Comment: Keep working together | Mortgage strategy


After a frenetic year that consistently exceeded expectations, it’s invigorating to look at 2022 with fresh eyes and assess what the market should be preparing for in the months ahead.

Last year was characterized by a surge in sales fueled by the stamp duty holiday and second home buyers. Naturally, this has led to a lot of speculation about how 2022 will play out.

The market needs continued attention from government and industry to help people access more affordable, high-quality housing

With inflationary pressures and the prospect of further rate hikes shaking business and consumer confidence, last year’s good weather could give way to darker clouds. However, mortgage rates remain attractive, and with many deals set to expire this year, borrowers may take this opportunity to remortgage or decide it’s time to move.

Human Connections vs. Going Digital

From recent conversations, it has been inspiring to see a growing number of brokers and lenders realizing the enormous potential of technology. The pace of change is finally accelerating, with the impact of the pandemic certainly contributing to this change online. Digital and accessible mortgage processes are no longer a benefit, but a vital necessity to reduce operational costs and eliminate paper-intensive processes.

Rate hikes could boost demand from first-time buyers

Of course, leveraging technology is key to streamlining the mortgage research journey, but digital tools will never quite replicate the human element of a business development manager (BDM). Lenders should continue to nurture this role.

Whether helping intermediaries to understand criteria and new products or guiding them in a lending policy, BDMs represent an essential link in the chain. Phone support has been a lifeline for advisors over the past couple of years and while online information and live chat facilities are a welcome resource, advisors are often keen to explore the nuances verbally. of a case.

New pricing environment

This year could also be the first in some time in which we have had to navigate a higher rate climate. This presents a different challenge for the advisor community. They will have to adapt and help borrowers to conclude agreements that are well aligned with their financial needs.

Last year we witnessed the unwavering resilience of the mortgage market

Possible further rate hikes could spur inquiries from first-time buyers or those considering remortgages. January was another good month for product deadlines and things could start to pick up speed.

As we move into an environment where rising rates become more common, brokers and clients should be given sufficient notice before a product is withdrawn to manage workloads and expectations. Some lenders give little notice, which causes a problem for advisors who have to speed up their efforts to complete submissions.

On top of that, this last-minute rush can have an operational impact on lenders, as they are more likely to receive incomplete quotes.

It has been inspiring to see a growing number of brokers and lenders realizing the enormous potential of technology.

The reason for such short notice often stems from lenders trying to avoid a spike in business, which in a rising rate environment could be a concern. For example, if a product is competitive, a lender may receive more than double typical volumes. This can create a ripple effect on service when the lender is under pressure.

However, the question remains: how do lenders who give reasonable notice still cope? Most advisors I talk to would appreciate more consistency and longer timelines.

Mismatch of supply and demand

A recurring theme of recent years continues to be the significant housing shortage. In fact, in an article examining the housing market in 2021 and the outlook for 2022, research firm Residential Analysts said the supply situation was “serious”, with Rightmove, Zoopla and the Royal Institution for Chartered Surveyors pointing out all low levels of stock for sale.

Brokers and clients must be given sufficient notice before a product is withdrawn

Their findings illustrate why the market needs continued attention from government and industry to help people access more affordable, high-quality housing. We have already seen the House of Lords Built Environment Committee call for barriers to house building to be removed, and we must continue to push for continued support if we are to avoid many buyers being left out altogether. of the market.

Last year, we witnessed the unwavering resilience of the mortgage market. To be successful in 2022, lenders must continue to work with advisors to help borrowers find the best products, even if the market hits a few bumps along the way.

Kevin Roberts is director of the Legal & General Mortgage Club

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