The intermediary community has always been adept at embracing change and evolving to maintain longevity from a business perspective and in delivering solutions which match their clients ever-changing requirements.
Following a period which generated a rising tide of low, fixed rate vanilla purchase business, the current advisory landscape may come as a shock for those newer broker entrants who have only experienced a sustained low interest rate environment and escalating house prices. However, the last six months or so have seen some huge shifts in rates, criteria, product availability and affordability.
Borrowing focal points have shifted and many previous trends have been thrown out of the window as market complexity and fluidity has ramped up, with varied lending appetites and liquidity leading advisers to need more support than ever from a compliance, technology, simplified sales processes, packaging and cost standpoint.
During this time, the role of the network has also changed to focus on better supporting firms in some of the more in-demand specialist product areas such as bridging, second charge, development finance, complex residential cases, the more professional end of the buy-to-let spectrum and later life lending. To name but a few.
How quickly things can change in the current market and economic environment was evident in data from Knowledge Bank which showed March to be the first month that any sector has had a completely new top five searches since its index began in July 2018.
This saw a complete change of the most common searches performed by brokers in the equity release sector. The top search was for lenders who would allow a ‘married couple application in one/single name’ followed closely by brokers searching for buy-to-let equity release’. Making up the remaining top five criteria that brokers were searching on behalf of their clients included ‘leasehold remaining term/beginning of term’, ‘maximum age at application’ and ‘early repayment charges’.
In sharp contrast, there were no search changes highlighted in the BTL sector. Which, as emphasised in the commentary around this data, helps demonstrate that there are no hard and fast rules when it comes to criteria changes and why it’s imperative that brokers have a strong support network in place which provides them with the ability to stay up to date with any and all changes across the industry. This is also vital in being able to take advantage of opportunities which continue to present themselves, especially across the more specialist markets.
Areas such as later life lending will continue to prove attractive for a growing demographic going forward, and this is being recognised throughout the intermediary community. Significantly, this lending type was highlighted by a number of our ARs over the past 12 to 18 months who were looking to access a variety of solutions to meet growing client demand. Demand which led us to form a later life lending panel towards the back end of 2022 and Q1 has seen strong levels of activity in this sector which we expect to further increase throughout 2023.
Focusing on the wider mortgage arena, we are currently operating in a marketplace which represents a new challenge for many clients and intermediary firms. But it also signifies a great opportunity for advisers to learn new skills, explore new markets and maybe even reassess their regulatory status. It’s also a time to carefully evaluate what kind of support network they need to have in place and where these opportunities may arise. And those firms who identify and embrace the right changes for their business will be the ones who continue to succeed.
Donna Wells, Director at Envelop