Brokers’ share of the mortgage market is approaching 50pc for the first time since the Celtic Tiger as fewer borrowers go direct to banks for their home loans, according to new data seen by the Irish Independent.
igures compiled by the Association of Mortgage Advisors (AMA) using data from both banks and non-bank lenders show that 44.6pc of all mortgages written in the first quarter of the year were originated by brokers.
The shift is most pronounced in the coveted switcher market, where “superprime” borrowers have their pick of the best offers. More than six in 10 switcher mortgages were written via brokers in the first three months of the year, compared with 42.6pc of first-time buyers.
The figures confirm a trend of customers migrating toward independent advice rather than dealing directly with their bank, which has significant implications for the potential new competitors arriving in the market.
“During Covid mortgage brokers still needed to do business,” said Trevor Grant, chairman of AMA.
“Banks were closed, their sales targets were set aside, and people had more time to pursue the best deals and advice.”
The current broker share has come just 13pc in 2011, when the only active lenders were Bank of Ireland and AIB.
It was at roughly 25pc before the pandemic but has nearly doubled in the last two years as structural changes in the market – such as the exits of Ulster Bank and KBC and the growth of non-bank mortgages – have favoured intermediaries over direct selling.
The last time brokers commanded this much influence was in 2007, when they originated half the business in a €40bn market with 13 lenders.
The dynamic today is very different, however.
“Ulster Bank and KBC make up 20pc or 25pc of the market and have some of the most competitive products,” said Mr Grant.
“They have to be replaced.”
He said the switcher market had become “big business” recently as non-bank lenders such as Finance Ireland and Avant debuted highly competitive products for premium customers with high incomes and low debt loads.
Meanwhile, AIB and Bank of Ireland have pursued growth via acquisition, with both major banks striking deals to buy home loan portfolios from the departing foreign banks, leaving much new business in the €12bn market to the broker channel.
Mr Grant said there was now an opportunity for non-bank lenders seeking to enter the Irish market to leverage a strong broker channel to challenge the remaining incumbents in the market.