Without much fanfare we have crept into the second half of 2018 already – normally this is a time for reflection on the past six months and with many on their summer holidays, perhaps it also brings a brief respite before we kick hard for home from September onwards.
This year however I don’t get the impression that the mortgage market is in any mood to provide that break. Certainly, with all the current chatter about Bank Base Rate possibly increasing next month, I’m sure there have been plenty of adviser-client conversations going on about whether now is the time to go for that remortgage which borrowers might have been putting off.
I think it’s fair to say that, when it comes to mainstream rates, now is as good a time as any to be potentially locking in for two/three, maybe even five, years although it’s also quite obvious that the Bank of England’s Monetary Policy Committee (MPC) is not exactly unanimous about the need for a number of rate rises. There was talk recently that rates could stay below 2% for the next three decades which might seem fanciful but this is potentially the new environment we are living in.
What all this to-ing and fro-ing about rates, and the political situation, does represent is a significant opportunity for advisers however because in a very uncertain world, advice will be needed and much in demand. It’s a question of getting in front of those existing and new clients who are seeking that advice and extolling the virtues of using your services, not just in a mortgage sense but also around GI, protection, conveyancing and the like.
It’s because of this reason – and the strong start to the year our own member firms delivered – that I have high hopes and great confidence that the rest of 2018 will build on the strong foundations already put down. Not only do we have that residential/mainstream remortgage opportunity to take, but clearly in other mortgage sectors we are seeing strong growth.
Product transfers – long the preserve of lenders and lenders alone – are now much more likely to be in an adviser’s wheelhouse, and while we might bemoan the lower procuration fee that many lenders pay for such business, it’s without doubt a few steps forward from where we were a few years ago when most lenders were not paying anything for that business.
In that sense, you get the impression that a number of forward-thinking, intermediary-focused lenders will continue to push the envelope in this area and, in order to gain a competitive advantage, we could see proc fees raised and a much greater willingness to engage, and promote, advisers to existing borrowers. Certainly, acknowledging the original adviser’s existence in the customer communication is a step forward in that regard and we would hope more lenders continue to do this.
Other areas of the market that look set to deliver strong growth of course include the later life lending and equity release markets which reflects the UK’s changing demographics and the need for quality advice not just through a working life but also into retirement. As more lenders offer retirement interest-only (RIO) mortgages it seems likely that interest, and therefore, demand will push on again, and it’s important that advisers are involved in this part of the market.
Finally, we have far greater interest in first-time buyers than ever before, and married up with this, is the push for more new, affordable homes to be built. New-build can seem a tricky market to break into but it is entirely possible, and given this Government’s commitment to more supply, it is one that should provide opportunities for those advisers who can get their propositions right.
Overall therefore there is much to look forward to as we canter into H2 and with a clear vision and a strong commitment to those sectors and the potential clients they could bring, the benefits should roll in long after the year has ended.
Jo Carrasco is business partnerships director at Stonebridge Group