It’s something mortgage advisers and brokers know they need to be discussing with their clients, and yet, it’s an incredibly difficult thing to do. Mortgage clients rarely consider themselves vulnerable, and those who do often want to remain under the radar, using surprisingly effective coping mechanisms to hide their vulnerabilities. Even for trained clinical experts, identifying someone who’s at risk can be far from easy. 

And of course, there is a great deal of stigma surrounding vulnerability. In fact, even using the word ‘vulnerable’ can bring negative connotations to a conversation with a client.  

So, how then, can a mortgage adviser discuss this topic in a way that will put their clients at ease, rather than prompting them to close up? How can brokers and advisers talk about vulnerability without actually using the term ‘vulnerable’? And on top of this, how can an adviser or broker talk about this to their clients in a way that they themselves also feel comfortable too? 

What is vulnerability? 

First and foremost, we need to pin down exactly what we mean by vulnerability. It’s a coin with two sides: the clinical definition and the actual perception. 

In clinical terms, to be ‘vulnerable’ means to be at risk or exposed to potential harm. It’s nothing to do with fault or weakness in the individual, but rather with one of the factors in their environment or situation not providing adequate safety. So, it’s all about what’s happening around that individual and how an adviser can support them in moving forward to a different place in their life. 

This sounds great on paper. But language shapes perception, and to be labelled as vulnerable almost becomes a perceived personal flaw. There can be a sense of powerlessness, that you’re weaker or less capable than others. 

There’s a discrepancy between the clinical definition and the real-world perception of vulnerability, and it’s the perception that causes the feelings of shame or embarrassment that prevent people from accessing the necessary support. They don’t want to disclose their situation in case they’re met with judgement, so opening up to a mortgage adviser can feel like an intimidating prospect.  

We need to reframe vulnerability 

We need to reframe financial vulnerability as financial wellbeing. This is about taking a more holistic, person-centred approach, so that you’re seeing all of an individual’s strengths, rather than just the negatives. Instead of asking what’s missing, ask how you can maximise what resilience is already there. 

As for how to actually communicate with the mortgage client, I would suggest that you consider talking about financial stresses or financial challenges, rather than labelling them as vulnerabilities. The goal is to normalise this discussion, making it less stigmatised and less specific to that person’s perceived inability.

You’re just talking about stresses and challenges any of us could face at any given time, speaking person to person about life’s difficulties. We all go through peaks and troughs, and we can all be vulnerable at different points in our lives. This is all about the human experience. In the context of an adviser and their client, we’re just recognising it in a financial space. 

Never assume  

Assessing a client’s state of mind is difficult, so mortgage advisers are often taught to look for certain criteria or buzzwords. What we want, however, is to avoid making assumptions. If you hear a buzzword, like divorce or bereavement, you might immediately think you know what that client is struggling with, and there might even be some truth to your assumption. But there could be more beyond the circumstance that we’re not seeing, and we have to understand how it affects that individual. 

The way to achieve this is through active listening by the mortgage adviser. Perhaps a recent divorcee has just come out of an abusive situation and getting away has taken incredible resilience and planning. Perhaps there’s a sense of relief or even newfound financial freedom. By homing in on certain assumptions, we can often jump to solutions that aren’t right for that individual, rather than asking what would be helpful. But we can’t just assume that because we’ve heard a buzzword, we’re automatically looking at certain negative connotations. Remember every situation – and every client – is unique.  

The key is to truly hear what the individual is actually saying. Whether it’s divorce, bereavement or mental health, if you really listen to that person’s experience – hear not only the negatives, but also the positives – you might also hear lots of strengths and resilience. It’s about seeing your client for all they are and working together to determine what’s actually going to be helpful.  

Goal setting as a way to start the conversation  

If a client is really struggling to open up about their circumstances, I often use goal-setting as a way of exploring some of the challenges they’re facing.  

Ask the client what their end-goal looks like. Then, work backwards and try to determine what steps would bring them to that goal. By mapping out a pathway, we often start to shed light on what the client’s life is like and what hurdles they’re facing, ultimately beginning to identify some of those big life events or issues. We need to move away from categorising individuals by life or health events and just asking where someone is on their path. 

Other terms to avoid might relate to certain conditions or particular life events the client is navigating. Neurodiversity is a great example. Neurodiversity is a normal human condition – it’s just a different way that the brain works – but it’s the sort of quality that some advisers might immediately label as a vulnerability. This can be hugely detrimental to building a relationship with a client, so we have to be really careful about how we’re labelling or referring to certain things.  

