Brokers are under intense strain as lenders pull products at short notice, leading to hours spent queuing on lender systems to lock in rates
When lenders raise rates with little warning, the workload for mortgage brokers can become overwhelming fast. Rhys Edwards (pictured top), mortgage consultant at Brooks Financial, knows the pattern well, and says the pressure on advisers during rate hike periods is something clients rarely see.
"The immense pressure that brokers come under when these rate hikes hit is very difficult," Edwards told Mortgage Introducer. "The amount of pressure it puts on a broker that's trying to manage all their clients' needs, especially those looking to try and secure rates early, those that are concerned, add significantly more hours to a broker's day and week."
With more than two decades in the industry, Edwards describes a market that has become faster and more reactive, driven by the volume of information now available to both clients and advisers alike.
Queuing on lender systems
The backdrop is a fortnight in which Halifax, Nationwide, HSBC, and Santander all raised mortgage rates – some twice over – as swap rates climbed on the back of rising inflation and oil prices. Each repricing cycle opens a narrow window to secure deals for clients, and missing it is not an option.
"In the past, I've logged onto a lender's system to try and secure a rate," Edwards said. "I've been in their queuing system for five or six hours waiting to go through, taking me well outside of normal working hours. I'm trying to secure a number of lenders' systems, and they'll glitch out, you'll get kicked out, and then you queue again."
The situation becomes particularly acute when multiple commitments are running simultaneously. "You'd be logged in on one page doing one thing while you're doing something else with somebody else at the same time, when you've got a number of things to do within a short timeframe because you can't let anybody down. It's extremely stressful, and it's one of those things a bit like firefighting, in essence."
It is a pressure that mortgage professionals across the UK market will recognise during any sustained period of rate movement.
Notice periods: better, but not enough
Lender behaviour around notice periods has shifted in recent years, Edwards acknowledged. Some have made genuine improvements, but the pace of change still catches brokers short when caseloads are high.
"In the past, there have been banks that have given us a matter of hours' notice of rates changing. There are lenders that are committing to giving significantly more time to give brokers more time to manage client needs and get rates secured. But even with that, when you've got a lot of clients to help out, you certainly do feel the pressures."
The wider strain extends beyond individual advisers. "It's not just brokers, it's your backend admin staff as well that everybody ropes in when these things happen. It's often things that clients don't see or are not even aware of, the amount of work that goes into getting rates secured in these situations when the market's increasing so steeply. It's all hands to the pump."
What the market needs now
Beyond the operational challenge, Edwards said the housing market needs structural support if it is to stabilise. With continued rate rises deterring both buyers and sellers, he argued that government stimulus – rather than monetary policy alone – holds the key to any meaningful recovery.
"If anything, continued increases are going to slow down the market further. People are going to hold off selling and buying because they're worried about the cost of mortgages. There needs to be some kind of incentive, like something to do with stamp duty, because obviously the rates are what they are because of inflationary pressures. There needs to be some kind of housing stimulus, even more new houses being built. It all needs to come from that side of things to make it more attractive."
On the Autumn Budget, Edwards said he had seen little so far to suggest a meaningful intervention was imminent – though he stopped short of ruling one out. "Maybe I may have missed something, but there's nothing I've seen that I can see yet that looks to show any improvement, really."
He acknowledged, however, that the absence of pre-Budget noise may itself be a positive signal. "We are so much more reactive to information that's thrown out there. If it's wrong, then absolutely the reaction can be wrong. It could be good that something comes out that we didn't know of and gives the market a bit of a boost."
Edwards is candid about what a period like this represents for newer entrants to the profession. "It would be a very steep learning curve. In my 24 years of being a broker, you've gone from lenders giving you rates quite quickly, but there wasn't the information available. Whereas we do have a little bit of a heads up by looking at the swap rates these days to see if these things are coming."
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