"With a growing number of individuals experiencing adverse credit, brokers continue to play a critical role in helping customers achieve their homeownership goals, even when their financial history presents challenges."
The latest findings from the Pepper Money Specialist Lending Study offer valuable insights for brokers, not just in terms of understanding the financial circumstances and aspirations of the nation’s households but also their attitudes towards mortgage advice.
Our most recent study has found that the number of potential homebuyers with adverse credit who say they would speak to a broker has slightly decreased from 58% to 50%, but it’s important to remember that this still represents a strong opportunity. With a growing number of individuals experiencing adverse credit, brokers continue to play a critical role in helping customers achieve their homeownership goals, even when their financial history presents challenges.
The study revealed that the primary reason potential homebuyers with adverse credit seek the help of a broker is their access to lenders not directly available to the public. 67% of respondents cited this as a motivator for seeking out a broker, highlighting an increasing awareness of the specialist lending market and the pivotal role brokers play. The second most popular reason, amongst 64% of those surveyed, was securing the best rate in the market.
This reinforces the message for brokers: it's not always just about securing the lowest rate. Customers recognise the value of professional advice, especially in complex cases, and this is where brokers can showcase their expertise. By communicating the depth of their experience and the comprehensive support they provide, brokers can differentiate themselves and build trust with their customers.
When it comes to communication, 59% of customers indicated a preference for face-to-face advice, followed closely by email at 58% and telephone at 50%. However, the study also highlights the growing importance of digital tools in the customer journey. Nearly half (46%) of potential homebuyers turn to online research when searching for a broker, with recommendations from family and friends remaining strong at 47%.
This shift presents a significant opportunity for brokers to enhance their digital presence. Ensuring that your website clearly represents the full range of services you offer and demonstrates the value of your expertise is critical. Moreover, engaging in digital marketing and maintaining a strong social media presence can help raise your profile and attract customers who are increasingly relying on online resources to find the right broker.
A common concern among brokers is whether customers are willing to pay a fee for their services. Interestingly, the study revealed that attitudes toward broker fees are quite balanced. While 38% of respondents said it depends on the broker, 27% prefer to use a broker who doesn’t charge a fee. However, a notable 13% proactively favour brokers who do charge, believing that paying a fee may result in more independent advice.
This data may provide an opportunity for brokers to re-evaluate their business models. Customers aren’t necessarily put off by paying for mortgage advice, but the key is to demonstrate the value they will receive in return. By focusing on helping customers achieve their specific goals—whether that’s access to specialist lenders or securing the best rate—brokers can offer a compelling service that clients are willing to invest in.
By focusing on building a strong digital presence, offering clear value, and tailoring advice to each customer's unique circumstances, brokers can maximise the opportunities in the year ahead helping more people turn their homeownership dreams into reality.