Keep questions open-ended to encourage further discussion without the pressure to disclose specific details they might not yet be ready for. Remember to work at the pace of your client, and keep responses reflective and empathetic. For example, you might say, “It seems like you’ve got a lot on your plate and it’s causing you a lot of worry. Can you tell me more about those worries?”  

Try to keep an open dialogue for questions and feedback, demonstrating that their opinions and concerns are valid and valued. Don’t assume you’re getting it right because you’re following ‘best practice’, rather check these methods are actually working for the client.  

Technology can help 

This is a complex area, requiring so much more nuance than a simple set of questions or criteria. It is essential to get the right technology and processes in place to properly support each and every client. A digital assessment, capable of removing subjectivity from the process and ensuring consistency across an entire client base is therefore paramount. Having a full overview of the customer will then allow the adviser to speak constructively about vulnerability in the right way.  

It will also allow them to assess how their clients are feeling and where they’re at with their financial decision-making, in a non-intrusive, non-judgemental way. 

To use ‘later life lending’ and ‘equity release’ interchangeably, could damage our industry at a time when we’re all working so hard to develop and sell wider products and options for borrowers aged 50 to 90-plus years old. 

What is later life lending? 

Later life lending does not simply refer to equity release, otherwise known as lifetime mortgages. No matter how old your client, a lender may still consider them suitable for a standard capital and interest mortgage or a standard interest-only mortgage, as well as the more traditional retirement interest-only (RIO), and equity release options. 

While equity release is a great solution for some borrowers, the Financial Conduct Authority (FCA) has, since July 2023, been urging discussions around alternatives to equity release in the later life lending market. 

Consumers aged 50 to 90-plus should not feel restricted to equity release products in later life. There are hundreds of wider product options on the market now for people in this age bracket. Many borrowers in this age group that we talk to neither want to nor have to release equity from their homes. Some do, and that’s great – it works for them. But it’s not for everyone. 

Instead, lenders such as LiveMore that specialises in later life lending, take a truly holistic view on affordability, what qualifies as income, and what kinds of property they’ll lend on. These lenders can offer not just equity release (lifetime mortgages) products, but also standard capital and interest, standard interest only and RIO mortgages. 

When the FCA published its Later Life Lending Review in September 2023, they made it very clear that the advice provided to many older borrowers did not meet the standards expected due to firms insufficiently evidencing the consumer’s individual circumstances, and the advice lacked discussion around alternatives to equity release mortgages. 

Technology driving Consumer Duty compliance in later life lending 

We understand that the wider later life lending market can seem challenging to brokers new to the market, or those who specialise purely in equity release. As a result of broker feedback on the subject, we have developed an affordability calculator and product matching engine called LiveMore Mortgage Matcher, this works with brokers to take away the complexity of selecting the appropriate product and amount a client can afford. Helping to cut through the complexities of later life lending.  

What’s more, since it launched in September 2023, intermediaries have secured a 41% uplift in the loan amounts they can offer their over-50s clients. This kind of technology supports Consumer Duty compliance, making it so much easier for lenders and brokers to put the consumer first, rather than the product. 

The results of our latest survey show that GI has consistently become more important for advisers, with fewer missing out on opportunities year-on-year. 

One thing has remained consistent, however. Each year, advisers report regularly missing out on GI opportunities with remortgage clients. One in five advisers say they “rarely” or “never” discuss GI with this group.

This statistic has not budged since we began the survey. So, what is it that makes this group of clients challenging to engage, and how can advisers overcome it? 

Revisiting and reassessing policies 

One of the most common perceived blockers is that the client already has an existing policy in place. But this may no longer meet their needs – especially if they’ve been on a lengthier mortgage term – and it could be leaving them financially exposed. Advisers can therefore add a lot of value by offering to do a review.

The first thing to do is ask remortgage customers for a copy of their existing policy to enable like-for-like comparison. Ask probing questions: Have they purchased any big-ticket items recently? Do they ever work from home? Has their home undergone any renovation or extensions recently? Do they have a child at university?

Advisers will quickly establish whether the current level of cover is still meeting the client’s needs. Even if it is, check whether the policy is still competitive. Offering to do a review could actually result in saving them money while providing the same level of cover – something they would undoubtedly appreciate and that would help strengthen the relationship.

