Stay ahead of the curve and future-proof your business with Mintel’s UK Mortgage Advice Market Report 2023. Our full report is packed with consumer-led market intelligence, the latest trends and consumer behaviours affecting your industry. Get a 360° view of the UK Mortgage Advice market including market size, share and forecasted growth to help you align your business strategy with the needs of your audience.
Below, we’ve handpicked the key insights analysed in the full report and summarised the core topics.
Our Report Delivers Key Insights On
- The impact of the rising cost of living on the mortgage advice market.
- How technology is changing the mortgage advice market.
- Launch activity and innovation in the mortgage advice market.
- Experience of mortgage advice and perceptions of the main benefits.
- Attitudes towards mortgage advice and advisers.
Current Mortgage Advice Market Overview
Mintel estimates that intermediaries accounted for 79% of mortgage sales in 2022, a slight increase on 78% the previous year. High inflation, and subsequent interest rate rises, are creating both challenges and opportunities for mortgage advisers. As mortgage holders come off fixed rates, they will find available mortgages are much higher than the last time they engaged with the market, heightening the demand for advice. However, the higher cost of borrowing will lessen home purchase activity and related mortgage advice.
Mortgage Advice Market Trends
Expertise pays off
The cost-of-living crisis has increased the focus on household finance, and as a result, 74% of existing and prospective mortgage holders say that the rising cost of living has made it more important to get advice from a mortgage adviser. This also speaks to one of the main perceived benefits of using an adviser to arrange a mortgage: gaining access to the best deals. Over a third of consumers consider this to be one of the main benefits, while a third also mentioned time saved.
Mortgage advice goes digital
Over time, the mortgage advice industry has been transitioning to a more digital service. This was accelerated during the pandemic, when advisers were forced to switch to fully remote models. Consumers quickly became familiarised with online-based advice, and there is now an increased consumer demand to operate online. In fact, an initial meeting with a mortgage adviser was the only mortgage-related activity that the majority of consumers would rather do in-person than online via a computer. As the way consumers interact with the mortgage application process changes, it is important for mortgage advisers to bear channel preferences in mind and assess how well they meet the needs of their clients.
Leading Mortgage Brokers Covered in this Report
Countrywide/Connells Group, Mortgage Advice Bureau, John Charcol, Habito, London & Country, Finova.
Additional Features Included with Your Purchase
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To learn how to connect with your audience, purchase our full UK Mortgage Advice Market Report 2023. Discover lucrative innovation opportunities to help your business grow during times of financial uncertainty.
Expert Insights from a Finance Industry Analyst
This report, written by Charlie Landsborough, a leading financial services analyst, delivers in-depth commentary and analysis to highlight current trends in the UK mortgage advice market and add expert context to the numbers.
Conditions continue to be challenging for mortgage advisers in 2023. Households are feeling the pressures of the cost of living crises and mortgage costs continue to rise. However, whilst the current economic climate is hampering activity, consumers are placing a greater value on mortgage advice. The current heightened uncertainty presents mortgage advisers with a chance to emphasise the value of their experience and expertise.
Charlie Landsborough
Analyst – Financial Services
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Overview
- Key issues covered in this Report
- Products covered in this Report
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Executive Summary
- The five-year outlook for mortgage advice
- Figure 1: Category outlook for mortgage advice, 2023-27
- The market
- Intermediaries account for 79% of mortgage sales
- Figure 2: Proportion of mortgage sales volumes, by direct and intermediary channels, 2022 (est)
- High inflation and rising interest rates will impact mortgage affordability
- Figure 3: Interest rates for selected types of mortgages, January 2016-May 2023
- Bank of England ditches mortgage affordability stress test
- Advisers will need to meet new Consumer Duty rules
- Companies and brands
- Overall number of firms advising on mortgages remains stable in 2021
- Figure 4: Number of firms and staff advising on mortgages, by type of firm, 2020 and 2021
- Mortgage advisers continue to consolidate
- Mortgage advisers continue to invest in digital tools
- The consumer
- Consumers are most likely to turn to an intermediary next time they use advice
- Figure 5: Main source of mortgage advice when arranging next mortgage, 2023
- Early stages of the application journey happen online
- Figure 6: Channel preference for completing mortgage-related tasks, 2023
- Access to the best deals remains the top reason for using an adviser
- Figure 7: Perceived main benefits of using a mortgage adviser, 2023
- The rising cost of living has increased the importance of mortgage advice
- Figure 8: Attitudes towards mortgage advice and advisers, 2023
- Mortgage advisers are acting in good faith
- Figure 9: Past experience of mortgage advice, 2023
- The five-year outlook for mortgage advice
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Issues and Insights
- Inflation is hampering activity but increasing demand for advice
- Mortgage advice continues to go digital
- Opportunities to tap into demand for comprehensive mortgage services
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Market Size and Performance
- Category outlook
- Figure 10: Category outlook for mortgage advice, 2023-27
- Intermediaries account for 79% of mortgage sales
