TRANSCRIPTION 🔗
WEBVTT
00:00:00.080 --> 00:00:02.640
Hi, and welcome to this week's The Mortgage Broker Broadcast.
00:00:02.799 --> 00:00:08.000
I'm your host, Craig Skelton, and in recent episodes we've talked about building a sustainable business.
00:00:08.240 --> 00:00:13.759
Things like annual reviews, non-indemnity income, and working alongside financial advisors.
00:00:14.000 --> 00:00:16.800
Those themes were all about long-term planning.
00:00:16.960 --> 00:00:19.359
This week we need to switch things up a little bit.
00:00:19.519 --> 00:00:26.719
The war in Iran has pushed up energy costs, stoked inflation, and rattled the mortgage market.
00:00:26.879 --> 00:00:30.960
Lenders are withdrawing products, raising rates left, right, and centre.
00:00:31.120 --> 00:00:41.679
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.
00:00:41.840 --> 00:00:44.560
It's chaotic and emotionally draining.
00:00:44.719 --> 00:00:46.079
My message is very simple.
00:00:46.320 --> 00:00:53.280
When a crisis hits, it's okay to drop everything and look after your clients, but don't let that become your norm.
00:00:53.439 --> 00:01:02.479
I want to discuss what's happening, why quick action is necessary, and how good habits will help you get back on track afterwards.
00:01:02.719 --> 00:01:06.959
As always, the underlying theme is the same: running your own race.
00:01:07.120 --> 00:01:12.000
Resist the urge to copy what everyone else is doing, even in a panic.
00:01:12.239 --> 00:01:16.560
Ground your decisions in your values and your long-term goals.
00:01:17.280 --> 00:01:19.040
So, what is the current stone?
00:01:19.120 --> 00:01:21.840
Well, I'm recording this pretty much before it goes out.
00:01:21.920 --> 00:01:25.200
So if things have changed since yesterday, I can only apologise.
00:01:25.359 --> 00:01:27.200
But here's where it currently is at.
00:01:27.359 --> 00:01:38.400
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.
00:01:38.640 --> 00:01:41.120
Hundreds of products have been withdrawn.
00:01:41.280 --> 00:01:48.079
Almost 700 deals have banished over the past couple of weeks, and more than 300 products disappeared in a single day.
00:01:48.239 --> 00:01:53.200
So that works out around a fifth of all residential products that have been pulled.
00:01:53.359 --> 00:01:55.680
Lenders are repricing across the board.
00:01:55.840 --> 00:02:04.879
Major banks and building sites have hiked rates for everyone, first-time buyers, home movers, remortgages, and even product transfers.
00:02:05.120 --> 00:02:12.639
Swap rates, the benchmark for fixed mortgages, spiked due to inflation fears, and lenders are adjusting with a lag.
00:02:12.960 --> 00:02:15.840
Rates that existed yesterday are gone today.
00:02:15.919 --> 00:02:20.639
And clients are reading these headlines and they're understandably nervous.
00:02:21.280 --> 00:02:26.400
This kind of environment demands quick decisions and clear communication.
00:02:26.639 --> 00:02:34.719
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.
00:02:34.879 --> 00:02:38.719
Many of those borrowers were expecting rate cuts this year.
00:02:38.879 --> 00:02:41.520
Instead, they're looking at deals above 5%.
00:02:42.080 --> 00:02:52.319
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.
00:02:52.639 --> 00:02:58.400
If inflation rises, then interest rates could follow suit with an increased layer on this year.
00:02:58.639 --> 00:03:03.360
All of this feeds into the urgencies that brokers are feeling right now.
00:03:03.520 --> 00:03:05.199
Why it's okay to firefight?
00:03:05.280 --> 00:03:16.400
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.
00:03:16.560 --> 00:03:20.080
You know, in this situation, firefighting is part of your job.
00:03:20.159 --> 00:03:25.039
You're protecting clients from a sudden jump in their mortgage, in their borrowing costs.