Leaning on technology 

Using technology tools to support the conversation can also be really valuable. Tools like Defaqto Compare, which provides like-for-like product comparisons and makes the process more transparent for customers, can help to build trust.

It’s a great approach to take with remortgage customers because they’ll be able to visually see where their existing policy may be falling short in certain areas. 

Technology tools can also be really useful in identifying which customers might benefit from a home insurance review. We have a flagging system in place, for example, that flags policies that are long-standing – serving as a visual prompt to encourage advisers to have that conversation. 

We also know from speaking to advisers that renewal dates and remortgage dates not aligning can be another blocker to broaching GI. But again, it doesn’t need to be. Look for providers that offer long quote validity, and it can overcome this hurdle. 

Finally, we understand that, sometimes, advisers simply don’t have the time or appetite to speak to their remortgage (or any) clients about GI. In these instances, referring clients to a trusted partner means they can still access quality insurance, with the option of expert advice, and advisers can still earn commission. 

Our Adviser Survey also revealed, however, that current overall awareness of the benefits of referral is relatively low – despite existing referral statistics demonstrating high conversion and positive customer experience.

So, for those advisers where remortgage clients might remain challenging for GI, I’d strongly encourage them to explore referral options available to them. 

As cheaper deals become more viable, a ‘price war’ has broken out between the larger lenders to attract the significant pent-up demand in the home buying market. We’re now seeing sub-4% deals available among the major banks, with new offers frequently emerging that dethrone the ‘cheapest’ deal. 

Even before the rate cut, property transactions had been increasing significantly as market conditions improved, intensifying the pressure of larger banks to compete. 

The benefits of the rate cut extend to those refinancing, such as those exiting two-year deals, even if rates are higher now than when they originally fixed. Further drops in rates, more competition, and greater choice mean market conditions are better than a few months ago when they may have originally been looking to renew.

Additionally, the price war is leading to firms reducing their fees and offering cashback incentives, making it increasingly a buyers’ market. 

More capacity and a tailored lending approach 

While these lower rates are good news for those looking to purchase property, customers are often demanding greater levels of local expertise and specialisation. 

That is certainly the case with Nomo’s customers – potential buyers from the Gulf are seeking an easily accessible, flexible, and personalised experience. These customers require experts in their market, who can open up new opportunities to connect with brokers who may not have worked with those from the Gulf previously. 

Therefore, it is no surprise that in July, Nomo saw its highest levels of completions since we launched. 

Offering a flexible and personalised experience is harder for major banks to offer, while continually driving down prices. Though they benefit from economies of scale, this can also lead to rigidity in operations, meaning a more tailored experience is difficult to offer. 

On the other hand, specialist lenders can be more flexible and responsive to market demands, allowing them to capitalise on niche opportunities and customer segments that larger banks may overlook.

It will also help smaller providers that intermediary confidence has been rising, benefitting those who rely on these channels. Amid a price war, competition for consumers’ attention will become more intense. A strong network of intermediaries and brokers who can link prospective customers with a provider that is suited to their needs will set it apart from the larger banks. 

In this climate, it is more important than ever for smaller providers to maintain solid, collaborative relationships with their network of intermediaries. 

Relentless focus on the bottom line by big banks means the needs of customers can be lost. Customers increasingly want financial products tailored to them, so the benefits of focusing on a small customer base will endure. 

As a body that has focused a significant number of resources on seeking to improve the home buying and selling process, we often hear arguments put forward about keeping the status quo, and that “it’s not as bad as you make out” or “it’s the same in most countries around the world”. 

A world-beating wait for buyers and sellers

A recent study by Moverly, I think, puts paid to those arguments, as it analysed the average time to sell a home in 12 countries, and the results revealed that a) the UK is at the wrong end of the scale, and b) it’s most definitely not the same in other countries around the world.

The top-line results reveal the UK ranks as the slowest among all the nations looked at, and again it won’t need me to tell you that there are some profound economic implications for all stakeholders involved, not least in the time it takes to get paid for the work carried out, but also in terms of the cost to the consumer, not just in pounds and pence, but also in terms of the time and resources they have to expend in trying to get to the finish line.

The data from Moverly reveals that, on average, it takes 179 days from listing to completion in the UK, which is 25-and-a-half weeks, close to six-and-a-half months. In other words, properties being listed at the tail end of August will, on average, not complete until the end of February/start of March 2025.

That is one lengthy pipeline that can’t be good for anybody involved in the process.

