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Hi, and welcome to this week's The Mortgage Broker Broadcast.
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I'm your host, Craig Skelton, and in recent episodes we've talked about building a sustainable business.
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Things like annual reviews, non-indemnity income, and working alongside financial advisors.
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Those themes were all about long-term planning.
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This week we need to switch things up a little bit.
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The war in Iran has pushed up energy costs, stoked inflation, and rattled the mortgage market.
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Lenders are withdrawing products, raising rates left, right, and centre.
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Many of you have spent the last few days firefighting, securing rates for clients before they banish and field in anxious questions from your existing client database.
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It's chaotic and emotionally draining.
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My message is very simple.
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When a crisis hits, it's okay to drop everything and look after your clients, but don't let that become your norm.
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I want to discuss what's happening, why quick action is necessary, and how good habits will help you get back on track afterwards.
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As always, the underlying theme is the same: running your own race.
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Resist the urge to copy what everyone else is doing, even in a panic.
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Ground your decisions in your values and your long-term goals.
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So, what is the current stone?
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Well, I'm recording this pretty much before it goes out.
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So if things have changed since yesterday, I can only apologise.
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But here's where it currently is at.
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The average two and five-year fixed rates have gone above 5% now, adding roughly£700 to£800 a year on a typical£250,000 mortgage.
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Hundreds of products have been withdrawn.
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Almost 700 deals have banished over the past couple of weeks, and more than 300 products disappeared in a single day.
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So that works out around a fifth of all residential products that have been pulled.
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Lenders are repricing across the board.
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Major banks and building sites have hiked rates for everyone, first-time buyers, home movers, remortgages, and even product transfers.
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Swap rates, the benchmark for fixed mortgages, spiked due to inflation fears, and lenders are adjusting with a lag.
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Rates that existed yesterday are gone today.
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And clients are reading these headlines and they're understandably nervous.
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This kind of environment demands quick decisions and clear communication.
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It's also worth remembering the scale of the remortgage market this year with around 1.8 million fixed rate deals coming to an end.
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Many of those borrowers were expecting rate cuts this year.
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Instead, they're looking at deals above 5%.
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At the same time, the Bank of England have held the base rate at 3.75% because of the fear that higher oil prices will push inflation back up.
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If inflation rises, then interest rates could follow suit with an increased layer on this year.
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All of this feeds into the urgencies that brokers are feeling right now.
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Why it's okay to firefight?
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So when products vanish and rates jump, you might spend your day calling clients whose deals are expiring, securing new rate switches, and rerunning affordability checks.
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You know, in this situation, firefighting is part of your job.
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You're protecting clients from a sudden jump in their mortgage, in their borrowing costs.
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We're urging our clients not to hold off.
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We're urging them to secure a rate today.
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And a good broker can secure a product now and move clients onto a better one if the market does improve.
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That means it's okay.
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It's reasonable to delay business growth, whatever that looks like for you.
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You're consciously prioritizing urgent client needs over other tasks.
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Know that, understand that, and accept that.
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And let that be okay for a short period of time.
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It's a sprint right now, not a lifestyle.
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So why firefighting can't be a lifestyle?
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Some brokers live in permanent crisis mode.
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Every case becomes urgent, and there's never time, there's never a time for business development.
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That is unsustainable.
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Constant firefighting leads to exhaustion and a sloppy service for your clients.
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You can't run on adrenaline forever.
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Without dedicating time for growth, working on referrals, planning your marketing, you'll eventually have no clients and have no pipeline.
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The brokers who handle chaos best are those with strong habits.
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They know which clients need action because their CRM tells them so.
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Load full transcript
They have templates, so they aren't reinventing the wheel under pressure.
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They're keeping regular contact so clients call them rather than panic.
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And if they've invested in admin support, they can focus on the complex conversations while someone else is handing all the paperwork.
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Habits let you switch into firefighting mode without everything else collapsing around you.
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So habits help even in a crisis.
