Advisers must make the most of the 2023 remortgage opportunity

The numbers don’t lie. 2022 was – even with the Autumn madness of the Mini Budget – a very strong year for lending activity and, given the fact we did have that discombobulating six- to eight-week period, it perhaps tells you just how strong the rest of the year must have been.

Figures from IMLA reveal total gross lending of £310bn and you can add just over £180bn in product transfer (PT) activity as well. Of that £310bn, the lion’s share was for purchase (£188bn) but we also saw a very substantial £108.5bn in remortgage business.

And, the good news is that the intermediary sector was responsible for over 80% of that business, with IMLA suggesting this could rise to 90% by the end of 2024.

It would be tempting to say that the war has been won in terms of making the case for consumers using mortgage advisers every single time, but that’s simply not true and – certainly when it comes to remortgage/PT business – advisers will be fully aware of what they are still up against when it comes to a significant number of lenders continuing to tempt existing borrowers back, without necessarily pointing them in the direction of their original adviser.

That said, I suspect many consumers have already vowed never again seek to arrange their mortgage direct with their lender. Last year particularly will have been a chastening experience for many existing borrowers – specifically those who came to the end of the deals during the Autumn or were panicked beyond belief at what monthly payments they could be looking at in the future when they did come to remortgage.

A large number of existing borrowers would have up a certain creek without a certain paddle were it not for engaging with an adviser who was able to treat them with kid gloves, and walk them through their available options, including simply sitting tight and letting the market calm itself.

Thankfully it has done this, and while rates look like they still room to move down further, they do now resemble much more their pre-Mini Budget counterparts.

Which leads us to what comes next. Well, perhaps unsurprisingly, the anticipation is that both purchasing and remortgaging will not be able to match their levels in 2022. However, at the same time, there is room for manoeuvre here.

IMLA forecasts total lending will be £265bn, made up of £165bn in purchase and £88bn in remortgaging – both down by a fair amount - however it suggests PT business is only likely to be down by a small margin of £7bn to £175bn and here lies the potential for a remortgage market even more robust than some are predicting.

Again, according to IMLA, while PT business has been increasing since 2015, last year there was something of a reversal with remortgage levels rising and PT business falling back.

Now logically you might well argue that as more existing borrowers use the services of an adviser, the likelihood of them going down the PT route diminishes, given advisers are able to source from right across the market.

Therefore, while PTs might the only show in town for some borrowers, by using an adviser they will have far greater information on whether this is really the case, or they have more suitable options elsewhere via a remortgage.

It is a tricky one to fully see, because of the expectation that many more borrowers in 2023 may have no choice but to take a PT from their existing lender, due to affordability issues and the like, but what we can hope is that all of those customers coming to the end of their deals, are contacting advisers with their PT offers to look at what they already have access to, and what could be available via a remortgage.

Of course, with a buoyant remortgage market and advisers taking over 80% of it, other opportunities present themselves, not least the chance to reacquaint yourself with the client and any changed circumstances they might have, but also the option to take control of their remortgage conveyancing, secure legal representation for them not just the lender, and to have a greater element of control in the process. Not forgetting the extra income you can earn with every single remortgage case.

We’ll all be acutely aware of some of the difficulties that have been felt in terms of getting cases through to completion, particularly those of a free legals variety, so it’s up to advisers to make the most of, not just the remortgage opportunity, but to ensure they are giving their client the best chance of getting it through to completion on time.