While the latest Bank of England statistics show that the proportion of lending for remortgage decreased by 3.3 % in Q2 compared to Q1, the value of that remortgage lending was £12.4bn an increase of 5% over this time last year and it looks set to increase significantly.
Lenders are already gearing up for this with an increasing number of very competitive fixed rates for remortgages. We are likely to see more and more of these over the next couple of months as lenders fight for new business, the question is, are brokers prepared for this or even aware of it happening?
The chances are that brokers will see an upturn in the number of people contacting them when their fixed rate ends and their payment increases and this is likely to continue to the end of 2014 and into the beginning of next year.
Recently most brokers have been more preoccupied with the rising number of purchase borrowers coming through the door to have had time to contact existing clients with remortgage needs.
However it is a dangerous strategy to wait for your clients to contact you as in the mean time you could lose your client to a competitor, the lender could contact your client first and do the business directly, or the client could contact you and then still look elsewhere for advice because you were not prepared with alternative best options for them.
It would probably be better, both for your business and to provide a better consumer outcome, for you to invest some time to investigate remortgage deals so that you can contact your client proactively.
Of course the challenge is how are brokers who are already maxed out going to have time to cope with an additional volume of remortgage business and have the time to prepare for it?
Maybe now is the time to take the plunge and recruit that extra person, or even an administrator to help you deal with increasing volumes. With consumer confidence at its highest for many years if you are going to expand now is the time to do it and it could present you with the opportunity to capitalise on what is clearly a growing market.
Toni Smith is sales operations director at First Complete
