Head to Head: ASTL vs Key

With the award and event season now in full swing, it’s a great chance to talk to the great and good of our industry and to also celebrate those who are delivering excellence in our sector, which in turn delivers a better service to the end borrowers we all serve.

A common theme in these conversations has been the health of the ‘vanilla’ mortgage market and the concern that brokers solely operating in the mainstream arena will be squeezed by various market forces in the next twelve to eighteen months. Whether that’s just because of a low transactional market or the retention of mortgage customers becoming harder because of slick lender product transfer processes and the poaching by online brokers and the online aggregators.

I may sound like a broken record and I have worked in the intermediary mortgage market for most of my career so I fully understand the value of advice – but, how many consumers do? Are the above threats there because consumers generally don’t, or this is just a by-product of technology and consumer habits influencing customer behaviour in how they wish to take out and manage their mortgage?

I’d hazard a guess that it’s a combination of the two and so it’s clear to me that someone or some(body) needs to step up and ensure that the value of advice is not only understood by the regulators, but also those with mortgages and those who will be borrowers in the future. These may be those getting a mortgage for the first time, those seeking to raise money for their retirement, plus those looking to raise short term funds.

This is a perfect segue into my One to One feature this month, as both stories featured discuss the opportunities for brokers in short term lending and equity release.

First up is the announcement from the Association of Short-Term Lenders that not only three quarters of bridging lenders are confident about the long-term prospects for the economy, but that 72% said they expect their business to grow over the next six months.

They also reported that just over half of lenders (52%) said that they expect the market to grow in the next six months.

In such uncertain times, it’s good to see part of the market viewing the future positively and that growth is predicted and so I have scored this announcement highly in terms of newsworthiness, customer benefit and supporting brokers. Regarding the latter, I strongly believe that bridging finance is becoming a product that all mortgage brokers are now coming to terms with and understand its benefits to certain customers.

With regards to the news being innovative or game changing, the news itself isn’t, but the more positive narrative around bridging the better and so my scores are relatively neutral for both.

Our challenger this month are Key, who commented on ONS data which showed that households containing multiple families, which represents 1.1% of all households, were the fastest growing type of household over the last two decades. These households have increased by three quarters to 297,000 in 2019.

Key’s view was that the industry needs to increase the awareness of other options such as equity release for parents and grandparents to transfer wealth down generations.

I am inclined to agree with Key, that these figures show a worrying trend and so for raising these figures with a broker audience, I also rank this release highly in terms of newsworthiness, customer benefit and supporting brokers. Why the latter? Such products need to be provided with expert advice and hopefully we will see more advisers taking the revised qualification, as it’s clear demographics support an increased need over the coming years and decades.

The release isn’t innovative or game changing though and so looking at both announcements, I have to award a high scoring draw and I hope both items have given food for thought to brokers maybe not operating in these sectors currently, as both areas are ripe for growth.