First published by Mortgage Solutions
Chinks of sunlight in terms of the relatively overcast current environment are worth holding onto and the longer we find ourselves in this situation, the more important they will become.
That’s because, when you read about a stabilisation in the remortgage market in the last couple of weeks, or you read that the Government is talking to industry bodies about a Help to Buy extension, stamp duty holidays or the construction sector going back to work, they show a way forward and some light at the end of the tunnel for a return to a more ‘normal’ market. That said, I’m relieved and impressed by the extent to which the broker market is responding to the current challenges.
The recent statistics released by a large conveyancing panel manager are interesting, pointing to an increase in remortgage completions, up 22% in the w/c 6th April when compared to the w/c 23rd March.
It reveals that many mortgage borrowers are not necessarily ‘waiting out’ this lockdown period when it comes to their remortgage requirements, and certainly provides advisers with a target to aim for, notably their existing clients who are coming to the end of existing deals in the next three to six months.
Other research suggests three-quarters of those who were planning a house move prior to the COVID-19 lockdown still want to move as soon as possible – which is positive news in itself – and there is likely to be even greater strength of feeling around wanting to remortgage. Especially given the upheaval of moving house isn’t the blocker.
That could mean a much larger pond of potential remortgage customers to fish in and it should mean that communicating with existing clients during this period takes on even greater importance.
We’ve certainly encouraged our member firms and advisers to look even more closely at those clients who might fit this scenario, because as we’re all aware this isn’t just a remortgage opportunity, but also a chance to review those clients’ current protection and GI, and offer experienced solutions.
There is a lot of talk in our market about taking clients on their ‘remortgage journey’ and it is perhaps not surprising when clients are worried about their economic outlook that they look to their big-ticket outgoings to see whether there are savings to be made.
Even with mortgage payment holidays having been taken, lenders have been clarifying they will not be stopping existing borrowers from product transfers, which clearly gives advisers an opportunity even if the eventual recommendation does turn out to be a remortgage. I also want to credit Lloyds Banking Group this week for doing their bit to get the market moving again with the repricing of remortgage and PT products.
The important point for advisers is of course to have a robust process in place when it comes to existing clients’ product end dates – many brokers clearly do have this but others perhaps not. There is bound to be a requirement for clarity from existing borrowers on what they can do in the months ahead, and we have supported our AR firms in making this process as simple as possible thanks to our systems. It’s not rocket science but we all like technology to make our lives simpler.
Let’s hope the various consumer confidence surveys are a signal of the remortgage market continuing to grow back over the coming weeks and that advisers are at the heart of it. Advisers have a hugely important part to play in the speedy recovery of this market.
Rob Clifford, Chief Executive of Stonebridge