30 May 2022

Brokers: act now or get left behind

By Jonathan Stinton, Head of Intermediary Relationships, Coventry for intermediaries

The remainder of 2022 will be just as busy for the mortgage market as 2021. Rising interest rates and the cost of living squeeze have pushed many borrowers to consider remortgaging and with billions of pounds worth of mortgages set to mature, brokers have the perfect opportunity to step up and help new and existing customers fix rates for the future.

But despite this, brokers still face many threats. Even though we’re seemingly emerging from the pandemic, the expectation of doing business digitally remains. Brokers need to find ways to engage increasingly tech-savvy customers, including a new cohort of first-time buyers who have grown up in the digital world, so keeping proactive is vital for brokers if they want to remain borrowers’ go-to-choice. But what steps can they take to seize the new opportunities of a remortgaging boom and keep ahead of the competition?

Adapting to changing customer habits

The COVID-19 outbreak forced the mortgage market to rapidly digitise. Today many borrowers can product transfer at the click of a button, and that may be best for some, but for others it could mean missing out on finding the most fitting product for their needs and circumstances. This is where brokers can play a critical role, providing clients with a wider view of the market and helping them find a better deal. Yet, many borrowers remain unaware of the support brokers can provide.

Brokers need to maximise every opportunity to market their services to new and existing customers, and they have numerous tools at their disposal. This includes social media and newsletters to remind clients and notify new audiences about their expertise. For example, through platforms like Instagram, brokers can build a presence with younger customers.

Keeping up with evolving market trends

It is anticipated that £254 billion[1] of residential and Buy to Let mortgages are set to mature in 2022. As such, many borrowers will be remortgaging in dramatically different circumstances, given COVID-induced challenges, rising living costs and ever-increasing interest rates.

Brokers can help customers manage these pressures by finding fixed rate deals that will lock down their mortgage rate. However, to better their chances of helping clients, brokers need to stay updated on the latest deals in this fast-changing sector.

Proactivity is key and time is of the essence. Brokers must engage with customers now – in a rising interest rate market  borrowers are already prompted to remortgage well before their fixed rate term ends. If brokers provide support and expertise imminently, clients are less likely to look elsewhere or end up on a lender’s SVR.

Optimise new developments

When contacting and providing support to borrowers, brokers should also keep in mind new market trends. One such trend is the consumer-driven demand for sustainable solutions in the mortgage market. More homeowners are now choosing to ‘improve, not move’, and brokers can respond by signposting green mortgages and initiatives, such as Coventry’s Green Together Reward, which offers eligible clients £500 in return for carrying out qualifying work that aims to improve their property's energy efficiency.

Climate-conscious consumers and cost of living pressures both give brokers a chance to step up and support customers. However, brokers must be prepared and proactive to beat the competition and become the go-to for customers in today’s mortgage market.

[1] Expected Maturities from CACI Ltd.’s Mortgage

Market Database for Residential and BTL, as at November 2021

 

For adviser use only. Please note this content has been supplied by our lender partner and as such, is their responsibility. No party shall have any right of action against Legal & General in relation to the accuracy or completeness of the information in this article.