The Intermediary – January 2026 - Flipbook - Page 32
BUY-TO-LET
Opinion
Be careful what
you wish for
F
or more than a decade,
brokers have been the
dominant force in UK
mortgage distribution.
But as regulation
evolves and technology
advances, some lenders appear to be
questioning the role brokers play in
the market. That may prove a costly
miscalculation.
The rise of the intermediary
channel was not accidental. The
Mortgage Market Review (MMR)
effectively required most residential
borrowers to take advice when it was
introduced in 2014. At the same time,
growing complexity in the buy-to-let
(BTL) market meant brokers became
the most effective – and oen the only
viable – way for lenders to distribute
products at scale.
That model has served the industry
well. Yet increasingly, some lenders
– high street names, I should
add – seem, by their actions, to be
questioning the value of brokers in the
market of tomorrow.
This is most evident in the product
transfer (PT) market, where some
lenders appear to be reducing their
reliance on intermediaries. Dual
pricing, cuts to procuration fees and
more aggressively engaging with
borrowers approaching the end of
their deals all point to a desire to
bypass the broker altogether.
I can see why PTs are an
aractive target for large lenders
with established direct channels.
These customers are already on the
lender’s books and improvements
in technology make them easier and
cheaper to reach.
But this should give the industry
pause. Circumventing the advice
process increases the risk of poor
borrower outcomes. The only way to
be confident that a product transfer
is genuinely suitable is through full
advice, which includes scouring the
wider market to ensure a beer deal is
not available elsewhere.
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The Intermediary | January 2026
It also undermines the broker
distribution channel that underpins
both the residential and buy -to-let
markets. If the pendulum swings too
far, the consequences could be severe.
I know this because we have been
here before.
In the years following the financial
crisis, many lenders aempted to
push more business through direct
channels. The rationale was familiar:
tighter margins, a desire for control
and the belief that intermediaries were
an avoidable cost.
In practice, lenders soon discovered
it was extremely difficult to generate
sustainable volumes without brokers.
When they eventually returned,
the broker market they found was
weaker than the one they had le
behind. Years of reduced support
and inconsistent commitment had
eroded capacity and rebuilding that
infrastructure took significant time
and effort.
History repeating
The fact that similar dynamics appear
to be emerging again is worrying.
If major lenders move beyond just
testing boundaries and materially
shi focus towards direct channels,
the market will be poorer for it.
Much of this thinking is being
driven by advances in technology,
particularly artificial intelligence (AI),
which is oen presented as a solution
to almost everything. Its cheerleaders
envisage a world in which algorithms
materially reduce – or even remove –
the need for brokers altogether.
That strikes me as an overly
optimistic and simultaneously
undesirable outcome. AI undoubtedly
has potential. Used properly, it can
support skilled professionals and
speed up decision-making. But there
are serious questions about whether it
will ever deliver the efficiencies some
anticipate or whether it will make the
market function more efficiently.
At Keystone, AI will never make an
DAVID WHITTAKER
is CEO at Keystone Property
Finance
underwriting decision. Our approach
to technology is about supporting
brokers and reducing administrative
burden, not replacing human
judgement. Nor would we ever
want it to. I am less confident that
mainstream lenders would make the
same commitment – and that should
concern both brokers and borrowers.
Regulation has not helped brokers,
either. The FCA’s removal of the advice
requirement in most residential cases
now allows borrowers to transact on a
non-advised basis if they wish. It also
indicates that the regulator might be
truly and worryingly agnostic when it
comes to advice.
My concern is that lenders in both
the residential and buy-to-let markets
will interpret this as a green light to
rebalance direct and intermediated
business, without knowing whether
the efficiencies promised by AI will
ever fully materialise. History suggests
that is a risky bet.
As we found a decade or so ago, a
strong broker market is only truly
appreciated once it is no longer there.
And once capacity is lost, it cannot
simply be switched back on.
The pendulum between direct and
intermediated business will always
swing back and forth. But we should
not forget the reasons why it has
swung so far in brokers’ favour over
the past decade.
Many lenders publicly profess their
commitment to the broker market.
Over the next few years, we will
discover which of them genuinely
mean it. ●
