Recent stats from the Council of Mortgage Lenders show that last year 360,000 people moved homes, meaning the number has stayed roughly the same for three years.
In some areas, such as greater London, the number of home movers fell to its lowest level for 25 years, highlighting the acuteness of the issue.
While estate agents across the UK are facing a shortage of properties coming on the market, many are supplementing their revenue with financial services. Research we carried out amongst estate agents in the South East, estimates that over 40% of home buyers don’t have a mortgage in place when they approach a branch and the majority of agents believe that the industry is missing out on mortgage sales.
Estate agents have a great opportunity to top up sales, by offering home buyer mortgages through a professional mortgage broker. However, whilst the large franchised agents have in-house financial services, many smaller agents may be missing mortgage opportunities because of poor service or a lack of opportunity.
Our research shows that on a scale of 1 – 10 (1 being extremely poorly and 10 being extremely good) estate agents rate their brokers just 6.7 for servicing their clients and themselves.
Agents may be using a broker that gives them, or their clients, a slow response and does not pre-qualify the applicants for them or keep them up to date on progress of the mortgage application.
This can result in taking longer to sell a property, or can mean putting forward a buyer that four weeks down the line finds out they cannot obtain a mortgage. Agents with poor performing brokers can miss out on mortgage sales and sales opportunities.
The recent changes to mortgage lending have led to an increase in the number of products on offer, such as those with longer payment periods. Some lenders will now lend to the age of 85 and beyond and other lenders will consider six times income.
These new mortgage products will drive up the number of potential applicants available to agents, provided that they have a mortgage broker that can process the applications quickly and efficiently.
*Darren Pescod is Managing Director of The Mortgage Broker Ltd