"This last quarter of 2024 presents a clear remortgage opportunity, and with that comes, the ability and responsibility to consider the client’s entire financial situation"
Just over a year into the new Consumer Duty ‘regime’, it’s fairly obvious there will be no let-up in terms of the responsibilities placed upon mortgage advisers, not just in terms of the initial mortgage advice and recommendation, but also the cut-across to other client wants and needs.
Where this might be most relevant to advisers themselves is within the scope of remortgaging clients, not least because this tends to be a strong opportunity to review a client’s entire financial situation, and to review based on the changed circumstances since they were last covered off. From my understanding, that’ exactly what the FCA want advisers to be doing more of.
For instance, if we are talking about a five-year gap since the last mortgage was written – and the regulator is keen to stress that through that period regular communication between adviser and client should be happening – then there could have been some significant changes for the client.
2019 feels like a very different world to 2024 in all manner of ways, and if we stop to consider just what has happened in this period, then it will be obvious to all that some clients remortgaging now are going to be in a very different position, and they will be facing a very different mortgage/financial market.
Never mind the pandemic and lockdown, and what this might have meant, but also of course such totem moments as the ‘Mini Budget’, the war in Ukraine, the cost of living increases, rate fluctuations and now a new Government, and a new war in the Middle East.
The impact has been considerable, and in terms of mortgages, while we appear to be on a downward rate trend, again it’s a very different rate picture compared to two/three/five years ago.
That said, remortgaging clients clearly offer a very strong advice opportunity, and given we are led to believe October through to the end of the year presents something of a high water-mark for such business, then advisers will certainly want to take advantage of this.
And, as mentioned, this might be a very good time for such activity, especially if we get further Base Rate and product cuts during the rest of 2024.
According to recent research from Compare the Market, 46% of existing mortgage borrowers said if the Bank of England had dropped rates again last month, they would have been more likely to shop around for a deal.
We know that the August Base Rate cut acted as a considerable catalyst for remortgage activity, and my view is that the likelihood of a cut at the November or December meeting has gone up recently, and we might anticipate a similar reaction from existing borrowers as a result.
Overall therefore it makes sense to cover off as many ancillary bases as possible with such remortgaging clients.
Conveyancing is a key aspect of this, and while ‘free legals’ remain on offer, we believe advisers are much more inclined to advise clients to take out a fixed fee conveyancing option, not only because of the fee transparency this provides – no hidden extras for the client, for example – but also because of the service they receive, the legal representation for them not just the lender, and the ability to use specialist conveyancers who can hit the target date required.
That transparency angle seems particularly important in the Consumer Duty age, and as a result we have three fixed-fee remortgage conveyancing products available, the most recent being the highly-competitive £245 (including VAT) option that also offers the introducing broker a £70 referral fee.
Since launching at the end of September we’ve seen a significant take-up from our broker users of this product, and while we’ve had instructions right across the loan value piece, there appears to be something of a sweet spot between £100-£200k loan sizes.
Clearly, being able to provide excellent conveyancing services to remortgaging clients and being able to work with an excellent solicitors firm, ONP, who are experts in this field, is a key determinant of which fixed-fee option to choose. We also have other remortgage products priced at £350 and £500.
This last quarter of 2024 presents a clear remortgage opportunity, and with that comes, the ability and responsibility to consider the client’s entire financial situation and to ensure they have everything they need. Conveyancing could, and should, play a major part in that, and by doing so you keep a happy client, get a positive outcome and ensure a strong income source is either opened or maintained.
