It’s during times of challenge that the best businesses really come to the fore, adapt to the environment, deliver customers what they need and set themselves apart from the competition. With a stagnant property market and lenders snapping up remortgage business with product transfers, there’s little doubt that the life of a mortgage broker is certainly challenging at the moment.
So, what are you doing to take on the challenge and set your business apart from the competition?
A news story from cherry recently said that the most popular thread on the forum in June was on cases being declined by high street lenders as a result of historic adverse credit, with some comments saying they had applications declined on cases where the missed payments were more than 15 years old.
The next most popular thread on the cherry forum focused on the low number of new business enquiries many brokers have experienced in recent months. The message given to these brokers by several members of the forum was that they should think about being more proactive in promoting their business and taking on more complex, specialist cases.
This is a message we, at Brightstar Financial, have been saying to brokers for a long time and it has never been more relevant than now.
In recent years, this country has experienced an unprecedented pandemic and prolonged cost-of-living crisis, which have both had a huge impact on the finances of that nation’s households, and the result is that many more customers now have complex circumstances that may not fit the standard lenders regularly used by brokers. At the same time, higher rates are driving demand for second charge mortgages from customers who don’t want to switch their whole mortgage balance onto a more expensive product if they have a need to draw capital down from their property.
In addition, buy-to-let investors are increasingly looking at more specialist investments, such as HMOs, multi-units and holiday lets as well as commercial and semi-commercial property, that can deliver stronger yields. You only have to look at the continued growth of the bridging industry this year, even while the rest of the market has contracted, to see that demand for specialist finance remains. According to the ASTL, bridging applications, completions and loan books all increased in the first quarter of 2023.
Set against a mortgage market that is shrinking overall, the specialist sector is growing and it’s a sector that any business should engage with if it wants to be successful. The good news is that, even if you haven’t worked with specialist mortgages in the past, you can engage with the sector and offer your clients a more diverse range of solutions.
If you choose to partner with a specialist distributor either by working alongside or referring your cases, you can leverage the expertise and experience to provide more options for your clients.
Working with a specialist distributor can also help to give your business scale, whilst increasing your revenue. Finding the research process too labour intensive? Outsource it to a specialist distributor. Fed up with hanging on the phone to speak to lenders? Well, don’t – work with a specialist distributor that can do this for you.
And there are more benefits than just saving time and freeing up capacity – working with a specialist distributor can help deliver better outcomes for your clients. As well as specialist sector expertise, specialist distributors often have access to lenders and products that are not available to brokers directly, either because of the panel they are able to access through their network, or because that lender is operating on a limited distribution basis. You don’t need me to remind you that the introduction of Consumer Duty regulations puts even greater emphasis on securing your clients the most suitable product from all of the options available in the market.
This may be a challenging time to be a broker, but by taking a forward thinking approach and working with the right partners, you can turn that challenge into opportunity.