Written by Gina Blagden, Head of Sales
The cost-of-living crisis is taking hold and millions of consumers are turning to credit cards to help them meet rising prices. Bank of England figures show that credit card borrowing rose at its fastest rate in 17 years in June and this is before the anticipated 80% increase in energy prices later in the year. Such is the rate of change that investment bank, Goldman Sachs, says that inflation could exceed 22% next year.
In this environment, it is inevitable that many customers will miss payments on their credit commitments and utility bills in the coming months. In fact, some groups are encouraging consumers to refuse to pay their energy bills altogether.
There’s little doubt that in the next year, you will encounter more clients with adverse credit on their credit file as well as a growing number who will take on additional sources of income in order to make ends meet. These customers are not always well served by the high street, so unless you have the ability to source the best deal for them from the specialist mortgage market, it’s unlikely that you will be best able to serve their needs.
The FCA’s Consumer Duty regulations will put greater emphasis on good outcomes for customers, so failing to offer an appropriate solution for the evolving circumstances of borrowers requiring a specialist lender could result in an unhappy regulator as well as an unhappy client.
The specialist market can be complex, with a large number of smaller lenders, many of which may offer exclusive products that are not available direct to brokers. So, now is the time to partner with an expert in this sector to ensure that you are best placed to help your clients through this challenging environment and deliver the best outcomes for their needs.
One impact of the economic environment that is impacting clients now is the pace at which lenders are pulling rates and re-pricing their mortgages. In this situation, it’s important that brokers act quickly to secure rates for their clients as stalling could prove costly. If you are working with clients who have accepted a rate but are dragging their feet, it’s worth reminding them of the importance of moving quickly, because once a rate has gone, it’s gone – and prices are increasing all of the time. This situation is another example of where it can be a great advantage to work with a specialist distributor like Brightstar. Our relationship with lenders means that we are often provided with dedicated underwriters and expedited service, which could make the difference in securing a good rate and missing out. Where deadlines have just been missed, we have also on some occasions been able to agree on an exception with a lender. This isn’t always the case, but there is a much better chance of doing so by negotiating through a specialist distributor like Brightstar than attempting to do so directly with a lender.
There is little you can do about rocketing costs, but there’s plenty you can do to prepare for the fallout. Pick up the phone and speak to Brightstar today.