Concern is impacting all involved within the mortgage process
The economic outlook of the mortgage market is a real concern to not only consumers but to distributors and brokers.
Following the Bank of England’s announcement of the largest increase in interest rates seen for 33 years, recession predictions have grown. This has coincided with a cost-of-living crisis expected to worsen as food prices continue to climb, as well as fears of energy blackouts during the winter.
“Without a doubt, we are living through very unpredictable times and the job of mortgage adviser has rarely been more challenging,” said Dominik Lipnicki (pictured), director of Your Mortgage Decisions.
Lipnicki noted that brokers are faced with ever increasing rates, product withdrawals and, understandably, very worried clients.
“Just like in 2008/2009, the best firms will prosper but adjustments will need to be made as we are in a different market to even a few weeks ago,” he said.
Importance of advice
Lipnicki outlined that it has never been more important to ensure that client banks are serviced with regular contact, particularly at a time when many borrowers worry about the cost-of-living crisis and rising mortgage rates.
“Holistic offerings are a must, and a broad range of products need to be available, such as equity release, protection, second charge lending as well as residential,” he said.
According to Lipnicki, even if a broker does not sell these particular products themselves, a good referral scheme is a useful way to help clients in all situations.
“Quality over quantity, especially during a turbulent time. We invest heavily in client acquisition on the understanding that what you put in is what you get out, although I do realise that this can be more of a challenge to small firms,” he said.
Read more: How to survive tough market conditions
“There is a real need for clients to seek our services and, let’s face it, if we are finding the situation a challenge, imagine what the consumer is feeling,” Lipnicki added.
Tips for brokers
Anil Mistry, director and mortgage broker at RNR Mortgage Solutions, pointed out that the changes in mortgage interest rates and increased stress tests for a buy-to-let mortgage are not in brokers’ control.
“As brokers, we need to stay positive and proactive and be in control of what we can control,” he said. “This is to stay on top of what policies and rates have changed, so we can give the correct information to our clients.”
He believes that keeping in touch with existing clients, especially when their current product is coming to an end, has never been more important. That way, Mistry explained the client’s current mortgage can be reviewed to make sure it meets their needs.
Mistry said that having a protection review for existing clients is also key given current market conditions.
Read more: Brokers reveal fear is rising among customers
“This is to make sure it is still affordable and meets their needs, especially due to the increased living costs,” he added. “This will make sure they are not under-protected, and policies that are needed, do not end up getting cancelled.”
Mike Staton, director at Staton Mortgages, said that for the first time in three years, brokers are able to take some respite with how quiet it is in the industry.
“Hopefully, brokers have budgeted for this quiet period as it was inevitable after the rollercoaster we have been on during the past three years,” he added.
He believes it is now important for brokers to go back and review clients’ protection, as while mortgages have been at the forefront of everybody's mind, he said protection may have been placed on the back burner. These opportunities, he stated, are going to be vital to see brokers through the next two to three months.
