73% of commercial brokers of questioned for Shawbrook Bank’s latest Broker Barometer said their business had grown during the second quarter of 2014.
The brokers reported varying growth with 62% experiencing 10-20% growth and 11% reporting over 30% growth.
One broker said: “I feel that confidence is returning [to the market], particularly with property investors and we are seeing more enquiries from people who have taken a break from the market.”
Looking forward, brokers were positive about further growth, with 76% expecting business growth in the next quarter. The outlook was similarly positive on a macroeconomic level, with 81% anticipating UK growth in the next 12 months, and the remainder expecting stability. One respondent said: “[I expect] increased growth over the next 12 months – I think this will be a stable steady growth.”
Responding to a question on commission, 89% of respondents said they already disclose all commissions and charges to their clients, demonstrating a high level of transparency in their dealings.
There was some speculation about the impact of an election year and possible government intervention on both the economy and the market, while rising interest rates were also mentioned as a key factor: “I am very positive going forward [about the economy as a whole]. However, a change in interest rates may slow the property and mortgage market down slightly and we may see a levelling out of business for six to 12 months whilst investors/landlords have a pause.”
When asked about industry challenges to growth, brokers believed that the most likely challenge was lenders placing restrictions on funding. 56% rated it as the greatest challenge this year. Compared to this, the Mortgage Market Review (MMR) was seen to have a limited effect, with only a third of brokers seeing it as a challenge to their business.
When asked, 46% of respondents said that the MMR would not have any impact on their business and the remainder were split evenly as to whether it would have a positive or negative effect in the future. Many of those who foresaw negative impacts focused on the residential rather than commercial finance market. Some cited residential lender service levels and turnaround times on residential finance deals, while some brokers saw a brighter side: “more clients will be driven to use brokers due to difficulties in obtaining finance”.
Karen Bennett (pictured), sales and marketing director for commercial mortgages at Shawbrook Bank, said: “Brokers are the beating heart of the industry and it is extremely positive to see this level of optimism. We work hard to support our brokers in any way we can and we’re constantly engaging with them to develop new products and processes that will help them grow their businesses further.
“Our appetite to lend remains strong and we continue our focus on transparency. With the general election approaching, and speculation around rising interest rates rife, we plan to work with our brokers to help them deliver stability and security for their clients.”