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A South Australia-based non-bank lender has observed that home buyers are increasingly turning to mortgage brokers as lending curbs and cost of living pressures continue to place barriers on entering the property market.
HomeStart Finance, which offers loan features such as lower deposits and shared appreciation loans, says it has been seeing year-on-year growth in broker referred loans, with 33 per cent of its new lending written by brokers in 2015-16, 31 per cent in 2014-15 and 26 per cent in 2013-14.
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HomeStart CEO John Oliver commented that the increase in broker referred loans reflects homebuyers’ desire to seek out lenders offering innovative solutions and home loan options that best suit their situation.
Mr Oliver also pointed to recent figures from APRA, which revealed that new residential home loans originating through the broker channel increased by 25 per cent in the June 2016 quarter.
Further, the APRA data showed that as a percentage of total residential home loans, brokers were responsible for 48 per cent in the June quarter, up from 46 per cent in the previous quarter.
“This result shows that increasing numbers of home buyers are going to a broker, rather than walking into a bank, clearly cementing the place of brokers in the Australian loan market,” Mr Oliver remarked.
HomeStart said that it has continued to strengthen its broker distribution network over the past year by partnering with aggregator group FAST, which has broadened its reach by giving the lender representation from a further 80 brokers.
“We have continued to focus on the broker market over the last few years, as it is a good strategic fit with our distribution model,” Mr Oliver commented.
“Brokers provide us with a cost-effective channel to broaden our geographical footprint and we continue to invest in this channel to ensure we are a strong partner.”
[Related: Report finds ‘surprising’ boost in FHB confidence]
