Legal & General mortgage club was recently involved in some research carried out by YouGov. The purpose of the research was to understand and capture a number of important points relating to consumers and their mortgage needs but primarily was to get a feel for how easily they might be able to secure the mortgage they might need and how they would go about doing that.
One in three mortgage borrowers will be looking for another mortgage in the next 12 months. That is a very high proportion and no doubt reflects significant pent-up demand in terms of homebuying and those whose current deal will expire and needs replacing or simply they feel they need to lock into a low fixed rate now.
That bodes well you could say and sooner or later one hopes that demand will come through and contribute to a more mobile and lucrative market. However, the two key findings for me were:
- -Only one-third of those interviewed felt they would actually get a new mortgage.
- -One in two would use a highstreet lender.
Perhaps rather unsurprisingly, the two-thirds that felt they would struggle to get a mortgage cited concerns about the deposit/equity available and some felt their credit record would prevent them from securing what they need.
On the second point, one in two would use a high-street lender because they bank with one and that was the reason given. Of course, that almost accurately reflects the mortgage distribution market today but I was stirred by this figure. Later in the survey, 81 per cent of those surveyed emphatically stated they would actually want to use an intermediary once they fully understood what it was an intermediary could do for them and the fact that a mortgage can typically be achieved if possible via an intermediary following just one interview.
This question is not new and I know there are good answers but why is it that many consumers still do not fully know what an intermediary does and how valuable their service can be? How do we as an industry collectively pull together to meet the needs of those borrowers above through actively promoting the wares of intermediaries?
Would a £20m media awareness campaign, promoting the intermediary sector with a strong call to action, be worth the investment? Purely for the record, the cost of running that campaign would be about £31 for every intermed-iated mortgage completion today. My question is who would be willing to pay for this, if they felt the cause and potential payback to be worthwhile?
Regardless of that question, the research carried out makes clear that there is definitely demand out there. Eighty-one per cent of consumers would use an intermediary, and intermediaries have the greatest product choice available when compared with direct. Moreover with the launch of the likes of Precise, Aldermore, Kensington et al, these people can access lending that 18 months ago would probably not have been possible. For those of you not proactively promoting as widely as possible what it is you do and what you can offer, it would appear you are probably missing out.
Ben Thompson is director of mortgages at Legal & General