Extensive research by GMAC-RFC, the UK's 15th largest lender, shows that there are huge opportunities for intermediaries as Britons turn to the home rather than equities for sound investment security.
In a nationwide survey, findings revealed that nearly three quarters of people (72%) selected their home as a good investment in the current financial climate whilst just 35% said ISAs and less than a quarter (24%) said a pension. 82% of 35-44 year olds thought their home is a good investment and even the target ISA market of 45-64 year olds thought overwhelmingly that their home is a more solid investment than ISAs.
Gina Collman, Head of Corporate Communications at GMAC-RFC, says: "Our research and feedback from clients tells us that the British public has lost confidence in equities and that the home is now extremely appealing as an investment. We are not just talking about people with additional houses or those involved in buy-to-let. In the run up to the ISA season, the average man in the street has greater confidence in the value and assets of his own family home than in ISAs and shares. This provides a great opportunity for intermediaries as borrowers search for the best mortgage deals so they can fully appreciate their investment potential by not paying over the odds each month."
GMAC-RFC's research goes on to show how people feel about the possible returns from their investments over five and ten years. Well over half (57%) of people believe their home will provide a better return over five years, compared with just 19% for ISAs and only 10% for stocks and shares. Over ten years, half of the respondents (50%) believed their home would provide the best returns.
GMAC-RFC's research also revealed that if they had an unexpected windfall of £7,000, more than half of Brits with a mortgage (51%) would make improvements to their home. Well over a third (39%) would pay off some of their mortgage and less than a quarter, only 24%, would invest in an ISA. Gina Collman commented: "The keen interest Brits show in home improvements also has an advantage for intermediaries as people look to remortgage in order to fund the improvements."
The research shows, however, that over half (53%) of people would rather cash in their ISA to fund home improvements, whilst less than a third (28%) would remortgage. Collman comments: "People think it is much easier to cash in an ISA than remortgage a property. Figures from the Council of Mortgage Lenders state that 38% of lending last year was for remortgaging but our figures suggest that it is a case of a few people remortgaging very often rather than a general trend for all borrowers to review their mortgage regularly. This is again where intermediaries can be of help to their clients by explaining that remortgaging does not have to be a difficult or time consuming process."