As 2023 draws to a close, it’s a useful time for reflection on what brokers have described as a “chaotic” and “challenging” 12 months.

Among the big takeaways from the year for intermediaries was the importance of delivering a customer-centric service, the ability to actually broker deals rather than have business ‘fall on your lap’, and why focusing on retention is crucial.

Brokers focusing on clients

Ken James, director at Contractor Mortgage Services, said that it had been a “challenging year, to put it politely”, with the secret to success being customer centric.

He continued: “Keeping the client at the centre of all you do has looked a lot different this year; keeping them up to date on rate changes, acting swiftly to secure the best rates and reacting and adjusting when deals shift downwards have been a constant this last year.”

James added that with many brokers “starting to feel burnt out”, a recharge over the festive period would be necessary. 

Sponsored

Welcome to the future: how collaboration is driving the shift to digital home buying

Sponsored by Halifax Intermediaries

Michelle Lawson, director of Lawson Financial, said that the big lesson from the year was to continue to expect the unexpected.

She said that it had been a “tumultuous few years” in the industry, which had seen “processes tested to their limits”, with the hope that a calmer 2024 is in prospect.

A question of retention

The downturn in the market during the early part of the year had served as a reminder of how important client retention is, suggested Jane King, mortgage broker at Ash Ridge Private Finance.

“Remortgage and product transfer business became more and more important to income during this very quiet period,” she added.

King said that it had been surprising how quickly rates were reduced once they started to come down, arguing that drops of up to 0.70 per cent by some lenders “was very unexpected”.

After nearly a year of base rate rises, 2023 has been a year of “enlightening clients” about the reality that interest rates are unlikely to return to the one or two per cent range, argued Adam Smith, founder of Alfa Mortgages.

He continued: “If there is a lasting impression, it is the era of elevated interest rates and heightened inflation.”

 

Back to broker basics

David White, chief operations officer at Simply Lending, suggested many advice firms “didn’t realise they were playing in ‘easy mode’ until we saw the rate increases of 2023”.

He welcomed the fact that the market is so competitive, with clients choosing to “scrutinise deals and shop around far more”.

Sebastian Riemann, director of Virtus Private Finance, said the year had felt “like a bit of a shift to real broking again”, suggesting that in recent years business has been “falling on our lap”.

He argued that his firm has been able to spend more time with clients, resulting in a broader advice offering.

He continued: “Overall I have felt that this year has been one of adjustment but with this have come immense opportunities. It also lays a fantastic foundation for the future especially our client relationships and whilst the property markets have been somewhat subdued we have also witnessed a slight uptick in first time buyer enquiries.”

Martin Stewart , director of London Money, said most brokers were happy to get to the end of the year “without further catastrophe”.

He continued: “The numbers are down, as they are for virtually everyone, but there is still business, and where there is business there is hope.”

Craig Fish, director of Lodestone Mortgages & Protection, said that as well as expecting the unexpected, the big lesson from 2023 has been the importance of social media.

He continued: “As the year started things looked positive, but as interest rates rose, along with inflation, the outlook seemed very bleak. People turned to social media for help, and as advisers we had to adapt, and be where ‘the people’ were.”

 

The importance of brokers

According to Fish, the legacy of 2023 is that independent advice is of paramount importance.

“The mortgage landscape is changing and ‘real’ advice is being sought, people want more than just an off-the-shelf solution. For brokers to succeed in the future they need to have a complete understanding of the UK economy, and not just the difference between mortgage rates,” he explained.

This was echoed by Denni Tyson, mortgage broker at Henchurch Lane Financial Services, who argued that this “chaotic year” has highlighted the importance of brokers and their ability to navigate a complicated market.

King argued that the legacy of 2023 will be the importance of brokers having their own client banks, without having to rely too much on leads from third parties over which they have little control.

She continued: “Brokers that did not have their own client bank must have found it particularly tough this year and without my own 20-year client bank to focus on I may well have had second thoughts about staying in the industry.”

Stewart said that the legacy from this year is that brokers don’t need “a pool table in your office, converse trainers on your feet nor a stupid name above the door to be a successful mortgage broker. You simply need a good client bank, good lending partners and some very thick skin.”