White Dragon Communications

Bob Hunt

29 September 2023

‘If you can keep your head when all about you are losing theirs and blaming it on you…’

This, as you will know, is the opening line of Rudyard Kipling’s poem If, and – as I write this – it seems particularly apt for mortgage advisers who are having to deal with something approaching an unprecedented level of change in the marketplace.

Monday 26th September has already written itself into the history books in terms of mortgage product withdrawals, and again as I write, we are still seeing the fallout of the Kwasi Kwarteng ‘Mini Budget’, how the markets reacted to it, particularly the price of Sterling, and what this has meant in terms of rate levels, pricing and the ability to fund (and offer) mortgages going forward.

The headlines have been stark, however the first thing we as a sector need to do is ‘keep (y)our head(s)’ because there are undoubtedly a lot of panicked people out in the country right now, completely overwhelmed by what they are reading, worried about future mortgage availability/cost, etc, and what it means to their household outgoings. That is heightened by what is happening to the cost of living right across the board.

In this environment, there might be a temptation to ‘act now, think later’ making a bad situation even worse. I’ve already heard from Paradigm advisers who are attempting to pick up the pieces from clients who saw a PT ‘deal’, agreed to it, and only then took it to their adviser to see if it actually was the right one for them.

By that time, it is potentially already too late, and I’m hearing of borrowers who think they are doing the right thing but are ending up paying more than they need to, because they didn’t seek an adviser’s help up front.

That clearly needs to be the big message that advisers are putting out into the market, particularly to existing clients who might be reading headlines and thinking that options are running out, so let’s take the first one they see.

This is undoubtedly a stressful time for many – especially advisers – but we need to present a calm demeanour, and to show the skills and professionalism that is going to help clients get the best/most appropriate deal for their needs and circumstances right now, not just something they think they can grab.

We should also not forget that this will be a new situation for the vast majority of clients. A rising rate environment has been alien to our market for over a decade, and these cost of living increases, heighten the tension, stress and worry.

At the very least, we should be telling clients not to take those non-advised retention offers, and instead put them in the back pocket, bring them to the adviser, and let them do their job in order to ensure they are right for them and the best that can be achieved.

We should also remain focused on managing client expectations in this market. It’s not as if we are working within a ‘normal’ service/capacity environment. Part of the problem throughout this year has been pipeline continuance, stretched timeframes for completion, and lenders upping rates in order to try and control their inflow.

This situation hasn’t simply changed overnight, and we need to be fully aware that the rate changes/product withdrawals are all happening within the context of a lender community that has struggled to cope with demand throughout the year.

Understandably, everyone is feeling the pressure and there is significant stress involved in working in this market. If we can all accept that and understand that clients are perhaps feeling this the most, then we can be that calm presence, informing and educating, and leading the consumer through to a positive outcome. No-one will be more appreciate of this than clients during this current situation, so let’s make sure we deliver on it.