To make matters seem even worse, 179 days here is a staggering 126 days longer than the US, where the process takes just 53 days. I understand they have a totally different legal system to the UK, but our timeline is a whopping 70% longer than the US, which can’t be acceptable and emphasises the urgency for reform. 

Other nations with more efficient processes include the UAE (70 days), New Zealand (72 days), Canada (90 days), and Australia (95 days). In contrast, countries closer to the UK in terms of timeline include Italy (159 days) and Spain, Portugal, and Singapore (all at 152 days), with Germany (137 days) and France (105 days) also lagging behind the leaders but still far ahead of the UK. 

Using technology to execute housing transactions

As mentioned, and you will have seen and heard us talk repeatedly about the benefits of a more efficient process here; we have dedicated years to trying to address these inefficiencies.

And we continue to push the benefits and the initiatives we believe will modernise conveyancing through a digital transformation, while standardising the provision of upfront property information.

These measures have been proven to slash transaction times significantly by providing clarity and expediting decisions, plus they mean there is less time for anything to go wrong, for minds to be changed due to information only coming to light later on, and for transactions to be aborted – a constant thorn in the side of our property market and those of us who make our livings from it.

A faster exchange process will be better for all 

The economic benefits of such improvements are clear.

For mortgage advisers, reducing transaction times would not only increase the number of deals they can handle, but also improve their service quality, leading to higher client satisfaction and retention rates. Conveyancing firms stand to gain from lower operational costs and shorter case durations, which translate into higher throughput and profitability. 

Moreover, a streamlined property market would enhance liquidity, enabling quicker property turnovers and supporting economic stability, especially in turbulent times.

For the broader economy, this means increased housing market mobility, encouraging more robust labour market mobility as individuals can relocate more easily for employment. 

Our work at the Conveyancing Association (CA) has led to significant collaborations with technology providers and policymakers to push for essential legal reforms and encourage widespread adoption of digital tools. These tools and reforms are vital for reducing the bureaucratic overheads and the often unnecessary delays that currently plague our system. 

I urge all stakeholders in the property market – agents, advisers, conveyancers, lenders, and regulators – to support and continue to adopt these measures and solutions.

The potential to improve the UK property market is immense, and by aligning with more efficient global practices, we can transform our current system into one that is fit for today’s world. 

As we continue to press for improvements, the goal is clear: transform the UK property market into a more dynamic, efficient, and competitive landscape. This is not just about enhancing transaction speeds but also about creating a market that is responsive and robust, serving the needs of all participants effectively and efficiently.

Let’s work together to make this a reality, ensuring our market is no longer an outlier but a leader in property transaction efficiency. 

He is a bright man and a successful architect, but through rain, shine and everything in between, he was convinced that the mighty Villa would triumph. 

It wasn’t logical, but then people are not logical, and that is something that we as an industry need to bear in mind when we are speaking to customers and measuring outcomes.

Being emotionally tied to where you live 

Very few people buy a house. They buy a home, they buy family dinners in the kitchen, kick-arounds in the garden and walks to the local pub. 

Conversely, they don’t sell a house either – they let go of memories, they walk away from familiar routines and the knowledge that turning on the kitchen tap if someone is in the shower is a bad idea. For younger people, this change might be exciting, but as people age, the familiar becomes even more important. 

So, I read the recent article that suggests that people could unlock £498,000 by downsizing from a five-bed to a three-bed property with some scepticism. 

Are the figures correct? These are averages, so there will be some people who can do this, but whether they want to do this is entirely another matter. 

Moving with 10 years’ worth of possessions is different to moving with 50 years’ worth of memories and we know that there are not enough properties that are designed to support our ageing population in the areas they want to live in. 

Indeed, the House of Lords Select Committee on Public Service and Demographic Change has called on the government and builders to ensure that the housing needs of the older population are better prioritised and addressed. 

Downsizing is also not simply about money, as 23% of people told the Intergenerational Foundation said they can’t downsize as they are too attached to the area they live in. Older people are not only more likely to be active in their community but also derive security from being part of a community.

Make downsizing a reasonable, not forceful, option 

So, what is the answer?

Unfortunately, there isn’t one – or rather, there isn’t a simple one. Instead, as an industry, we need to consider how we put the customers at the heart of what we do and build a system that supports people as they make these choices. 

Whether it is building good referral pathways, growing a network of trusted contacts or having challenging conversations, advisers have the opportunity to help clients find the right option for their individual circumstances. 

