"Being a broker in the current market is testing"
The mortgage market is continuing to endure a difficult period, with the latest complications caused by the rising base rate, cost-of-living crisis and lenders removing products at short notice on the back of the mini budget.
As such, concern has risen across the market, stemming from both consumers as well as market professionals.
A fearful time
“Being a mortgage broker in the current market is testing,” said Sarah Tucker (pictured), founder of The Mortgage Mum
Tucker said that clients are more fearful than they have been for a while and outlined that they are concerned for the financial health of their households and what the future holds. As a result, she has seen clients feeling the need to take a more conservative approach than usual.
“Clients want to predict the future, which is not possible, and they just do not want to ‘get it wrong’,” Tucker said.
Read more: How brokers can best interact with worried clients
She added that there is a huge focus from customers on rates, and highlighted that some clients are extending terms or wanting to look at interest-only options to ease the financial stress.
Lyn Webb, director of Mortgage Saving Experts, who was speaking alongside Stuart Moffat, mortgage and protection broker at Mortgage Saving Experts, concurred with Tucker that she has seen a large number of clients taking a conservative approach to the market.
“Lots of people are asking to fix their interest rate or remortgage rather than move or increase their borrowing,” she said.
While she said this will provide peace of mind as to what a client’s costs will be each month, she noted that customers must also consider that if rates do go back down they will be stuck paying a higher rate for a period of time.
“The news states there will be huge increases coming and sometimes there are reports that rates are to go back down - neither of these may happen and it is down to the client to look at what is important to them,” Webb added.
Communication is key
Webb outlined that mortgage lenders do not appreciate the scale of the panic they cause by pulling interest rates as quickly as they do.
She highlighted that some lenders are informing brokers at 2pm on a given day that by 6pm they will be removing a rate.
“Lenders need brokers, so there must be more communication and they should give brokers more time to react,” Webb said.
She added that it makes life for a broker very difficult by having to rearrange appointments in order to put an application through before the time when the rate will be withdrawn.
According to Webb, as this is happening across the market, she said most other brokers are doing the same which leads to a waiting system to even get on a lender’s website to submit the mortgage application.
Demand still surpassing supply?
Despite the complications of the market at present, Webb said demand is still surpassing supply and noted that some brokers are continuing to populate their pipelines well.
Read more: How can mortgage professionals survive a recession?
“Established brokers with clients going back years are very busy,” she said. “Brokers who are qualified in equity release also find themselves busy, as they have a generation of asset-rich cash poor people who wish to release funds to see younger family members get on the housing ladder.”
However, she outlined that some of the newer, recently-qualified and inexperienced brokers may now struggle, as Webb noted they will not have built up the relationships to help carry them through this period.
