How we silenced the rate noise paralysing buyers – Pierson

House prices are stable, it’s still a buyer’s market and mortgage affordability has improved vastly in the last 12 months.

But from Joe Public’s perspective, multiple messages flying around the news encourage a wait-and-see attitude instead of seizing the opportunity to reserve their dream home. And given that most new builds are still under construction when borrowers get their mortgage offer, it could be at least another six months before they complete. Who knows where rates will be then?

You can hear the internal conflict loud and clear:

“Are rates going to fall soon? Perhaps I should wait one more month.”

“Inflation dropped back to 3% and headlines suggest a March or April base rate cut looks likely. Perhaps I’ll wait until May before I start looking.”

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“But it wasn’t long ago that rates went up, the economy isn’t in great shape and the government is all over the place. I’ll wait and see how this plays out. I’d hate to miss out on a cheap deal.”

We know the answer, and waiting isn’t it.

Things change all the time

The movement we’ve seen in rates – up or down – is marginal. But fluctuations, and the headlines they drive, knock buyers’ confidence. They hesitate, they wobble and ultimately decide to put off moving, for now at least.

So it’s up to us to build that confidence back up, inject a dose of reality into the anxious narrative and foster trust to lead them to their new front door. For that, we made an investment.

We started using the Mortgage Metrics rate-checking system to track a customer’s rate from the day it is booked right up to completion, alerting us if a cheaper rate becomes available.

For the customer, there’s peace of mind that the rate they complete on will never be higher than the rate agreed at the outset. It may even be cheaper.

And for us? We’re seeing more borrowers with the confidence to commit, even with the noise around a possible base rate cut in the spring or summer. It’s given us the opportunity to build stronger relationships by staying in contact while their home is built and keeping them informed of cheaper deals. It shows we’re willing to go the extra mile – and that’s already led to referrals.

But for it to work, borrowers must be crystal clear on the rules.

To secure a new, cheaper rate at any point in their homebuying journey, they must be as mortgage fit on day 150 as they were on day one, in case they need to be re-underwritten or require an offer extension.

And that nugget of information is something we may not spell out clearly enough. We often assume borrowers know to protect their credit score and avoid taking on more debt before completion. When we explain it, it comes as a shock.

We see this as one more reason to speak to our customers; conversations about rates, new deals and a check-in chat to steer them clear of that car on finance or furniture on a credit card, however tempting.

It was certainly an investment worth making.