It makes perfect sense for advisers to make the best of a cut to the Bank base rate in a highly competitive market
Cuts to Bank base rate have been as rare as hen’s teeth over the past seven-and-a-half years, and given that the Monetary Policy Committee has provided the mortgage market with this recent ‘gift’ it makes perfect sense to make the most of it.
Anecdotal evidence from our advisers and firms suggests the decision to cut BBR has sparked an increase in interest levels from clients, particularly for those seeking to reduce their monthly outgoings via a remortgage.
Potential first-timers too may have been encouraged at the drop in mortgage costs, while we are also seeing many lenders moving towards underserved borrower groups such as interest-only, the self-employed and those in (or entering) retirement. This is particularly the case for those seeking to fill something of a business volume gap left by the drop-off in their buy-to-let activity.
Even with the anticipation of another rate cut before the end of the year, advisers and their clients have a clear incentive to act now rather than later.
August tends to be a slower month all round, however, lenders were not backward in coming forward with regards to rate cuts. That said, our understanding is that many lenders have been using the post-rate cut holiday weeks to prepare for launching new products and ranges during September – a month that of course tends to kick-start activity levels for the rest of the year.
The important point now is to make all existing and potential clients aware of the products and opportunities on offer, and the highly competitive nature of the mortgage market post-BBR cut. Marketing activity should be ramped up as the provision of quality information on the market, and your services, could make all the difference when it comes to the business you write over the next few months
Richard Adams is managing director of Stonebridge Group