- Figure 11: Proportion of mortgage sales volumes, by direct and intermediary channels, 2022 (est)
- Figure 12: Proportion of mortgage sales volumes, by direct and intermediary, 2014-22
- Almost all new mortgage business is advised
- Figure 13: Proportion of advised and non-advised mortgage sales, by volume, 2022 (est)
- Figure 14: Proportion of advised and non-advised mortgage sales, 2014-22
- Category outlook
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Market Composition
- The UK is home to around 5,000 firms providing mortgage advice
- Figure 15: Number of firms and staff advising on mortgages, by type of firm, 2020 and 2021
- Single adviser firms remain a key part of the market
- Figure 16: Number of mortgage broker firms and staff, by adviser band, 2020 and 2021
- The UK is home to around 5,000 firms providing mortgage advice
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Market Drivers
- High inflation and rising interest rates will impact mortgage affordability
- Figure 17: Interest rates for selected types of mortgages, January 2016-May 2023
- Consumers’ financial wellbeing has fallen from the highs of 2021
- Figure 18: Household financial wellbeing index, 2016-23
- Mortgage approval rates remain subdued…
- … dragging down house prices
- Figure 19: UK House Price Index (average house price, all property types), January 2007-March 2023
- High inflation and rising interest rates will impact mortgage affordability
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Regulatory and Legislative Changes
- Help to Buy: Equity Loan scheme comes to an end
- Bank of England ditches mortgage affordability stress test
- Mortgage Guarantee Scheme extended by a year
- Advisers will need to meet new Consumer Duty rules
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Competitive Strategies
- Pivotal Growth continues acquisition spree
- Estate agents add mortgage advice to their menu
- Twenty7Tec acquires Broker Sense and Bluecoat Software
- Mortgage Advice Bureau acquires The Fluent Money Group
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Launch Activity and Innovation
- Finova launches lender-broker onboarding software
- Mortgage Broker Tools launches phone helpdesk
- Mortgage Magic launches online chat platform for brokers
- Hometrack and Mortgage Brain partner to digitise mortgage applications
- Iress, Mortgage Brain and Twenty7Tec partner to develop standardised mortgage connectivity language
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Key Players
- Largest national brokers
- Countrywide/Connells Group
- Mortgage Advice Bureau
- London & Country
- John Charcol
- Habito
- Mortgage networks
- PRIMIS Mortgage Network
- The Openwork Partnership
- Quilter Financial Planning
- Mortgage clubs
- Legal & General Mortgage Club
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Mortgage Ownership
- 24% of adults own a home with a mortgage
- Figure 20: Current housing situation, 2023
- Millennials and Generation X are the key target markets for mortgage advice…
- Figure 21: Current housing situation, by generation, 2023
- A third of under-35s hope to buy their first home in the next two years
- Figure 22: Prospective homeowners, by generation, 2023
- 24% of adults own a home with a mortgage
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Main Source of Mortgage Advice
- 81% used an adviser when they last arranged a mortgage
- Figure 23: Main source of mortgage advice when arranging last mortgage, 2023
- Consumers are most likely to turn to an intermediary next time they use advice
- Figure 24: Main source of mortgage advice when arranging next mortgage, 2023
- FTBs more likely to choose a bank or building society adviser
- Figure 25: Main source of mortgage advice when arranging next mortgage, by existing mortgage owners and prospective first-time buyers, 2023
- Almost a fifth of mortgage owners don’t expect to use a mortgage adviser in the future
- 81% used an adviser when they last arranged a mortgage
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Channel Preferences for Mortgage Tasks
- Early stages of the application journey happen online…
- Figure 26: Channel preference for completing mortgage-related tasks, 2023
- … and the further along the journey, the higher the value of in-person advice
- Figure 27: Channel preference for completing mortgage-related tasks, 2023
- Less experienced consumers place more value on in-person guidance
- Figure 28: Preference for completing mortgage-related tasks in-person/face-to-face, 2023
- Early stages of the application journey happen online…
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Perceived Main Benefits of Mortgage Advice
- Access to the best deals remains the top reason for using an adviser
- Figure 29: Perceived main benefits of using a mortgage adviser, 2023
- Convenience is also key
- FTBs place a greater value on general advice…
- Figure 30: Perceived main benefits of using a mortgage adviser, by existing mortgage owners and prospective first-time buyers, 2023
- Access to the best deals remains the top reason for using an adviser
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Attitudes towards Mortgage Advice
- The rising cost of living has increased the importance of mortgage advice
- Figure 31: Attitudes towards mortgage advice and advisers, 2023
- Online reviews are essential in selecting an adviser…
- Figure 32: Agreement with the statement “I would use online reviews to help me find a good mortgage adviser”, by existing mortgage owners and prospective first-time buyers, 2023
- Customer loyalty is strong
- The rising cost of living has increased the importance of mortgage advice
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Past Experience of Mortgage Advice
- Mortgage advisers are acting in good faith…
- Figure 33: Past experience of mortgage advice, 2023
- …and being clear about fees…
- … but they’re not being loud enough about it
- Mortgage advisers are acting in good faith…
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Appendix – Data Sources, Abbreviations and Supporting Information
- Abbreviations
- Consumer research methodology
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