Mortgage advisers must proactively target consumers and profile-raise to engage with unconfident consumers to explain loosening product criteria has opened up the market for those with lower deposits and less-than-perfect credit records, they said.
Research showed 3.4m borrowers plan to apply for a mortgage in the next 12 months, including 1.3 home buyers and 1.6m prospective remortgagors. However, despite the fact 81% of borrowers are keen to go to one place to get a mortgage instead of trawling the market, just 44% said they would approach a broker first.
In a bid to profile-raisefor the advice sector, director of the Association of Mortgage Intermediaries (AMI) Robert Sinclair and Ben Thompson, director of mortgages at L&G did a promotional tour of the national and trade media last week, asserting the time is right for brokers to fill the information gap for consumers.
L&G’s Thompson, said: “It’s clear borrowers would benefit from professional, impartial advice that will potentially open up a lot more financing options for them and brokers have a golden opportunity to tap into this part of the market.”
AMI’s Sinclair said: “Brokers need to educate the consumer and be more proactive if they are to turn this latent demand into new business. The mortgage market isn’t suddenly going to spring back to pre-downturn levels, so it’s up to brokers to make the most of the opportunities out there.”
Thompson said the “time was right” to push quality advice to release the pent-up demand, which research suggested would create a market break soon.
“There’s no certainty about the return from an advertising campaign, so we thought we’d take the fight initially down the PR route. We’ve talked to the broadsheets, red tops and free London papers and enlisted the Halifax research that showed how frustrated young renters are just sitting on their hands instead of trying the market,” said Thompson.
Brokers could use the research to create a similar momentum at a local level, he added.
Sinclair said the media has played its part in dispiriting potential borrowers into thinking a mortgage is impossible to get without an 80% deposit. But added, that competition from the smaller lenders should bring even better products this year.
“When the CML revised its lending figures up from £130 to £140bn you have to wonder where it expects the extra lending to come from. It will know a number of smaller lenders are readying to travel higher up the LTV and risk curve this year,” he added.
AMI and L&G said they hope this is just the first step in a longer term campaign to push the value of advice to consumers.
Sally Laker, managing director of network, Mortgage Intelligence said: “It’s simple as the fact a broker is more likely to be able to place a deal in the current market than a high street bank. Advisers will have their fingers on the pulse of daily and weekly criteria changes and have the knowledge to encourage their clients towards a deal because of that.”
