This was illustrated in the latest Money and Credit statistics from the Bank of England which showed that net residential mortgage borrowing increased for the fourth consecutive month in August to £1.2bn, up from £2m in July. The figures also outlined that gross lending rose from £19.1bn in July to £19.7bn in August, while gross repayments were little changed at £18.9bn in August.
However, net mortgage approvals for house purchases fell from 49,500 in July to 45,400 in August, the lowest level in six months.
Turning our attention to the remortgage market, approvals for remortgaging with a different lender saw a significant decline from 39,300 in July to 25,000 in August, the lowest since July 2012 (24,400). This is a telling figure which indicates that this gap is being plugged by a rising number of PTs and this is a trend which is likely to grow.
In fact, it’s looking increasingly likely that 2024 will be a PT dominated market as more homeowners are choosing this option due to a mix of ease of access, affordability concerns and lenders now working harder to prioritise customer retention.
Retaining customers
Historically, in a market where new mortgage lending was almost falling through the door, retention wasn’t always a priority for lenders who tended to have huge pipelines of business in place. However, in current economic and market conditions where activity levels are far less prolific, mainstream lenders are focusing more on bolstering retention levels and introducing more competitive and bespoke PT options.
We are seeing many specialist lenders introduce PT facilities which may also provide a greater level of confidence to advisers in recommending such lenders to new borrowers, knowing that they are able to offer PTs when those deals come to an end.
Although not all lenders offer PT, which increases the risk of borrowers becoming mortgage prisoners and further highlights the role of the broker in safeguarding their present and future options.
Looking at the data
With lenders upping their retention game, so too must advisers.
One way to do so is to put themselves in a position to better mine the data attached to their existing client database. In doing so, they can arm themselves with the intel and insights to deliver timely and appropriate solutions even in such a rapidly changing marketplace.
An important factor which will help retain clients in what is becoming an increasingly competitive landscape.
Integral within this process is incorporating a CRM system which can not only help intermediary firms to better manage their customer data, offer stronger sales support, deliver actionable insights, integrate with social media and facilitate team communication.
But also, to support lender integration, audit trails, automated valuation models (AVMs) and credit searches to reduce admin burdens.
Moving forward, it’s those intermediary firms who are constantly pushing the advice envelope by generating relevant, personalised, and connected experiences to meet the ever-changing needs of a new generation of borrowers who will continue to grow and prosper, even during a time when the purchase market remains subdued.
This isn’t just limited to PTs and remortgages, brokers can open avenues to other areas of advice such as alternative forms of lending, protection and conveyancing – all of which contribute to the end customers’ needs and priorities.
And working with the right tech partner will provide that all-important key to unlocking the rewards that are still on offer throughout the wider mortgage market in one of the most cost-effective ways possible.