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We've often talked about discipline and structure.
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Those just aren't buzzwords, they're resilience tools.
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Good habits give you visibility, consistency, trust, and leverage.
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Habits also give you confidence.
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You know where you are in each case.
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So you can make decisions quickly without second guessing.
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If your systems aren't where you want them to be, use this crisis as a bit of a diagnostic.
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Each time you say to yourself, I wish I had a process for this, write it down because then after the storm, build that process.
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Maybe it's a standard script for rate switching clients or a checklist for remortgage reviews or automated reminders six months before a client product expires.
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Time of crisis exposed weaknesses, but they also show you what really matters.
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Use this insight to create a business that serves you and your clients better.
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So, what should you be doing right now with your doing right now in this time of crisis?
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The first thing I'll be doing is reviewing my existing client database.
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We normally talk about six months before the deal ends, identifying those clients whose deals expired within the next six months.
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But I would change the timeline right that now to the next nine months.
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Reach out to them all, explain that rates are moving and changing quickly, and that they can lock in their new deal as early as six months.
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So explaining that, giving them that sort of trust and reassurance that you're around, you're looking after them, you're working around their needs, and that you will lock them in to the best rate they can you can at that six month mark.
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So, and then also reassure them that if markets improve, you will switch them to the better rate at that particular time.
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So just give them that reassurance to your existing clients that you're still around and you're going to get them the best deal.
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You also need to prepare your clients as
well.
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Be frank about the new reality that the two-year and five year fixes right now are going above 5%, and that the the four percent, the ones that start with four are really more or less gone now.
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So explain that why that's happening, rising funding costs are driving this, and that the volatility may continue and to be better to prepare for higher payments that than be surprised by that nearer when their deal's about to expire.
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It's also important to look after yourself and your business during this time of crisis and this time of urgency as well.
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Do not neglect protection conversations or your overall being.
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Rising living costs make protection far more important than they ever had before.
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And also, as well, it's about your well-being as well.
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Schedule in those short breaks, daily check-ins to avoid mistakes.
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Mistakes happen in times of urgency, panic, and chaos.
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You do not want mistakes to happen.
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You don't want to miss clients' deals.
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So make sure that you're taking time just to take a step back away from your business.
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And also, as well, it's important to plan now for when you'll return to normal business activities.
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When will you get on top of all this?
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When will you get back to normal normality?
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Is that Easter?
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Because having a date prevents firefighting from becoming your default.
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So it's so important to make sure that you've got a date in your mind when you think, actually, I'm going to get on top of all this, I'm going to get on top of my existing client database, and I'm going to get back to some normal, day-to-day run business.
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When is that going to happen?
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Get that date, get that date secured in your head.
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What also I would say as well is staying visible also matters well.
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If you're too busy to create new content, repurpose old posts, share quick updates, your followers, your connections will appreciate the consistency.
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And it reminds them that you're still there to help them at this time of need.
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And finally, remember that your existing client bank is your business.
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Even when the market is chaotic as the mortgage market is right now, keep your annual review schedule ticking over.
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Send quick check-ins to clients whose products aren't quite due yet.
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It's easy to forget these longer-term activities when you're firefighting, but they're they are what will keep your pipeline healthy when the current crisis passes.
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So just to wrap up, the mortgage market is in a bit of chaos right now.
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Rates are above 5%.
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Lenders are pulling, have pulled hundreds of products.
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Repricing is very, very rapid.
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In that environment, it's reasonable, even necessary, to drop everything and secure new deals for your clients.
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But firefighting is a sprint, it's not a business model.
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Use the experience to spot where your systems need work, then return to your routines.
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That's how you build a resilient business.
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That's how you build a resilient firm.
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Quick heads up on next week.
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I'm joined by Ross McMillan to talk about the Fear Academy, which I've been touching on in recent episodes.
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As always, thanks for listening.
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Thanks for subscribing.
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Thanks for watching.
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Please don't forget at this time to make sure you run in your own race.