With a number of lenders updating their rates, it really does feel as though Christmas has come early. Some lenders are even offering their lowest ever rates on products, which is fantastic news for consumers and brokers.
Following a recent product update that we sent to our network, we received a number of phone calls from brokers asking if we had made a mistake in the communication about the Halifax products at 2.99%. We hadn’t but the brokers couldn’t believe the lender was offering a rate that low.
That is a great feeling as a network. The climate is definitely changing and, alongside a stream of great new products, we are experiencing increasing proc fees, new lenders entering the market, and even that long forgotten species, the exclusive, is back.
So patience has paid off and we are entering a more exciting time for intermediaries right now. One thing the credit crunch has proved to the shareholders and boards of the larger lenders, is that if you are falling short on mortgage volumes there is only one channel that can deliver the volume needed and that is the intermediary channel. Branches in many quarters cannot deliver the service or the volume that intermediaries can and that’s all good news for us as brokers.
However, it doesn’t mean brokers can cut corners and post MMR it has certainly not decreased the time spent on the mortgage process. In addition to all of this, the regulatory focus has changed over the past few years and it is clear that the emphasis is very much on conduct risk and ensuring the customer’s needs have been fulfilled. Affordability is very much at the door of the intermediary, it is essential that client’s bank statements and their lifestyle are dissected sufficiently to advise on the correct mortgage product and give suitable advice. Failing to do this is a cost that no-one wants to pay, and so being vigilant in this area is key alongside keeping up to date on different lender criteria, which is of course all part of the job.
The big surprise this quarter has been the lack of uptake of remortgages. The time is right, the price is right and there is plenty of business there for the taking, yet the remortgage market simply has not taken off despite all the predictions that it should. My own view is that intermediaries are finding it hard to process all of the purchase business that is coming in with simply not enough time to go back to the existing client base to drum up a new stream of business. That is unfortunate because for the first time, intermediaries are on a level playing field with the lenders, whereas pre-MMR the process for the lender was quick and slick with a huge advantage over the intermediary, this advantage has now gone.
So, you could say things are definitely looking up for intermediaries and opportunities are there for the taking. The difficulty in recruiting good advisers is still a challenge and that is the stepping stone to building a business. Talking to some of our AR members, taking on administrators with the ability to progress to adviser status, has been a worthwhile investment and they are now reaping those benefits. It also means there is always another recruit in the wings so that the business can grow and also cover the unexpected event. A dedicated person for life insurance has also been a winner and some of our most successful firms feel that has transformed their businesses, and has duplicated that approach for General Insurance. Although it is smaller income on each case, it builds up to a substantial annual income when someone is specialising in that area.