There are also a range of later life lending products, from equity release and retirement interest-only (RIO) mortgages to later life mortgages to help older homeowners. 

Bob may wish to downsize, Alice may want to stay in the family home but help her son onto the property ladder, and Brian may want to sell up and move to France.

All of these are choices that can – and should – be supported, but it is time that we start accepting that there are nuances to this argument, rather than people who simply refused to downsize. 

Perhaps even more so, considering we have fewer than two months until a Budget statement that looks less likely to be positive with each and every day.

We should not underestimate just how thin the ‘confidence line’ – which Labour are going to have to tread with Rachel Reeves’ first Budget as Chancellor – is. There is a danger that going ‘too hard, too fast’ knocks too much stuffing out of the UK consumer, particularly in terms of whether now is the right time to be active in the mortgage and housing marketplace. 

A recuperating housing and mortgage market

And doubly so when we consider there have been a growing number of green shoots appearing in recent months, with the bank base rate (BBR) cut helping to push mortgage pricing down, making affordability and borrowing a little easier.

The latest Bank of England figures reveal a more positive picture as well. Mortgage approval numbers were at their highest in July since September 2022, with net borrowing of mortgage debt by individuals also increasing to its highest since November 2022, and the annual growth rate for net mortgage lending rising by 0.6% in July, following a similar rise in June. 

There is no denying the positive impact rate and pricing cuts have on a market, where many might have felt prior to this that the mortgage finance they required to get on the ladder or to move up it was either prohibitively expensive or simply out of reach.

And, therefore, the Labour Party has a job on its hands in our industry in that it should want to maintain activity and demand, while also meeting its supply-side commitments, and having to find extra taxation to fund the black hole in the public finances it says it inherited. 

Instilling confidence and stimulating activity 

Of course, it might seem like an obvious point to make here, but one way it can help bolster the coffers is by producing an environment where more housing transactions are taking place.

We’re all acutely aware of what a boon to the UK economy a very healthy, functioning number of house purchases/sales can deliver, not forgetting of course the tax take available via stamp duty. It would therefore make sense for the government to be very careful about putting a premature end to more of a feel-good factor that appears to be growing in our space. 

When you consider the next 12 months or so, we might have three, four, or perhaps even more, rate cuts, and coupled with the competitive need among lenders, this could bring rates down to beginning with a three, potentially a two.

We should certainly not underestimate the positivity a lower rate environment will continue to engender, particularly among first-time buyers, and specifically among those who are not fortunate enough to have a Bank of Mum and Dad to lean upon.

Recent figures from Savills suggest just how important that has been – it estimates that in 2023 alone, £9.4bn was gifted or loaned to help first-timers get on the ladder. This was no doubt boosted by the affordability issues many would-be first-time borrowers were having through that period, and the need to take parental money in order to either secure a large-enough deposit or meet affordability criteria. 

For many people who didn’t have this access, the mortgage market might have appeared off limits, but a growing number of high-loan-to-value (LTV) mortgage products, coupled with lower rates, should open up avenues for would-be buyers that were previously closed. 

However, much will depend on what the Budget holds. There are some commitments already made to first-timers – a ‘new’ guarantee scheme and more new homes, but stamp duty thresholds will return to previous levels next year, and it looks unlikely we’ll get a Help to Buy replacement. 

What we therefore continue to need are lenders active in the high-LTV space, and a continued pressure being brought to bear on pricing that will allow more first-timers to get on the ladder. Also, we need to be sharp on our messaging, particularly to those who might have been keen to buy in the last 12-18 months but, at that time, were put off by whatever reason. 

This is a different market, and a shifting one, and with no political banana skins thrown in our direction, we can continue to develop greater positivity and turn a growing confidence into more first-time buyer transactions.

Let’s see how Rachel Reeves treads this line come the end of October.

The sessions were created to offer an open and engaging space to discuss aspects of diversity and inclusion (D&I). 

To watch the video of the whole session and download the accompanying slides, visit: Lunch and Learn – Working In Mortgages 

Tehrani opened the discussion, saying: “Employee resource groups can play a very important role in promoting diversity and inclusion in firms of any size. An ERG is an employee-led network group that supports the DEI [diversity, equity and inclusion] initiative from the bottom up. Such groups have a rather different function to DEI councils, committees or working groups, which tend to be centrally run and chaired by a DEI manager. ERGs are formed and managed by whoever is interested in joining a particular group. These groups can add great value to an organisation by facilitating the sharing of ideas, initiating events and raising awareness of particular aspects of DEI. They can also encourage new people to join and stay with a business.” 

