Making the most of every opportunity

16 January 2012 | By Adrian Scott, Group Mortgage Services Director, Connells

As this situation shows no signs of abating in the year ahead, we need to be proactive in finding new ways to market our services and maintain healthy volumes of business.

In areas where property transactions are higher, we might assume that opportunities for mortgage business will follow.

This doesn’t mean there aren’t good prospects for brokers in areas where transactions are low, but we may have to work harder and be more innovative in our approach with customers, as well as developing a wider portfolio of products catering to the economic climate.

The challenge for all brokers is to write good quality business and to make the most of every opportunity. Working together, we can raise awareness of what’s on offer but we need to generate opportunities.

Property transactions

We saw varying housing market reports and indices in 2011. Some areas, such as buy-to-let, enjoyed success for most of the year, while others saw a more gradual change, including first-time buyers, who benefited from some easing of credit restrictions and access to higher LTV deals.

Figures by Zoopla.co.uk show property transactions vary drastically by region (see table). In Wales, for example, we see that transaction volumes in the first 10 months of 2011 were less than a quarter of those in the more buoyant South-East, which saw over 87,000 home sales from January to October last year.

Higher transaction levels were maintained across the south of the country, despite higher property prices, with London topping the table at an average house price of £443,696 in the first 10 months of 2011. While it may seem that mortgage brokers in the top half of the table are enjoying greater business opportunities than their counterparts in areas such as Wales and the North-East, we believe there are business opportunities to be had in all areas.

Despite regional disparities, brokers need to understand where the opportunities lie, market themselves effectively and take a more creative approach to the advice they offer to survive in challenging areas.

First-time buyer market

Media coverage and speculation on first-time buyers has been extensive over the last year and this is likely to continue. We see this market as an area with potential, qualified by the fact that first-time buyers accounted for around a third of our entire mortgage business in 2011.

That said, the sector can be unpredictable. For example, 2011 hailed the return of higher LTV products up to 95% and 100%, including mortgages from Skipton and Aldermore. We found this did not automatically lead to increased numbers of would-be buyers coming through our doors.

The trend may indicate that first-timers have become so accustomed to not being able to get a mortgage that they have stopped looking. If this is true, we as brokers have a role in raising awareness. If they are not coming to see us, we need to go out and get them and ensure these potential customers know there are mortgage options available to them.

And with the imminent demise of the first-time buyer Stamp Duty break, now is an ideal time for those looking to buy for the first time to get on the property ladder.

Insurance

When dealing with clients in 2012, it’s important to think more widely about other services offered. Protection has long been a useful income stream for intermediaries, so with landlords, for example, don’t just think about landlord insurance - make contact with their clients to offer contents insurance and income protection.

Landlords are often keen for their tenants to take out income protection because it helps to protect their rental income. Clients are used to life assurance and, increasingly, critical illness cover but there is a massive protection gap in the UK for income protection. As well as being sold when a mortgage is taken out, this is a useful product to promote to your existing client bank.

Wills
Consider recommending wills. Recent research by Unbiased.com suggests that around 29.5 million adults do not have a will, so recommending your clients write a will or review their existing one can generate income and create links with local solicitors for reciprocal business.

2012

Whichever area of the country you are based in and whatever the state of house transactions and prices locally, sales opportunities definitely exist.

Now, more than ever, with the challenges in the current market, it’s important for brokers to show potential customers the financial opportunities we can make available to them.

Taking advantage of every business opportunity available will determine how successful we are in the months ahead.

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