The move comes after Jeremy Duncombe, speaking at the Mortgage and Protection Roadshow hosted by the Society of Mortgage Professionals, advised brokers that it was important they did not shy away from speaking about Brexit, and the potential implications it may have on the market.
However, this caused a debate among brokers with many saying they were unsure how to include Brexit in their conversations and what exactly they should be telling their clients.
Phil Whitehouse, managing director of MCI Mortgage Club, has provided his brokers with the following advisory script on what they should say to clients in the current climate.
“As your mortgage broker, I am regulated by the FCA to give you advice and recommend a suitable product and solution for your specific intended property transaction. However, the uncertainty surrounding Brexit means there is considerable speculation about out how the UK leaving the EU might impact on the property market and prices. In this respect, I am not able to make any predictions on the likely effect of Brexit and I would suggest that you bear all factors in mind including the possible movements on interest rates and therefore affordability before you commit to any property transaction.”
Lee Travis, head of professional development at the Society of Mortgage Professionals, agreed that Brexit should form part of the general discussion brokers have with their clients but said it should not form a major part of the overall advice process.
While Travis said there was some credence in holding a Brexit discussion, he challenged the notion that the referendum vote had so far had any tangible impact on the market.
“The long-term effects of the referendum vote remain to be seen, however, it does not seem to have materially affected house prices one way or the other so far,” said Travis. “The key influences will remain supply and demand, not Brexit.”
Since June the market has remained resilient, despite the natural uncertainty, with the Council of Mortgage Lenders (CML) reporting mortgage advances were 2% higher in September than the same time last year.
Additionally, the CML’s estimation for gross mortgage lending in Q3, was up 11% on Q2 standing at £63.6bn.
Martin Reynolds, chief executive of SimplyBiz, said he wasn’t in favour of brokers being provided with a blanket advisory statement to recite to their clients.
“We still don’t know what Brexit means at this point so a script of some sort wouldn’t help. Mentioning it could help open up a general discussion about it but even then, each client’s view of the implications of Brexit vary.”
Reynolds said Brexit should be part of the discussion brokers were having as now, more than ever, clients needed to be given sensible and rational advice on property purchases but until the facts of Brexit were known to everyone, there was no value in pre-guessing them.
Travis said that the ambiguity around Brexit gave brokers a unique opportunity to talk to their clients, making sure the topic didn’t get ignored or become ‘the elephant in the room’.
He added: “Brexit at least offers another reason to re-engage with clients, if brokers haven’t done so already, to provide the reassurance they require in this time of uncertainty.”
