Rate changes and the current challenging mortgage market have resulted in an increase in rebroking, some industry insiders suggest.
Mortgage Solutions spoke to several brokers who confirmed they were doing more work to ensure clients are on the best rate amid the rapidly changing mortgage environment.
While mortgage rates have declined from their peak, boosted by the interest rate cut by the Bank of England during the summer, they have more recently begun to edge upwards.
For example, the average two-year fixed rate at the beginning of this week was 5.37%, up from 5.36% at the end of last week, according to Moneyfacts.
Current conditions have resulted in a sense of urgency among some borrowers, who are keen to secure a deal before it potentially extends out of reach.
Elliott Culley, director at Switch Mortgage Finance, said: “With rates decreasing, there is always a large amount of work to be carried [out] to monitor existing products and ensure all clients are on the best rate.
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“The impending rate increases have not filtered through to mainstream media yet, but as soon as some of the larger lenders increase, activity from clients usually spikes to ensure the best product.”
David White, chief operations officer at Simply Lending, added: “With talk of rate rises, we have certainly seen a greater sense of urgency among people wanting to secure their mortgage deals as soon as possible.
“With affordability being extremely tight across the board, there are genuine concerns among borrowers that an increase in rates could scupper a deal.”
The Autumn Statement
The Autumn Statement on 30 October is also making borrowers exercise more caution about the outlook for the mortgage market.
These borrowers will also be keen to secure the best deal in case the Chancellor’s statement is not well-received and products disappear.
Dennigan Tyson, mortgage and protection adviser at Pia Financial Solutions, said: “Absolutely, I am… doing more work for clients than before with the rate changes and erratic nature of the market.
“I think the most common example is for clients who opted for product transfers, then opt for a remortgage due to rates being better, to then see their existing provider has matched the remortgage rate.
“With the budget looming, I think people are now going to be cautious as the Labour government has kept warning that it ‘won’t be pretty’.
“Lastly, clear and concise advice as well as management of client expectations is now imperative to every transaction.”
“It’s not 2008 any more”
Stuart Gregory, director at Lentune Mortgage Consultancy, said: “Brokers are working harder for less – that’s the reality for most brokers.
“Please don’t buy into the outdated idea that a procuration fee of 50% below a standard rate covers the work involved in a product transfer; it may have done when they were launched, but it won’t now.
“We regularly re-submit at least three to four times before the switch completes and each time it’s additional open-market research before we do so.
“If lenders want to have brokers to distribute for them, the procuration fees need review – it’s not 2008 anymore.”
