A recent study reveals only half of potential homebuyers with adverse credit are seeking advice from mortgage brokers.
- The percentage of adverse credit buyers consulting brokers dropped from 58% to 50% since the previous survey.
- Family, friends, and online research are the primary means of finding a mortgage broker for these buyers.
- Access to exclusive lenders and the best market rates are key reasons for consulting brokers.
- Consumer preferences vary on paying broker fees, with motivations split among various factors.
In recent findings from the Pepper Money Specialist Lending Study, only half of potential homebuyers with adverse credit are currently seeking advice from mortgage brokers, a decrease from 58% in the prior survey. This shift suggests a need for increased engagement between brokers and customers.
Prospective buyers often rely on recommendations from family and friends alongside online research when searching for a broker, with 47% and 46% respectively choosing these methods.
A significant factor driving the consultation of brokers is access to lenders not directly available to customers, cited by 67% of respondents. Equally, the desire to secure the best market rates motivates 64% of these buyers.
Preferences for communication with brokers show face-to-face advice as the most popular (59%), trailed closely by email (58%) and telephone (50%).
There appears to be a diverse array of opinions concerning broker fees. While 38% of participants stated their willingness to pay is broker-dependent, 27% preferred brokers who do not charge fees, whereas 22% remain unsure and 13% lean towards working with a fee-charging broker.
Rob Barnard of Pepper Money notes the increase in consumer confidence among adverse credit individuals, with an estimated 1.76 million planning to purchase property in the upcoming year. Despite this confidence, Barnard emphasised the necessity for continued efforts from brokers and lenders to inspire more buyers to attain their mortgage goals.
Barnard highlighted that while the number of buyers consulting brokers has slightly decreased, the increased population with adverse credit offers abundant opportunities for brokers to assist financially recovering customers.
According to Barnard’s insights, the acknowledgement of the value of professional advice is gaining traction, with some buyers recognising that paying a fee could potentially guarantee more impartial advice.
Kate Fuller from the Mortgage Advice Bureau articulated the paramount importance of expert advice when undertaking what is likely the largest financial undertaking for most individuals. Fuller underscored how, despite often not being the initial choice, intermediaries play a critical role in facilitating around 85% of mortgage arrangements.
Fuller also expressed her views on the study’s potential to enhance understanding of consumer behaviour, while also reinforcing the essential nature of professional mortgage advice.
Although many with adverse credit are hesitant, the role of brokers remains crucial in aiding homebuyers.
