Many buyers and sellers are holding off making big decisions until the UK has clarified its future relationship with the European Union.
In the three months to March 2016, house purchase approvals were 215,816. Since then, they have only broken through the 200,000 mark in four quarterly periods, according to figures from the Bank of England. In the latest quarter, ending June 2019, purchase approvals had risen slightly from 195,614 to 198,129.
In the meantime, remortgages have been big business.
In the three months to March 2016, remortgage approvals were 126,580 and despite intermittent slow quarters, they have gradually risen. For the latest quarter ending June 2019, there were 143,708 remortgage approvals.
But not all brokers are just looking to the remortgage opportunities on their doorstep.
Beyond remortgages
Some business owners are turning to protection sales, an often-neglected part of the mortgage process, to bolster their bottom lines.
Lea Karasavvas, managing director of Prolific Mortgage Finance, has hired experienced protection specialist Ria Wotherspoon. The firm’s strategy is to identify protection life cover and business protection sales within its own client bank.
Karasavvas said: “So far it has proved a huge success. While the downturn in the purchase market is apparent for all to see, it has allowed us time to focus on the other avenues of the business that were perhaps not receiving the attention they warranted. We have also unearthed opportunities that are compensating for the homebuying slowdown.”
Colin Payne, managing director of Chapelgate Private Finance, and Richard Campo, MD of Rose Capital Partners, have also hired specialists to improve the level of protection they are offering their clients.
Campo said splitting out the mortgage and protection sales roles, rather than asking one adviser to concentrate on both products, had improved sales rates.
Paul Yates, director of iPipeline, noted the rise in the volume of protection sales from mortgage brokers.
He said: “The mortgage market isn’t exactly quiet, but it isn’t as busy right now as it was in previous years. We’ve seen a clear increase in protection activity from mortgage broker firms who are also covering more needs in each sale, including critical illness and income protection, rather than just life cover.
“This is driven by better distribution processes and technology, but is also down to brokers having more time to deliver better advice.”
Payne has recently taken on one specialist but has ambitions to build a team of protection advisers.
“Less than 10 per cent of our mortgage clients were being protected before we brought in a specialist. That’s improved to around 50 per cent now,” he said.
Upskilling
Protection sales are not the only business stream intermediaries are exploring.
Stuart Gregory, managing director of Lentune Mortgage Consultancy, has recently qualified in equity release advice. He said being able to talk to borrowers about lifetime mortgages has opened up more opportunities as areas such as purchase buy-to-let have fallen quiet.
Gregory expects the equity release business to take around 18 months to take off.
While his new venture builds momentum, Gregory is lessening the impact of depressed mortgage sales by generating income from writing mortgage capability reports for solicitors acting for couples getting divorced, for example.
He also writes reports for developers who have offered shared equity deals on new-build properties. The report examines whether owner occupiers can afford to repay the shared equity debt by remortaging.
