Nick Rogers knows all too well the perils of negative equity – but it's not the end of the world, he says
The resurgence of low-deposit mortgage products, including 95% loan-to-value (LTV) options, has shifted the landscape. According to MoneyFacts Group, as of July 2024 there were 361 LTVs available in the UK – a huge uptick of 188 year on year from July 2023. And while these low deposit options are a huge draw for first time buyers, especially in the current cost-of-living crisis, they also come with higher interest – sitting at an average of 6.26% for a two year fixed or 5.78% for five year fixed.
For brokers like Nick Rogers (pictured), senior mortgage advisor at Prospect Mortgage Services based on the Isle of Wight, adapting to these developments means focusing on education, transparency, and building trust with clients – values that have been the bedrock of his career.
“We try to deal with most of our first-time buyers face-to-face if we can,” Rogers said. And, on a small island where relationships matter, this personal approach is central to his business. With many clients navigating the mortgage process for the first time, Rogers sees it as the team’s responsibility to guide them thoughtfully.
This is something clients seem to appreciate, with data from Boon Brokers finding that 83% of UK homeowners say that they don’t actually trust AI to accurately assess their individual mortgage needs and would rather deal with a human.
For Rogers, part of this focus on the human touch begins with a weekly team meeting – something he sees as a vital tool in maintaining the team’s high standard.
"We share case stories," he said. "Natalie, my daughter, has been with us since she was 15. She often feeds back different things we're listening to. She does a lot of the first-time buyer appointments and looks after some of our busiest estate agents. That really enables her to get quite a lot of experience in talking to customers and she often feeds back different things that we're listening to. [As a team] we also spend a lot of time talking to BDMs … especially like Skipton, Accord, and Barclays.”
Here, understanding the risks of low-deposit mortgages is crucial. Higher interest rates often increase the risks of lending – not to mention the very real threat of negative equity, a danger Rogers knows all too well.
"When we bought our first house, within a couple of years, it was negative equity," he said. He stressed that such situations are manageable with proper planning and a clear understanding of long-term goals.
“It only really matters if you're exiting the property market,” he said. “When you’re in it, you really think it's the end of the world – and you come to realize that negative equity is one of those expressions which strikes a bit of fear. However, it only really matters if you're exiting the property market. You’ve still got to live somewhere. For me, it’s about [helping clients] understand how to navigate these issues. I share my experience with my team, essentially helping them understand that scenario, so that they can use that to talk to people. Because people understand stories more than charts.”
Rogers believes education is key here – but takes issue with how it’s often framed. Instead of patronizing his clients, it’s about meeting them where they are – and not assuming they don’t know a thing about mortgages.
"’Educating customers’ is a terrible expression," he said. "It sounds patronizing, as if the person you're talking to is an idiot. They're not. They just haven't had that gap of knowledge filled in. And, as advisors, we have a responsibility to help them with that because I think it all starts there. People have to take responsibility for their decisions to get a mortgage, but at the same time, you want to help them get it with as much information as you can give them.”
For those receiving family assistance with deposits, Rogers underscored the importance of transparency. Joint borrower sole proprietor mortgages, he explained, offer clarity because both parties are involved in the process. Gifted deposits, however, can be trickier.
“Not everyone can give £20,000 to their son and not want it back,” Rogers said, emphasising the need to discuss terms openly. “Do they want it back? When do they want it back?” These are critical conversations that ensure all parties understand their obligations and prevent future complications.”
When advising first-time buyers, Rogers places a strong emphasis on affordability and forward planning. Many clients stretch their budgets to buy houses over flats, often needing to renovate.
“If they can turn a £200,000 property into a £225,000 property and it’s cost them hard work and £5,000 to do so, it’s great,” he said.
Compliance, particularly under the lens of consumer duty, is also a priority for Prospect Mortgage Services. Rogers takes a measured approach, ensuring clients understand their financial commitments fully before proceeding.
“Sometimes that might mean it’s not the right time for them,” he said, describing scenarios where potential buyers are advised to wait and improve their financial standing before taking on a mortgage. This honesty, Rogers believes, fosters trust and long-term relationships.
“We’ve been trading on a very small place for 22 years... If you didn’t do your job properly, you wouldn’t last very long,” he said.
Rogers’ philosophy extends to older clients exploring retirement interest-only mortgages and equity-release products. He acknowledged the misconceptions many have about these products, rooted in their unregulated past.
Ultimately, Rogers sees Prospect Mortgage as an ally to their clients, guiding them through decisions with honesty and care – something which will help Prospect Mortgage thrive in 2025.
“You’re probably the only person in the whole process who truly is on the customer side,” he told Mortgage Introducer.
