being originated in this way compared to banks (35%).

On average one fifth (18%) of offers were produced within five days, with banks higher at nearly one third (30%) and mutuals lower at just over one in 10 (12%). Looking at offers made within 14 days, the average was just over 73%, this time mutuals achieving a one percentage higher average rate than banks. Offers made within 30 days had an overall average of 89% across all lenders.

Key findings:

- One in five mortgages is sold through a branch network – 27% for banks and 15% for mutuals.

- The intermediary channel remains a key route to market with six out of ten of all mortgages introduced by intermediaries.

-  On average across all lenders, 15% of mortgages were sold via the telephony channel – 15% for banks and 10% for mutuals.

-6% of mortgages were sold direct to consumers online.

- Applications going to offer were highest in the consumer and intermediary channels at 76% and 75% respectively.

- Offers to completion were also highest in the consumer and intermediary channels at 85% and 79% respectively.

Henry Woodcock, Principal Mortgage Consultant, Avelo commented:

“We were really encouraged by the response to the survey and the appetite from lenders to examine strengths, weaknesses and opportunities in current processes with a view to improving efficiency. Time to offer is seen by lenders, applicants and intermediaries as the key measure of efficiency and customer service.  

“It will be extremely interesting to see what changes are put in place over the next 12 months and the impact these have on mortgage efficiency.”

It is expected that greater changes lie ahead with MMR final rules meaning that non-advised sales are ruled out and all telephony sales will need to be advised which for many lenders will mean training more staff and re-developing systems. This presents a real opportunity for intermediaries as many lenders with mainly non-advised sales propositions will need to re-consider their distribution strategy.

Next year the survey will compare key performance indicators from 2012 to 2013 and will also look forward strategically to market drivers and opportunities in the next three to five years, post MMR and EU legislation.
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