There’s a huge amount of excitement in the broker community at present — and rightly so. The first rate rise in a decade came earlier this month and will put large numbers of households on the mortgage equivalent of red alert.
More and more existing homeowners will be concluding that now is the time to lock in to a decent rate before another potential rise comes in 2018. Equally, many prospective buyers could now commit to a purchase before rates potentially rise further.
But while this is great news for brokers, as in the majority of cases they will be the first port of call, it should not blind them to the huge opportunities offered in other areas of the finance and property markets.
I suppose what I’m saying is that it’s too easy to focus overly on the owner-occupier market at a time like this, and to forget that other channels are also thriving — and offer similar, if not better, revenue potential.
Buy-to-let is one example: the PRA changes introduced at the beginning of October have put brokers in pole position in terms of advising portfolio landlords on the alternatives to the high street should they have problems financing, or refinancing, their loans.
And in cases where a client’s portfolio does not meet the new required standards, brokers are perfectly positioned to buy their clients time to get their houses in order through a short-term lending facility. And again, rates have come down sharply on bridges, too.
The development market is also thriving. With loan rates increasingly competitive, as more and more challenger banks and niche lenders focus on the development arena, and the sheer lack of supply acting as a hedge, new build projects are soaring around the UK.
In short, the entrenched supply deficit and urgent need to fix it offers no end of commercial opportunities for today’s broker.
And let’s not forget about the growing momentum in the seconds market. With banks rowing back significantly on their unsecured lending, the seconds market has the potential to double in size in 2018.
Households have taken on a huge amount of debt in recent years and will be looking for affordable ways to pay it off as rates edge up. When remortgages are not possible or desirable, secured loans are a viable alternative.
The good news is that secured loans are a different breed altogether now compared to a decade ago, pre-global financial crisis. Rates and fees are significantly lower, and many can be exited without a penalty, making them a lot more palatable for your clients.
All in all, despite the mad mortgage rush many brokers will invariably get caught up in in the months ahead, my advice is to continually broaden your revenue base so that when the term market does calm down, you are less exposed and can adjust your commercial focus with minimal fuss.
And if you need help doing so, a specialist packager is always on hand to help.
Mark Dyason is managing director of Thistle Finance