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Half a million more borrowers should be advised on product transfers – LMS

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  • 21/12/2018
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Half a million more borrowers should be advised on product transfers – LMS
Half a million homeowners are missing out on advice when completing product transfers than would be expected compared to the mortgage market average.

 

Analysis of industry data by LMS found that only 3% of mortgages were completed on an execution-only basis in the second quarter of 2018.

However, product transfer data released for the first time this year shows the rate being around 47% in this sector of the market.

Around 1,155,000 product transfers are expected to be completed in 2018 worth more than £150bn.

Of those, 610,000 worth around £80bn will be advised with the remainder non-advised.

The conveyancing provider said this represented an advice gap within the market where more than half a million customers could be missing-out.

 

About 510,000 too many

LMS chief executive Nick Chadbourne (pictured) noted that the research suggested over the course of the year, 545,000 borrowers were going to have undertaken an execution-only product transfer.

“If you compare that to the wider mortgage sales market, it appears to be about 510,000 too many,” he said.

“Ideally, we’d like to see more borrowers consulting brokers even if, on the surface, it doesn’t seem that much has changed since they secured their last mortgage.

While an execution-only product transfer might look like the easiest route to remortgage, it’s still worth seeking advice – it’s an opportunity for borrowers to consult a broker and search the market more fully.

“Even a 0.25% saving on a £150,000 mortgage could save borrowers a meaningful amount of money over the course of the deal,” he added.

 

Interest rate hike expected

LMS also revealed that expectations of a rise in interest rates have grown over the course of the year.

It noted that throughout 2017 an average of 56% of borrowers expected an interest rate rise in the next 12 months.

However, its data showed that had increased to 77% in 2018, leading more borrowers to fix their rate in an environment in of rising rates.

 

 

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