In a Q&A session at the Network Data annual conference, one broker voiced his concern that no one was talking about what was going to happen when large numbers of people found they could not remortgage and the repercussions this could have on the market.
Kevin Hindley, chief executive of Loanmakers, agreed with the concern, and said: “If a client was struggling before, they could borrow their way out of it. But as that becomes more difficult, they may find they can’t. The Individual Voluntary Arrangement route is such a shame, when before clients had somewhere to go.”
However, he added: “Nobody really talks about customer responsibility and not getting themselves into that position. Clients have to realise things are getting tight.
But I share the worry. If people can’t remortgage out, then we have to.”
Richard Farr, director at the Association of Mortgage Intermediaries, said: “It will become part of brokers’ jobs to have conversations with clients to take some costs out of their life or lose their house. But it will build some serious customer loyalty; if you sort that out, then you will have a customer forever.”
Meanwhile, a major lender has admitted that the toughest challenge facing brokers in the current market was simply placing the business they had, as lender numbers reduce and products are pulled at short notice.
Tim Hague, managing director of BM Solutions, said that the funding challenges in the market were making it more difficult than ever before to place clients.
He said clients had to be educated that the market is such that a deal available one day might not be available the next.
He added: “There is also the challenge around income. There is a healthy demand for mortgages, but lenders are tightening criteria. There is less business to place and brokers need to look at different ways to replace their income. There are two things to do and it’s not rocket science. One – you must actively manage your client base and two – added protection sales.”
