Mortgage Introducer April 2021

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Changing with the remo seasons Rob Evans CEO, Paymentshield


ur homes have taken on a purpose unimaginable only a year ago. It’s not just that we’re spending more time indoors; lockdown after lockdown, the nation’s mindset around the home has completely changed. Kitchens have become offices, living rooms schools, bedrooms gyms. Home is no longer just a physical location, but our social hub, place of leisure and professional “headquarters” all at once. There’s a seeming, and perhaps surprising, reluctance for this to change too much too soon. According to a recent Paymentshield survey, 73% of employees wanted to remain working from home in some form – whether that be full time or with the flexibility of coming into the office a few days a week. This renewed appreciation of the home has spurred homeowners to see their property in a new light, with many opting to renovate their existing indoor and outdoor spaces rather than move up the property ladder. Indeed, over a quarter of the 2100+ participants in the YouGov survey we commissioned at Paymentshield said that they’ve carried out garden makeovers or “substantial home improvements”, including loft extensions and kitchen installations, since coronavirus restrictions first began in March 2020. RESILIENT REMO MARKET

As a result of this, there’s a rising appetite in the remortgage market. While remortgage instruction volumes fell by a third last August following

the announcement of the stamp duty holiday, December 2020 saw a rise of 7.7%. The reasons behind remortgaging have also shifted. Compared to prepandemic levels, when only one in five remortgage applications were made by homeowners seeking to carry out home improvements, recent data from NatWest suggests that 62% of people – 3x more – would now consider remortgaging their property for the same reason. In an otherwise unstable housing market, the remortgage market has remained a largely reliable option for advisers throughout the pandemic, and these stats suggest that this is unlikely to stop soon. GI - AN OVERLOOKED OPPORTUNITY

There’s a clear opportunity for advisers here. They should be incorporating General Insurance (GI) into the remortgage and product transfer process and proactively offering a GI quote in each conversation they have with those clients. Offering to review GI when discussing a remortgage or product transfer with a client is arguably more relevant than ever – as we know, customers’ use of their houses has very likely changed, but how likely is it that they have reviewed their needs recently? Our YouGov survey found that home insurance policyholders would be receptive to a financial review when remortgaging, and yet the opportunity continues to be overlooked by advisers. On the last occasion that homeowners remortgaged or did a product transfer, 32% did not review their home insurance policy, but 34% expressed that they’d be happy for an adviser to do so, even if they didn’t expect them to. It is by identifying points like this in

A holistic service can ensure long-term relationships

the customer journey where advisers can add value that will future-proof their business. Time and again, GI has proven itself a resilient revenue stream that can successfully supplement an adviser’s core offering. Weaving GI into client conversations means that advisers can offer a much more holistic service, maximising the value customers get from having an adviser and hence increasing client loyalty and retention in the long-term. A LONG-TERM SUSTAINABLE APPROACH

It may be that the extension of the stamp duty holiday will see activity resurge temporarily in the purchase market, but for their businesses to flourish, advisers must look beyond the here and now. The key takeaway as I see it, is that solely reacting to market trends is not a sustainable adviser business model. There’s a need for a more long-term approach. For advisers, this means making the most of not only the remortgage market in itself – a market that shows signs of lasting fitness as large volumes of fixed-rate deals mature in mid-2021 – but also using a remortgage or product transfer as an opportunity to speak to clients about GI. Together, these two approaches will enable advisers to help their customers to protect and enjoy the homes that we’ve all come to appreciate that little bit more. M I APRIL 2021   MORTGAGE INTRODUCER