Press releases

Legal & General Network points to MMR as potential driver of increased intermediary share.

Stephen Smith - Legal & General Director of Housing & Public Affairs
Stephen Smith
Legal & General Director
Housing & Public Affairs

28 August 2013

Stephen Smith - Legal & General Director of Housing & Public Affairs
Stephen Smith
Legal & General Director
Housing & Public Affairs

 Increased operational and compliance costs could be a catalyst for lenders to favour intermediary distribution

Legal & General Network has today pointed to the Mortgage Market Review (MMR) as the main driver behind an increase in the intermediated share of lending. With the regulation making advice a requirement of the vast majority of mortgage sales many lenders may feel that the cost of providing sales in branches, via the phone and on-going supervision and management of staff responsible for these advised sales  is likely to become prohibitive.

As a result the direct channel will become less cost-effective and many are likely to turn to intermediaries to pick up the slack. Recent figures from the Council of Mortgage Lenders (CML) seemed to bear this out suggesting that the shift may already be underway.  According to the CML intermediary market share has increased from 53.5% in Q1 2013 to 57.5% in Q2 2013.

Stephen Smith, Director, Housing and External Affairs, Legal & General Network, says:

“We are seeing very clear indications that lenders are starting to favour intermediary distribution channels. Although you could point to capacity constraints as a reason for this shift we believe that MMR is a significant factor. The real impact will be made clear in Q1 and Q2 next year as lenders deliver their new capabilities but the recent spike highlighted by the CML is unlikely to abate as the new rules make the role of advisers more central to supporting lenders and borrowers alike.”

Notes to editors

About Legal & General

Established in 1836 L&G has been in business for 175 years, illustrating the company’s credibility and experience in every kind of economic climate. Legal & General currently has over 7 million customers for its life assurance, pensions, investments, general insurance plans and mortgage products. In the mortgage market, L&G aims to deliver customers the right mortgage, protection and related solutions for their homes and families by providing their advisers with outstanding products and expert business support

www.legalandgeneral.com/mortgages


For more information please contact:

Alyson Bowcott

Alyson Bowcott
PR Manager, Legal & General Group

t: +44 (0) 20 3124 2092
m: +44 (0) 7764 582574
e: alyson.bowcott@landg.com


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