The days of advisers being order takers is long gone

2023 was always going to be an ‘interesting’ year for all areas of the mortgage market following the turbulence of an Autumn period which sent many potential homebuying and remortgage plans into chaos as rates rose sharply and further affordability adjustments came into play.

We entered 2023 with widespread expectations of a lull in residential purchase activity, although from where we were in October, this was hardly surprising and the return to relative stability was testament to the robust nature and resilience of the UK housing and mortgage markets.

Although that’s not to say business levels have dried up across the board, they haven’t. Increased competition and criteria tweaks are generating opportunities within the remortgage market and some of the more specialist lending sectors to meet shifting needs of FTBs, existing homeowners, landlords and a range of property professionals across the UK.

These criteria changes were evident in Knowledge Bank’s monthly criteria index which revealed a shake-up in the most popular searches performed by brokers in January 2023. In the residential category, the search for ‘missed or late payments’ shot up the ranking of the top five most common searches to second place. Another change was the search for ‘interest-only’ which entered the top five to suggest that borrowers were looking for ways to keep monthly payments as low as possible.

The buy-to-let sector saw the top two searches for ‘lending to limited companies’ and ‘first-time landlords’ retain their places for the second month in a row. However, the search for lenders requiring the ‘borrower to be a homeowner’ rose to the third spot and the search for ‘interest-only/part-and-part single applicant’ re-entered the top five after dropping out last month.

The most popular search in the second charge category was for ‘maximum LTV’ once again followed closely by the ‘minimum loan amount allowed’ and the ‘maximum age at the end of the term’. However, entering the top five searches in January was the search for ‘unregulated buy-to-let’ which demonstrated an appetite from borrowers to use secured loans for commercial buy-to-let premises.

To round this off, bridging and commercial loan searches also saw a January shake up with ‘regulated bridging’ the most popular search in the bridging sector followed closely by ‘minimum loan amount’ and ‘maximum LTV’ taking up the top three spots.

It felt important to highlight all the elements of this research because it helps demonstrate how multi-faceted the current advice process has to be. We are way, way past the time where the biggest decision facing new buyers or existing homeowners was to decide between a two- or five-year fixed rate.

I appreciate that I am greatly simplifying this but the days of advisers being order takers is also long gone. I don’t mean this to be a disparaging comment in any way, shape or form. In a low interest rate environment, more often than not, the best option was some kind of fixed rate deal for the vast majority of borrowers. It worked and it was a relatively simple process for advisers which was a good thing as business volumes were off the charts for a while.

However, with interest and mortgage rates higher, personal and economic circumstances still uncertain, increasingly complex income scenarios emerging and housing/rental aspirations changing, we are operating in a far more complex time from an advisory capacity. And it’s a period where good, professional advisers will shine and why we are seeing the value of a more holistic advice process rise so rapidly.

It’s also a situation where advisers will need greater support in the specialist markets from packagers, networks and mortgage clubs to deliver an all-encompassing service to match these ever-evolving client needs. All of which continues to make the intermediary mortgage market an even more vital piece of the wider economic puzzle.