Kajal Pindoria, DE&I manager and Asian Professionals ERG member at Barclays Bank, said: “At Barclays, we have a wide variety of more than 12 ERGs catering for various needs and interests, such as our recently launched Latin and Hispanic group [and] our multicultural and faith groups. They are all employee-led. We have a number of co-chairs who lead the groups and a group of volunteers who support and run them. Throughout the month, we get together to discuss how we can raise awareness of various topics via cultural events or targeted conversations. We also have peer support groups [that] focus on areas such as neurodiversity and fertility, where our colleagues can go for support and comfort. 

“We welcome all backgrounds and ethnicities from across the business – our colleagues in our head office, but also across our nationwide branch network and contact centres. The aim is to keep talent in the organisation, facilitate coaching and mentoring, offer support and break down the obstacles to development via collaboration across the ERGs 

“The ERGs give people the opportunity to learn from each other and make the uncomfortable more comfortable. In a big organisation, we don’t always get the chance to have these types of conversations anywhere else, and in a hybrid work environment, it can be even harder to have valuable social interactions and discuss our challenges with like-minded people.

“Throughout my time in the bank, I have tapped in and out of three of our groups when I have needed to. I see them as safe spaces. In our Asian Professionals ERG, when I see someone who looks like me, it gives me confidence. If they are in a senior position, it galvanises my ambition to progress. The ERG also allows me to break through a lot of my cultural reservations. I was brought up in an environment where, as a woman, I was not allowed a voice. Working in DEI and taking part in Barclays ERGs has given me a cheeky confidence. I want to talk about my journey and what an ERG has helped me do. In the past I would have waited for permission to speak. Not any more.

“From a business perspective, ERGs can amplify and elaborate the diversity of thought each individual can bring to an organisation, promote cultural awareness and attract and retain talent in the organisation. I see ERGs as a type of employee benefit.” 

Cameron Rodwell, head of sales operations and LGBTQ+ staff network co-chair at Pepper Money, added: “Setting up an ERG in a smaller company is slightly different to a huge corporation. You have to gauge the level of interest in a particular area first, to ensure there are enough like-minded people wanting to get involved. Fortunately, when it came to forming PML+, Pepper Money’s first ERG, dedicated to LGBTQ+, the interest was there. 

“The launch pad for this ERG was a Pride event we held last year, which generated amazing engagement. Many people got involved with that event and it became apparent that they wanted more where that came from.

“Setting up an ERG takes one or two people with passion – and it also takes organisation. I would advise anyone setting up such a group to always start with endorsement from your executive committee and DEI committee. Having those structures in place that you can leverage is very beneficial. Start with establishing your aims and objectives, and keep checking back that your activities and events align with them. Do you want to cover peer support, community outreach, consulting with the business from a policy perspective? Every ERG will be different. For example, from an LGBTQ+ perspective, we benefit from a long heritage of campaigning for equal rights in the workplace, so there are lots of external resources we can leverage, such as Stonewall, which provides material directly to people wanting to start networks. Other groups may need to create more of their own resources. 

“Once you have identified people who want to be involved, get them engaged. Then it makes sense to be very democratic – as a small organisation, we can keep things quite informal and avoid too much hierarchy and bureaucracy. Momentum is important, so create a name and a logo, get comms out to the business and plan 12 months ahead. As the first ERG in a small business, it is all too easy to lose steam, which you really don’t want, so do a lot of planning. 

“At Pepper, we have definitely seen the benefits of our ERG already. It genuinely promotes an inclusive workplace. One of the challenges most companies face from a DEI perspective is that it’s top-down [and] committee-led. ERGs help create a DEI ecosystem, bring people in and give them agency. I do a lot of recruiting, and in 2024, the number-one question I get from candidates is about DEI or ESG more broadly. So ERGs are extremely valuable for attracting and retaining talent.” 

Forde concluded: “It has been great to see the LBGTQ+ group thrive, and we’re looking forward to launching our second ERG at Pepper, this one focused on neurodiversity. That will include not just those who identify as neurodivergent within Pepper, but colleagues with children who are neurodivergent and also a wider group of allies. Hopefully we’ll see a third ERG before the end of the year. It is clear that these groups play a very important role in really engaging colleagues with DEI, promoting inclusivity and making our businesses more attractive and successful places to work.” 

