Social Mobility and the role of the mortgage broker
We live in uncertain, volatile times and the need for robust, sage advice has never been greater. 'Social mobility', that 'cause celèbre' of past Conservative governments has once again come to the fore.
Interestingly the last time 'social mobility' was actively encouraged coincided with the liberalisation of the mortgage market in the 1980s. Banks unleashed new and numerous products, and the new centralised lenders arrived, focusing on niche customer segments such as the self-employed. Mortgage brokers have gone on to overcome significant challenges since then and establish themselves as the main distribution channel for non standard mortgage customers.
But the backdrop has changed significantly. We work and live in significantly different ways now and have different issues to contend with when trying to secure mortgage finance. Issues brokers know only too well and challenges many lenders are still trying to get to grips with 'First-time Buyer' and 'self-employed' are two good examples of labels that mean very different things to the people who use them. Equally, they all encompass a broad church of borrowers with distinct and different circumstances.
First-time buyers encompass many potential borrowers who qualify for help but don't necessarily even know about it. They may have previously owned property earlier in their lives, have been divorced, or have been made redundant. They may for a variety of good reasons have been renting for some time. Demographically and economically the notion that there is a generic 'First-time Buyer' is questionable.
The self-employed represent another burgeoning market that needs advice. Some lenders still struggle to assess people who are self-employed, in part, because the category covers so many different business types, and different levels of income.
If 'social mobility' is a real aim of our policy makers, then all the wheels in the housing chain have to be able to turn - for the first-time buyer, last-time buyer, and self-employed. Regulation and our evolving economic environment has meant that the advice market has matured. Lenders need brokers more than ever to pre-screen applications as they will usually have a good knowledge of which customers are likely to be successful with which lenders. Technology may help lenders with vanilla lending, but the shifting landscape of employment status, credit histories, and affordability, means that there are increasingly good lending opportunities that do not fit the typical 'high street' model. Brokers are the key to unlocking these opportunities.
If you have any other queries you'd like to discuss with us, please don't hesitate to get in touch with our Intermediary Support Team by calling 0345 602 2338 or via webchat (Monday to Friday, 8am to 6pm).
This information is for use by authorised mortgage intermediaries only and should not be relied on by customers.