00:03:25.199 --> 00:03:28.000
We're urging our clients not to hold off.
00:03:28.080 --> 00:03:30.479
We're urging them to secure a rate today.
00:03:30.560 --> 00:03:37.840
And a good broker can secure a product now and move clients onto a better one if the market does improve.
00:03:38.479 --> 00:03:40.159
That means it's okay.
00:03:40.319 --> 00:03:44.960
It's reasonable to delay business growth, whatever that looks like for you.
00:03:46.159 --> 00:03:51.199
You're consciously prioritizing urgent client needs over other tasks.
00:03:51.599 --> 00:03:54.560
Know that, understand that, and accept that.
00:03:54.719 --> 00:03:57.759
And let that be okay for a short period of time.
00:03:58.000 --> 00:04:01.199
It's a sprint right now, not a lifestyle.
00:04:01.840 --> 00:04:04.719
So why firefighting can't be a lifestyle?
00:04:04.879 --> 00:04:08.000
Some brokers live in permanent crisis mode.
00:04:08.080 --> 00:04:13.680
Every case becomes urgent, and there's never time, there's never a time for business development.
00:04:13.840 --> 00:04:15.439
That is unsustainable.
00:04:15.599 --> 00:04:21.120
Constant firefighting leads to exhaustion and a sloppy service for your clients.
00:04:21.279 --> 00:04:24.160
You can't run on adrenaline forever.
00:04:24.480 --> 00:04:32.879
Without dedicating time for growth, working on referrals, planning your marketing, you'll eventually have no clients and have no pipeline.
00:04:33.040 --> 00:04:37.600
The brokers who handle chaos best are those with strong habits.
00:04:37.759 --> 00:04:42.240
They know which clients need action because their CRM tells them so.
00:04:42.480 --> 00:04:46.720
Load full transcript
They have templates, so they aren't reinventing the wheel under pressure.
00:04:46.879 --> 00:04:51.839
They're keeping regular contact so clients call them rather than panic.
00:04:52.560 --> 00:05:00.399
And if they've invested in admin support, they can focus on the complex conversations while someone else is handing all the paperwork.
00:05:00.560 --> 00:05:06.560
Habits let you switch into firefighting mode without everything else collapsing around you.
00:05:07.120 --> 00:05:09.439
So habits help even in a crisis.
00:05:10.000 --> 00:05:13.040
We've often talked about discipline and structure.
00:05:13.279 --> 00:05:16.639
Those just aren't buzzwords, they're resilience tools.
00:05:16.879 --> 00:05:22.000
Good habits give you visibility, consistency, trust, and leverage.
00:05:22.160 --> 00:05:24.319
Habits also give you confidence.
00:05:24.480 --> 00:05:27.040
You know where you are in each case.
00:05:27.199 --> 00:05:30.639
So you can make decisions quickly without second guessing.
00:05:30.800 --> 00:05:37.439
If your systems aren't where you want them to be, use this crisis as a bit of a diagnostic.
00:05:37.600 --> 00:05:45.279
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.
00:05:45.439 --> 00:05:56.560
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.
00:05:56.959 --> 00:06:02.560
Time of crisis exposed weaknesses, but they also show you what really matters.
00:06:02.800 --> 00:06:07.839
Use this insight to create a business that serves you and your clients better.
00:06:08.000 --> 00:06:12.240
So, what should you be doing right now with your doing right now in this time of crisis?
00:06:12.399 --> 00:06:16.079
The first thing I'll be doing is reviewing my existing client database.
00:06:16.160 --> 00:06:23.279
We normally talk about six months before the deal ends, identifying those clients whose deals expired within the next six months.
00:06:23.360 --> 00:06:27.120
But I would change the timeline right that now to the next nine months.
00:06:27.360 --> 00:06:35.920
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.
00:06:36.079 --> 00:06:48.639
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.
00:06:48.800 --> 00:06:55.279
So, and then also reassure them that if markets improve, you will switch them to the better rate at that particular time.
