Brokers told Mortgage Solutions that while the market had changed ‒ and could mean a difficult year for some advisers ‒ it had also reinforced the value of good advice.
Some firms also confirmed they had adapted the size and structure of their firms in order to build the best foundation ahead of market stabilisation.
Chaos creating broker opportunity
Richard Campo, founder at Rose Capital Partners, said with mortgage pricing in the news every day, it has never been easier to attract clients.
He explained: “This is an open door to build and strengthen relationships with your clients and introducers. As things are changing so quickly, we find fast, clear communication is imperative right now, so that is only ‘change’ in that we are sharpening up our messaging and working more closely with your introducers than ever before.”
This was echoed by Rhys Schofield, director of Peak Mortgages and Protection, who said that a chaotic housing market creates more reasons for potential clients to talk to brokers.
“Our strategy just has to be to make it obvious that we’re the people to talk to in both the good times and the bad. Yes, it sucks delivering bad news, but would-be clients need you now more than ever,” he continued.
Standing out from the crowd
Neezam Romjon, co-founder of Rebus Financial Services, said that his firm was looking for ways to stand out as the “adviser of choice” for first-time buyers.
“We are doing this by regularly sharing relevant and helpful content through our social media channels, answering the questions we are asked the most from first-time buyers,” he added.
According to Greg Marcham, managing director of Yellow Brick Mortgages, current conditions mean that service has never been so important. As a result, even with the market challenges, brokers will succeed if they ensure the “service experienced by any client is at an exceptional level”.
Moving quickly
Justin Moy, managing director of EHF Mortgages, suggested the next 12-18 months will be a difficult time for most brokers, with a different mix of client types and applications.
He added that the bulk of monthly activity will continue to be product transfers or remortgages, with this becoming “quite a transactional environment, with debate about short versus long, fixed versus tracker, and decisions needing to be made quickly due to the way rates are moving so quickly”.
Adapting team sizes
Campo said that his firm had let staff go off the back of the mini-Budget “which means we are about as lean as we can be” for any challenges that may lie ahead.
“I always felt this was going to be a tough period so keeping things tight is my main focus,” he added.
Moy said he had elected to reduce the size of his team, in order to remove costs “at a time when our model is being challenged”.
He continued: “Advisers can handle most of their own admin needs at the moment, especially when most cases are product transfers, with fewer paperwork requirements. Streamlining will only help us in the long term, survival in the short term is paramount at the moment.”
However, Richard Dana, co-founder and CEO of Tembo Money, said that his firm is adding six new advisers from next week, as the business continues to grow.
He noted that the business’s focus on helping customers struggling with affordability meant that where its initial focus had mainly been on first-time buyers, it has now seen a growing number of remortgage customers needing this support.
Dana continued: “We actually have seen continued good demand from first time buyers. It’s not a bad time to buy – if you are looking for a medium term purchase and you are also able to negotiate a great price, with a significant discount to the asking price. There is much less demand from other buyers and customers will pass affordability at the increased interest rates.”
Time for education
Campo argued that the current situation offers a great opportunity for brokers to educate clients, to ensure they do not get caught up in the “hysteria” around rising rates.
He continued: “Invariably when we talk to clients at the end they say ‘oh, that isn’t as bad as I thought’, which largely justifies why we have always wanted to work with more affluent clients.”
Dana argued that a downturn offers a good potential opportunity for a start-up business, noting that his firm had made “great progress” working with strategic partners.
He continued: “We’ve been able to license our affordability technology to our partners to help them help their customers. We also have a good referral channel from mortgage brokers who do not want to spend time on JBSP or unaffordable cases, when they can be more productive focusing on core business instead.”
Don’t forget protection
Romjon added that the current situation had meant his team have focused their attention more on their clients’ protection needs.
“What we are starting to see is a trend of existing mortgage borrowers who are not suitably protected from their debt if they become ill and can’t work and/or if they have a joint mortgage and one of the borrowers dies before the mortgage debt is repaid.
“After the events of the past few years, we’re also finding that our clients are more interested in paying to protect themselves and their families, so they don’t risk their family home being repossessed.”
