Borrowing in the UK is up, with net mortgage borrowing £11.8bn in March of this year. This is the largest amount seen since borrowing first started to be tracked back in 1993. In fact, borrowing even soared past the previous record, set in October 2006, when £10.4bn was borrowed against properties.
Much of the increased borrowing was due in large to the extended stamp duty holiday, causing homebuyers to rush to take advantage of the tax break. The return of 95% LTV mortgages also opened up the playing field for homebuyers looking to get on the property ladder with a smaller deposit. As the housing market boomed thanks to these incentives, brokers saw one of the busiest years in recent history for home purchases.
The increase in purchases has created a rise in mortgage rates nationwide. This means it is very likely that we will see an increase in remortgages two years from now as those purchasing now will attempt to remortgage for a better deal.
Looking at remortgages down the line
Remortgages increased in the last quarter of 2020, with homeowners looking to lower their monthly payments and release equity from their homes. This will likely be the case two years from now as well.
Additionally, those who wished to remortgage this year were met with denied applications, mainly for the reason of loss of job. However, as the economy reopens and we work to get back on track, those who could not get remortgages this year may be eligible down the line.
So, what are you going to do as a broker to get your share of the remortgage market? Of the business you conducted 2 years ago, how many of those are remortgages you are servicing now? This is certainly something to think about for the future.
For brokers, it is now more important than ever to get your retention strategy right. Doing so will only benefit you two years from now when your current and new clients may wish to remortgage.
So, what are you doing to keep your clients coming back? Are you nurturing your client relationships and instilling trust in your clients so that those who are making purchases now come back to you for a remortgage in the future?
How Dashly can help
Unlike many retention strategies, Dashly’s doesn’t start 6 months from the customer’s product expiry date. It’s always-on searching for the next best deal.
After all, what if a better product became available at a much earlier date? Would you want your customer to be able to take advantage of it? Of course, you would.
But what inhibits this is the ability to search every day, 7 days a week, for all your customers. Dashly does all of this for you, taking into consideration up-to-date property values and mortgage balances, lending criteria, etc to empower you, the adviser, to talk to the customer about the opportunity and whether the client opts to take advantage of the better deal will help to strengthen the customer/adviser relationship.
With your purchase business probably flying at the moment, Dashly can help manage and nurture these relationships all the way through to the next transaction, whether that’s in two years, or six months.
The bottom line
If you play your cards right, it may be the best remortgage market for you two years down the line. So, stay the course and manage your retention strategy properly so that you can benefit when remortgages are on the rise in the future.