00:06:55.360 --> 00:07:01.920
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.
00:07:02.079 --> 00:07:03.759
You also need to prepare your clients as
well.
00:07:04.000 --> 00:07:16.399
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.
00:07:16.560 --> 00:07:34.160
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.
00:07:34.399 --> 00:07:41.360
It's also important to look after yourself and your business during this time of crisis and this time of urgency as well.
00:07:41.519 --> 00:07:45.759
Do not neglect protection conversations or your overall being.
00:07:46.079 --> 00:07:51.600
Rising living costs make protection far more important than they ever had before.
00:07:51.759 --> 00:07:54.000
And also, as well, it's about your well-being as well.
00:07:54.160 --> 00:07:58.319
Schedule in those short breaks, daily check-ins to avoid mistakes.
00:07:58.480 --> 00:08:03.040
Mistakes happen in times of urgency, panic, and chaos.
00:08:03.360 --> 00:08:05.360
You do not want mistakes to happen.
00:08:05.439 --> 00:08:07.360
You don't want to miss clients' deals.
00:08:07.600 --> 00:08:11.759
So make sure that you're taking time just to take a step back away from your business.
00:08:11.920 --> 00:08:17.839
And also, as well, it's important to plan now for when you'll return to normal business activities.
00:08:18.079 --> 00:08:20.240
When will you get on top of all this?
00:08:20.480 --> 00:08:22.959
When will you get back to normal normality?
00:08:23.120 --> 00:08:24.240
Is that Easter?
00:08:24.480 --> 00:08:29.199
Because having a date prevents firefighting from becoming your default.
00:08:29.360 --> 00:08:43.200
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.
00:08:43.360 --> 00:08:44.399
When is that going to happen?
00:08:44.559 --> 00:08:47.120
Get that date, get that date secured in your head.
00:08:47.440 --> 00:08:52.080
What also I would say as well is staying visible also matters well.
00:08:52.240 --> 00:09:02.240
If you're too busy to create new content, repurpose old posts, share quick updates, your followers, your connections will appreciate the consistency.
00:09:02.320 --> 00:09:06.639
And it reminds them that you're still there to help them at this time of need.
00:09:06.879 --> 00:09:11.600
And finally, remember that your existing client bank is your business.
00:09:11.759 --> 00:09:18.879
Even when the market is chaotic as the mortgage market is right now, keep your annual review schedule ticking over.
00:09:19.039 --> 00:09:22.879
Send quick check-ins to clients whose products aren't quite due yet.
00:09:23.120 --> 00:09:34.159
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.
00:09:34.320 --> 00:09:37.600
So just to wrap up, the mortgage market is in a bit of chaos right now.
00:09:37.759 --> 00:09:38.799
Rates are above 5%.
00:09:39.279 --> 00:09:42.320
Lenders are pulling, have pulled hundreds of products.
00:09:42.639 --> 00:09:45.200
Repricing is very, very rapid.
00:09:45.360 --> 00:09:52.480
In that environment, it's reasonable, even necessary, to drop everything and secure new deals for your clients.
00:09:52.639 --> 00:09:56.159
But firefighting is a sprint, it's not a business model.
00:09:56.320 --> 00:10:02.159
Use the experience to spot where your systems need work, then return to your routines.
00:10:02.320 --> 00:10:04.639
That's how you build a resilient business.
00:10:04.799 --> 00:10:06.720
That's how you build a resilient firm.
00:10:06.960 --> 00:10:08.399
Quick heads up on next week.
00:10:08.480 --> 00:10:15.519
I'm joined by Ross McMillan to talk about the Fear Academy, which I've been touching on in recent episodes.
00:10:15.840 --> 00:10:17.759
As always, thanks for listening.
00:10:17.919 --> 00:10:19.279
Thanks for subscribing.
00:10:19.440 --> 00:10:20.720
Thanks for watching.
00:10:20.960 --> 00:10:26.240
Please don't forget at this time to make sure you run in your own race.