The Financial Conduct Authority’s (FCA’s) latest Financial Lives Survey revealed that people have been prioritising mortgage or rent payments over other expenses. Utility bills were the most commonly missed payments over the six months to January 2024, followed by credit card bills and council tax. 

This comes as over one in three (36%) reportedly saw their mortgage payments increase in the past 12 months. There has also been a jump in the proportion of mortgage holders who asked their provider to reduce their monthly payments or provide a payment holiday, rising from 0.4% in the six months to January 2023 to 1.6% in the 12 months to January 2024. 

Mortgage brokers helping people keep their homes 

People understandably tend to prioritise mortgage payments to avoid the risk of losing their home. Yet some may not realise that missing other regular payments could negatively impact their credit profile.

When they next look to move or remortgage, these customers can no longer meet standard high street lending criteria and may struggle to find alternatives without using a broker.

Mortgage brokers play a crucial role in guiding customers with adverse circumstances towards mortgages that meet their needs without overstretching them. Brokers can help by thoroughly assessing customers’ financial situations and priorities for their mortgage to help them to find the most suitable lender and products.

They can clearly explain the alternative options available to people who cannot access high street mortgages in terms that they can easily understand.

Advising across the market 

Working closely with specialist lenders can also help brokers to navigate market complexity and provide the right support for customers’ specific circumstances.

Specialist lenders provide flexible criteria and consider a wider range of factors than traditional providers, enabling them to offer solutions that address unique customer circumstances and make mortgages accessible to a broader spectrum of people. 

Kensington’s Resi 6 and Resi 12 products, for example, are designed for borrowers who have experienced a credit blip over six or 12 months ago respectively. Both offer Kensington’s new Step Down option, which provides a lower rate for the last three years of a five-year fixed term.

In addition, successfully managing a mortgage, which could be made easier with specialist products, can help adverse customers to improve their credit score, enabling them to access more options in the future. 

The new group of adverse customers being created by the rising cost of living are likely to require a specialist mortgage when they decide to buy, move, or remortgage, as well as knowledgeable, empathetic, and engaged brokers to help them to navigate this unfamiliar market.

By working with specialist lenders, brokers can grow their business by diversifying into this area of the market while delivering exceptional support to their customers and helping them to find the right mortgage for their circumstances. 

This has resulted in an uptick in the number of people falling into arrears or experiencing credit defaults as they struggled to navigate the higher-interest-rate environment.

According to recent figures from the Bank of England, mortgage arrears rose 4.2% to £21.3bn in the first three months of 2024. This figure is 44.5% higher than the same period 12 months prior and is the highest total amount of arrears recorded since 2014. 

Readjusting to a new normal

With interest rate stability now starting to return to the mortgage market, helping borrowers with credit issues and complex circumstances is high on the agenda. Many of these customers are underserved by mainstream lenders, whose blanket approach to underwriting often results in many of them being turned away for borrowing.

Yet in some of these cases, the customer’s credit default or missed payment can often be a temporary or one-off event. This can be caused by a number of reasons, including a change in employment or personal circumstances or from trying to readjust their finances to the new norm of higher living costs.

A diverse product range supported by individual underwriting 

The flexible lending criteria on our Versatility range means we can cater to borrowers with complex circumstances. This includes unusual property types, historical credit blips or irregular income streams.

Those with more severe or recent credit problems can also be catered for via our Credit Repair mortgage range. 

Helping these borrowers by digging deeper into their credit profile and finding out why they may have missed a payment can prove to be a much more sympathetic approach than simply turning them away. This is why we individually underwrite all our applications because it gives us a better understanding of the client’s circumstances.

Taking an individual approach for these borrowers also helps brokers as it enables them to talk through the case with our underwriters and secure the best deal for their client. Not only will this help make their clients’ finances more manageable, it will also allow them to get their credit rating back on track.

Accommodating criteria comparable with specialist lenders 

The ongoing strain on household budgets due to higher living costs means many borrowers continue to face affordability challenges. There is a growing need for lenders to adopt a more compassionate approach to help borrowers navigate these financial difficulties.

Brokers unfamiliar with how complex credit mortgages work should ensure they seek support from a lender familiar with this area of the market, and a regional building society like ourselves can offer accommodating criteria as much as many specialist lenders. 

With the economy now showing greater signs of stability, seeking out solutions to help these clients address the challenges they are facing is crucial.