Are Mortgage Brokers Missing Out on Millions?
Four Strategies for Winning the Custom of First Time Buyers
Buying a house, particularly for the first time can be a daunting prospect. Credit checks, forms, and the huge variation of mortgage products and different lenders can be overwhelming.
In spite of this, a mere 28 % of first time buyers intend to fund their house purchase using a mortgage found through a mortgage broker, with 46% intending to arrange their mortgage directly with the bank. However, at some point in the house purchase process, this attitude changes, with the percentages becoming 47% and 32% respectively.[i] In other words; the process of the house purchase makes many people realise the value of the mortgage broker over and above finding their own deal.
This still, however, means that 53% of first time buyers are not using a broker, representing a market worth millions of pounds. There is plenty of opportunity here for mortgage brokers to win over first time buyers, saving these new customers huge sums in overly expensive mortgage deals in the process.
The importance of a mortgage broker
There are so many advantages in employing a mortgage broker early in the process of purchasing a property. Helping first time buyers to understand the benefits is the first step in winning their custom.
· It is estimated that one third of customers do not get the cheapest mortgage available.[ii] Knowing the market well, brokers can access any new deals as they become available, as well as being able to analyse each customer’s individual circumstances and the best deal that they can get, giving clients the confidence that they are getting the most cost effective mortgage for them.
· Many mortgage brokers also offer advice on the house buying process; from suggestions on paperwork, to recommendations about house surveys and insurance. This reduces the stress and worry surrounding a house purchase.
· Mortgage brokers are insured and have a legal obligation to work in the best interests of the client, giving complete peace of mind to customers.
· Brokers can make the mortgage application process swifter – they know which lenders are quick and can also use their influence to encourage lenders to move the process along.
The early stages of house hunting is a prime opportunity for brokers to appeal to first time buyers, marketing the value of their services to ensure that all first time buyers have access to the best possible mortgage deals and advice. The key question is; how can you communicate these benefits to first time buyers?
1) Use social media
Surveys suggest that a massive 80% of adults aged 23-37 use Facebook regularly.[iii] With this age group making up a large percentage of first time buyers, Facebook (and other social media channels) appear to be a key advertising platform. Social media also gives advertisers the opportunity to show adverts to people with specific interests, meaning that adverts can be aimed at people right at the start of their house hunting journey.
2) Be personable
Mortgage broking is a person-centred job and it is vital that you are friendly, consistent and helpful; willing to go the extra mile for your clients. When people are looking for a mortgage broker, they will often ask friends and family for recommendations. As many first-time-buyers are friends with others who are about to take their first step on the property ladder, endearing yourself to all clients will pay dividends in having new clients referred to you.
3) Be available
An average first-time buyer is 30 years old[iv] and belongs to a generation that is used to instant responses and swift actions. To engage with them, brokers need to be able to respond quickly to phone calls, social media messages, e-mails and even live chat. If they don’t get a swift response, it is likely that they will move on to the next name on their list.
4) Find your team
The above ideas may sound like a time-consuming task. If you are a self-employed mortgage broker and don’t have hours to spend on social media or organising advertising campaigns, it may be beneficial to employ a mortgage administrator to help with some of these tasks. Alternatively, it could be strategic to become part of a team (or to expand your team if you already have one). A larger company will be able to finance marketing, leaving individual mortgage brokers to do what they do best – focusing on finding the best mortgages for clients. Specialist recruitment agent, Aston Charles works with a number of banks, building societies, mortgage brokerages and individual brokers. So, whether you’re a large company looking to recruit an experienced broker, or an individual looking to join a larger team, Aston Charles is an excellent place to start.
A win-win solution
Experienced mortgage brokers winning the custom of first time buyers is a beneficial situation for all. Brokers can enjoy an increase in custom and visibility of their brand, while first time buyers can save money long term and reduce the stress of a house buying process with the skills and experience of their broker. More first-time buyers using brokers will mean better mortgage deals for these customers and a boost in the reputation of the mortgage broking industry.
[i] First Time Buyers 2018: The Expectations and Realities of Owning Your Own Home.Yorkshire Building Society and You Gov. Page 25.
[ii] Rosie Murray-West. 2018. Financial Times – Most First Time Buyers Would Use a Broker Again. [ONLINE] Available at: https://www.ftadviser.com/mortgages/2018/05/11/most-first-time-buyers-would-use-a-broker-again/. [Accessed 7 August 2018].
[iii] Alison Battisby. 2018. Avocado Social - The Latest UK Social Media Statistics for 2018. [ONLINE] Available at: https://www.avocadosocial.com/the-latest-uk-social-media-statistics-for-2018/. [Accessed 7 August 2018].
[iv] Gemma Francis. 2018. Independent – First Time Buyers Average Age Has Increased by Seven Years. [ONLINE] Available at: https://www.independent.co.uk/property/first-time-buyer-age-increase-1960s-housing-market-cost-property-ladder-a8244501.html. [Accessed 7 August 2018].