"There’s no better time than at remortgaging to conduct a full Spring clean of a client’s finances"
Like anyone immersed in the mortgage market, I’m constantly on the look out for trends which appear to show a more positive market sentiment, especially after what we have gone through in recent months.
The latest product number figures coming out of Moneyfacts recently suggest a lender community which is increasingly engaged and wanting to provide a greater array of options to advisers and their clients.
The total number of products has risen over the 5,000 mark for the first time since last May – which I think we would all agree seems like a lifetime ago. Indeed, the 5,146 product numbers is the highest since February last year, albeit the rates currently on offer tend not to look like anything that was available back then.
While greater product choice is not in itself a signaller of mortgage market health, it is certainly a greater sign of lender confidence and indeed lender appetite, particularly after what has been – to say the least – a challenging period since the ‘Mini Budget’ effectively torpedoed the market.
What I also think we’re seeing here is a recognition by lenders of where they are currently situated in terms of their lending ambitions and targets for 2023.
Believe it or not, we’re over a third of the way through the year and entering what is traditionally a more active Spring period for housing market activity, particularly in the purchase space.
However, I wonder just how ‘on target’ a lot of lenders will currently be, especially if they upped their lending targets for 2023 based on a strong first eight months in 2022.
Certainly, I would be interested to see the lending activity/volume comparison for many lenders in terms of the first four months of this year, compared to last, which as you’ll remember, was a pretty strong period.
My impulse is to believe that lenders will be some way down on those comparables, which is why we currently have this increase in product numbers, but also why we are seeing product rates tracking – particularly in the lower risk, lower LTV sectors – well below Bank Base Rate.
Of course, this disconnect is much to do with swap pricing rather than BBR, and I’m aware that this is still fluctuating a fair amount, particularly when the inflation cuts we were promised have still yet to emerge.
That said, when it comes to longer-term money, as I write this five/seven/10-year swaps are all below 4%, and even if the MPC decide to raise BBR again, I still believe we'll see a differential and, of course, lenders will need to be competitive against each other and this should still mean a continuation of relatively keener pricing.
Which hopefully leave advisers with a much healthier array of product options to review, and of course, pricing which doesn’t look beyond the pale for those remortgage borrowers in particular, who are going to be looking at a very different marketplace compared to the last one they (re)mortgaged into.
It seems an obvious point to make but I suspect we already know that remortgage activity is likely to be the foundation on which you’ll be building your business income throughout 2023, and while purchasing is not falling off a cliff as some would have us believe, it’s unlikely to reach the levels of the last few years.
With remortgage business being the cornerstone it’s therefore vital that you make the most of those returning clients, or those coming to you for the first time in search of professional advice. The greater number of products available is good news, but it does mean for a complex and complicated market that I suspect many existing borrowers will need advice to be walked through.
At the same time, ensuring you look at all their other financial needs is vital, and I would certainly urge you to leave no stone unturned when you get in front of that remortgage client, whether it is GI, protection, conveyancing, legal services, etc.
There’s no better time than at remortgaging to conduct a full Spring clean of a client’s finances, particularly given their circumstances and needs have likely changed since you last saw them/they last remortgaged, and I am sure they will be very grateful that one person – namely you – is able to cover off all their needs.
