How brokers can thrive in today’s volatile market
The volatile economy continues to significantly impact the mortgage market. Money & Credit statistics showed net mortgage lending to individuals decreased from £3.1 billion to £2.5 billion in January, and a number of experts are predicting house prices to fall up to 10% this year.
As such, the role of professional advice in supporting people navigating such a challenging market has never been more essential, and with a record number of mortgage products set to expire in the coming months, innovative brokers can ensure a steady stream of business throughout 2023 and beyond.
Consult your back book
While there has no doubt been a slowdown in the purchase market, brokers still face a busy time ahead if they explore the right revenue streams. According to ONS figures, almost six in 10 (57%) of UK mortgages will be up for renewal this year, with around 353,000 expiring in Q1 2023 alone.
ONS figures also revealed that, of the products due for renewal, more than three in five (62%) were initially fixed at less than 2%, and almost two fifths (37%) were between 2-2.5%. With the average two- and five-year fixed rates currently at 5.44% and 5.20% respectively, many borrowers are facing a substantial jump in their monthly payments.
But, while monthly payments are rising, many borrowers have seen a real-term pay cut as the inflation continues to soar. In these circumstances, the role of a broker cannot be overstated. Expert and frank advice from a qualified broker is essential to help borrowers understand the situation and secure the best deal for them.
Protection and diversity
In addition to helping borrowers secure the best possible remortgage product, brokers have the ability to further support clients who may be looking for additional financial support. Some may have seen a drop in income after choosing to retire, some may have experienced redundancy or chosen to reduce their hours, and it is likely that pretty much everyone has felt the impact of inflation outpacing wage growth. All of these factors are impacting borrowers’ financial circumstances, and many would benefit from financial advice around the protection products available to them.
To provide a holistic service to clients throughout the duration of their mortgage, and not just at the time of purchase, brokers should ensure regular contact with clients. Not only does this strengthen relationships and stand brokers in better stead when the time to remortgage comes, but by selling protection products or additional advice, brokers can generate an additional stream of income.
Diversifying revenue streams in this way is a good way of mitigating the current economic environment. For example, advising on equity release or new loan product categories such as commercial, bridging, or business loans are great for attracting new clients. Brokers should be reminded that their services do not need to be confined to mortgage applications alone and should seek to expand their services to retain a competitive edge.
Technology is key
Luckily, finova’s complete suite of software is available to support brokers in taking full advantage of all the various revenue streams without any additional work or admin. For example, having one broker CRM that can take multiple product lines easily within it, allowing brokers to manage all revenue streams in one place, can completely streamline processes.
Through finova’s technology brokers can also monitor their contact book and inform clients when their mortgage term is reaching its end. Even better, the platform can schedule and send these sorts of communications in a personalised way automatically, and notify them of the options available to reopen the conversation. Brokers can also store all relevant information within the system, such as family details or a client’s favourite football team, to help kick the relationship off from where it was left off, putting them in the best possible position when reaching out. This is especially helpful when upselling protection products or when making contact in the middle of a mortgage term.
In addition, finova Payment and Mortgage Services, finova’s tech-focused mortgage club, helps brokers make the most of the opportunities they secure. The club provides brokers with access to a large panel of mortgage and protection providers to ensure they can offer their client the service they need.
2023 is full of different opportunities and avenues for brokers to explore and expand their service offering. For those who do, they may just find that the skills they develop are beneficial in all market conditions, both today and in the future, and having the right tech in place from the start can only be a step in the right direction.
Find out how finova can help your business thrive through today’s challenging mortgage market, contact firstname.lastname@example.org