Questions to Consider With First Time Buyer Clients

Welcome to this months lenders focus. I’m going to start my monthly overview by going off pace and share with you a recent conversation I had a with a family member, she’s a teacher, let’s call her Louise, early 20s, living at home, and in a fortunate position where she can save each month and has a good deposit for a mortgage.  The conversation started by asking could I help her with a mortgage? I explained my position but what did she want to know. I’ll summaries the key points:

• She had done some research of the different mortgages available. What was the best one for her?

• Could she get a mortgage?

• Where should she look? Dads got his mortgage with his bank should she do the same?

• Should she fixed the rate? How does this work?

I gave her a generic overview, then asked her the question. Why don’t you speak with a mortgage adviser? Louise asked me to explain exactly how they can help her. Why am I highlighting this? How many of your clients have family members who could be in a similar position and don’t know where to look for advice.?

The conversation then went further, generically I mentioned Life Cover, Critical Illness Cover, Income Protection and ASU. Her reaction was…why do I need this?

Many of her friends continue to stay in rented accommodation as they again believe owing a property is beyond their reach and saving for a deposit is near impossible.

Again, I asked the question. How would they pay their rent if they became ill or lost their job…answer they can claim benefits. I explained this was short sighted and the reasons why… she understood the impact and even went as far as saying she would mention this to her friends!

I came away satisfied that I could point her in the right direction to get advice and thinking advice …. how many of your clients’ relatives could be in this position?  What a massive opportunity for you as a mortgage adviser to open this door when speaking with your clients to a whole new generation of potential clients.

Below are some key points from L&G Mortgage Club on Q1 2023

“Although predications at the end of last year saw Q1 of this year more difficult, they have reported a strong January seeing 2/2.5bn weeks – their highs in 2022 were over 3bn per week but into Feb and March these are now consistently around 1.5bn of lending completing week on week.

March has seen a big dip for almost all their key partners. They expect March and April to be the worst hit for completions post mini budget. Lenders and broker partners are saying submissions are on the rise and most of the top 6 dropping rates / increasing capacity but none are working at 100%. Hopefully Q2 will see a little more competition… leading to more business written. Product Transfers are up to 34% – Product Transfers are being used by lenders to maintain a strong net lending position, and reduces the need to acquire new gross lending. High Street lenders are a lot quieter, which has made space for other lenders. Regional Building Societies and some tier 2 lenders have been taking a lot more business than expected.”

Let’s hope Q2 shows an increase in submitted business, with no further unexpected barriers to dampen the market

I’ve discussed in recent issues the massive opportunities in Re-mortgages and Product Transfers market this year. With around £212bn of product transfers and around 1.8 million fixed rate mortgage deals scheduled to end in 2023 according to UK Finance. To help members we will soon be launching our dedicated PT page on our website, look out for further details.

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Anita White

Head of Lender Relationships