Speaking on a webinar, Eloise Hall, interim head of national accounts at Kensington Mortgages, said that it had “seen more tracker and variable solutions being needed”, and that it was “on the very near horizon for us to launch into”.
“We’ve seen that from a mortgage perspective, trackers have increased from just four per cent of the market and now account for 25 per cent of the marketplace. So, responding to that need is absolutely what we’re doing and we’re supporting the market in that space.”
Tracker products have been growing in popularity, with one broker firm, Rose Capital Partners, reported that over a third of its clients in November opted for trackers. This is up from eight per cent in the prior month.
According to recent Moneyfacts figures, the average two-year fixed rate is 6.01 per cent, whilst a two-year tracker is 4.03 per cent.
Brokers across the board have reported higher interest in tracker and discounted tracker products as fixed rate pricing has continued to climb. They pointed to its flexibility and low or no early repayment charges as attractive features for certain clients.
However, brokers warned with further base rate rises likely that pricing could increase, and small print could catch out some borrowers.
Barclays merger going ahead
Hall continued that its merger with Barclays was going ahead and it was currently awaiting regulatory approval from the Financial Conduct Authority (FCA).
The merger was reported earlier this year, with Barclays acquiring the firm with funds associated with Blackstone Tactical Opportunities and Sixth Street.
She explained that the merger would allow Kensington “access to a very different funding line, which hopefully should give us some financial advantages”.
“You’ll still get what you expect from Kensington, a specialist lender with excellent service and innovative products that we’re really excited to do a lot more of.”
Product transfer proposition will grow in importance next year
Hall added that the specialist lender had launched into the product transfer sector earlier this year, which she said was a “challenge for securitised lenders”.
“We were really pleased to make that step. Consumer duty is coming down the line and I think that’s going to be a really important part of future proofing a customer to make sure the lender has a product transfer proposition,” she explained.
Hall added that next year would be a very strong year for remortgage and product transfers so it was “definitely pleased to be supporting our broker partners with that proposition”.
Customer service team receive Samaritans training
Hall said that the firm had been “doing lots of work behind the scenes around supporting vulnerable customers”.
She explained that its customers service team had been working with the charity Samaritans and have received full training to better accommodate a wider range of customer needs.
According to a Kensington Mortgages spokesperson, the training course was delivered to 130 employees across servicing and lending including managers. It focused on six key areas: appreciate what active listening looks like in practice; develop their range of open questions to explore facts and feelings; react with empathy through their words and tone of voice; ask effective clarifying questions to ensure shared understanding and summarise and conclude conversations effectively and sensitively.
“We know next year we’ll have challenges. We know that the Bank of England base rate is potentially going to change next year, and energy prices kept changing, so there is likely going to be more financial pressures.
“So, we want to do what we can to better support those customers that are coming to us that are in need.”
Hall said that the firm was going to change its application process next year, and that would have a new option to engage with the lender to inform them about any vulnerabilities that customers may have.
“That can be very different from customer to customer, but we really do encourage you to engage with us so we can better support them going forward.
“We really want to encourage the right attitudes and behaviours and we really do appreciate your support and engagement on that.”
The spokesperson said that the feedback received from employees was really positive and that the firm would “continue to work with the Samaritans in raising awareness and building a relationship that not only benefits our customers but our employees as well”.
