It’s fair to say this summer has been, well, a bit bleh. And I’m referring not just to the distinctly un-summery weather.
Like many brokers looking out for our clients’ best interests, this spring it was our mission to help anyone with a rate ending within six months to fix onto a new deal as early as lenders allowed.
It was clear from money market activity, inflation and other metrics that mortgage interest rates would continue their skyward trajectory.
I am confident we saved many clients thousands of pounds in mortgage interest by getting them on deals that would have been 2% or 3% higher if fixed at the end of their early repayment charge period.
The back-to-reality vibes will kick in soon enough
Recently, however, we’ve found ourselves in something of a limbo. A few weeks ago, some lenders tentatively reduced rates (causing much excitement in our office), and we’re confident we’ll see more of this over the coming months as inflation declines and money market confidence rises.
But, in the meantime, many property investors with mortgages ending towards the end of this year and into 2024 are biding their time to see if pricing does soften and, if so, by how much.
We’re confident, once summer (if that’s what it was) is over, the back-to-reality vibes will kick in, refocusing our clients on their investment plans and finance options, and on the siren calls of purchase opportunities during a property value slump.
Rest, arm yourself with new knowledge, and prepare to go again when the market inevitably jumps back into action
Over the summer, we’ve taken the opportunity to refocus, re-evaluate and resharpen our mortgage brokerage toolbox. When the market emerges from its summer holiday slumber, our team is ready for whatever challenges — cases or market conditions — the autumn throws at us. So, how are we preparing?
Time to upskill
At Mortgages for Business it’s important that our people continue to learn at every stage of their career. Our junior brokers have spent time broadening their knowledge of more complex buy-to-let cases, including intricate investment structures, unique property types or extensive portfolio deals.
All our brokers regularly meet with lender BDMs to discuss criteria and USPs in depth, so we know exactly where to place even the quirkiest of deals.
When you can foresee rate increases, your clients will be thankful you warned them
It’s critical we’re aware of the other challenges our clients face besides mortgage interest rates, such as the Renters’ (Reform) Bill, energy performance certificate regulations and tax changes, and can direct them to helpful resources and information. These issues are part of the context of our clients’ investment plans. We need to understand and advise with them in mind.
It’s all well and good ensuring we’re experts in our field to provide better advice. However, it’s also essential our clients make informed financial decisions and understand the mortgage market’s complexities.
We’ve utilised our online content and our platforms at events to make topics like the swap markets accessible to anyone so they can see how these structures impact their finance options.
Now, more than ever, it’s crucial our clients understand the pros and cons of fixed-versus-variable rates; and, if they opt for fixed, for how long should they lock in? In such a turbulent market, we want our clients to have confidence they’re making the right choices for their property investment plans.
Some lenders have tentatively reduced rates and we’re confident we’ll see more of this over the coming months as inflation declines and money market confidence rises
We’ve shared our insight and predictions about the market with as many people as GDPR allows. In the really volatile market, when lenders pulled rates every other minute, clients needed to know because the financial consequences were expensive.
When you can foresee rate increases, your clients will be thankful you warned them. It’s easy to avoid giving your thoughts on predictions for fear of being wrong, but I know our clients want to hear what we have to say. After all, we’re the experts; they look to us for advice and guidance. No one will remember you if you say nothing at all.
There’s been a lot of talk about broker burnout and I understand why. The past few years have been manic: 2021’s stamp duty holidays; interest rates so low that money was basically free; and pent-up demand that meant last summer I worked throughout my two-week holiday (my family have just about forgiven me).
We were so busy I didn’t feel there was another option, but this is not a sustainable way to live. Working on commission means it’s easy to blur the lines of work-life balance; if we’re not working, we’re not making money.
Over the summer, we’ve taken the opportunity to refocus, re-evaluate and resharpen our mortgage brokerage toolbox
There’s a fine line between a restful market and one that’s concerningly quiet, but I think many of us, myself included, need to appreciate the slight pause.
Rest, arm yourself with new knowledge, and prepare to go again when the market inevitably jumps back into action.
Jeni Browne is sales director for Mortgages for Business
This article featured in the September 2023 edition of MS.
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