THE MORTGAGE AND ECONOMY SURVEY RESULTS SUMMARY

Transcription

1 THE MORTGAGE AND ECONOMY SURVEY RESULTS SUMMARY Intermediary thoughts on the future of the industry post Brexit. For professional intermediary use only.

2 Overview The Big Question; How do Intermediaries think Virgin Money should adapt their proposition in the wake of Brexit? To understand; How do intermediaries feel about the future of their industry? Where does Brexit feature among concerns? What type of products/buyer are most likely to be affected and in what way? What type of support do intermediaries require from Virgin Money? Our approach; A bespoke research survey was created (appendix 1) and deployed via the Intermediary Exchange Output; A report and infographic to be shared with intermediaries via our Exchange community 2

3 Executive Summary The Big Question; How do Intermediaries think Virgin Money should adapt their proposition in the wake of Brexit? Brokers believe the mortgage market is stable and although the uncertainty of Brexit is a concern, it does not drive their outlook on the future of the industry They are more concerned about the more tangible impact of legislation changes (BTL and base rate changes) When questioned, the main impact of Brexit so far is the prevalent uncertainty, which has an impact on consumer confidence They feel it has caused people to hold off selling meaning fewer properties on the market. This could also mean that whilst other products may go down, remortgaging may increase Virgin Money need to support them through the uncertainty with products, market intelligence clearly disseminated, customer service and regular updates to changes on policy 3

4 Despite some uncertainty, brokers feel stable regarding their industry s future. Reactions to Brexit is not driving optimism or pessimism How optimistic are you about the future of the mortgage industry? 49% Optimistic 44% Neutral 7% Pessimistic Need for good advice remains strong Low interest rates Affordable products People in general are more optimistic which means they are more likely to consider for example moving home/ carrying out home improvements. Mortgage deals /products are at the lowest rates I have ever experienced which means it is usually possible to save client money when their current deal ends or reduce their Mortgage term. BTL slow down is balanced with uplift in other areas Uncertainty related to unknown impact of recent political events Shortage of property Any political impact is temporary until it becomes the new norm. Buy to Let has slowed with the new Stamp Duty and tax rules but these could change again at any time. Residential has slowed following the decision on Europe but people will get back to their lives soon enough. it is not so much Brexit that seems to be the problem more the way it is being dealt with. The sooner people know where they stand the sooner they will move on. Does not seem to be much confidence with clients at present and lack of houses on the market. Most people seem very unsure of things. Q1. How optimistic are you currently with the future of the mortgage industry? Base: 57 Q2. You mentioned that you are [ANSWER] about the future of the mortgage industry. Please tell us briefly why that is. Base: 57 4

5 Brexit does not feature among concerns that have had a significant impact on the brokers businesses What impact do you think each of the following events has had so far? Changes to stamp duty EU referendum result Base rate change Positive impact (top 2 box) 4% 9% 54% No Impact 18% 49% 42% Negative impact (bottom 2 box) 79% 42% 4% Negative impact Positive impact Stamp duty change Brexit New Prime Minister Help to Buy ISA Base rate change Q3. Below is a list of events this year. Please let us know how you think each one has impacted your business so far. Base: 57 Q4. And for the same events, how much do you think each one will impact your business over time. Base: 57 5

6 Thinking specifically about Brexit, prevalent uncertainty means intermediaries are still unsure of the potential tangible impact What impact has the referendum had on your business so far? Positive impact (top 2 box) No Impact Negative impact (bottom 2 box) 9% 49% 42% Brexit so far has no major impact other than a little more confidence from buyers who were waiting for the result. Over time, it may reduce the demand on house building. The terms of GB leaving the EU will take many years to negotiate resulting in more prolonged uncertainty over the economy in general. This puts uncertainty in the money markets and clients perception on the future of the housing market slowing with possible price falls. What impact will the referendum have on your business? 9% 54% 37% Q3. Below is a list of events this year. Please let us know how you think each one has impacted your business so far. Base: 57 Q4. And for the same events, how much do you think each one will impact your business over time. Base: 57 Q5. For the rest of the survey we will ask you a few questions specifically about Brexit. Please explain briefly what impact you think Brexit will have and why? 6

7 Uncertainty could mean brokers are more likely to sell more Remortgage products, with FTB and Moving Home more likely to decrease 63% of brokers feel that house prices will not change as a result of Brexit, but uncertainty has led to fewer properties and people being more hesitant to sell, which has implications for each product Brexit impact on housing market Brexit impact on mortgage products 46% of brokers agree Brexit has led to fewer properties on the market 51% of brokers disagree that first time buyers have increased as a result of Brexit 64% of brokers have seen a decrease in Buy to Let products (33% no change) 33% of brokers have seen a decrease in First Time Buyer products (51% no change) 53% of brokers believe people will hold off selling their properties 49% of brokers recommend fixing more since Brexit 42% have seen a decrease in Moving Home products 37% have seen an increase in Remortgage products (53% no change) (58% no change) Q6 We know it s difficult without a crystal ball, but what impact do you think the Brexit result will have on house prices in the area you work in? Base 57 Q7 Now thinking about different types of mortgage products, how much do you think the referendum result has impacted the number of people requiring each of these products so far? Base:57 Q8 How much do you agree with the following statements? Base: 57 7

8 End customer concerns reflect intermediary suspicions around uncertainty Uncertainty leads to insecurity Lack of concern or optimism for future Clients do have concerns as they feel the future is more uncertain following Brexit, a lot of clients wish to secure longer term fixed rates in view of uncertainty over Brexit and what it may bring Will I have to move back to my country? Will I be able to get a mortgage after Brexit? What does Brexit mean? When the results were first announced I had 2 clients pull out of purchases but nothing recently They are concerned about the uncertainty of it all Many of my clients are based in The City and feel they may have to move abroad. I had 1 client withdraw from a purchase as they felt property prices would fall Just that they are unsure of things and the future. But things will equal out and I think we will be better off in the future - but this will probably take a couple of years! None specifically, but Brexit hasn't started yet, when it actually comes in (if it comes in), it may be a different story. Foreign owned banks say make decisions, which British owned bank naturally feel compelled to follow, tricky times. Professional & Commercial are concerned and uncertain. Private and Residential relatively unconcerned but most read "The Sun" or "The Mail" and are being deliberately mis-informed. There has been no concerns from clients at present re Brexit around the mortgage market Q10 Please use the box below to share any concerns you have heard from your clients about Brexit. Base: 57 8

9 Support from Virgin Money should continue to focus on competitive products, market intelligence and customer service I look to suppliers like Virgin Money for support on how to sell mortgages in a post Brexit world 39% Agree What kind of support do you expect from Virgin Money in the wake of Brexit? Weekly contact ( is good) reminding me of products and unique selling points. Updates in advance, offering good support by keeping our BDMs on the road. Talking to us finding out what the clients and brokers think after all we are the ones out at the client facing side. 39% Neither agree nor disagree None new. You are not a political animal and nor should you try to be. Good value products, well priced with a great support team is what you need to focus on and not just because of Brexit. As much marketing support as possible, plus improvements in some of the more onerous parts of underwriting. Like silly P60s. 23% disagree Updates on changes caused through regulation change and how this will be to transferred or affect the daily running of our business. Continue to offer higher LTV schemes. Don't cause the market to stagnate by the fear that it might stagnate. Brexit fears could become of selffulfilling if we allow them to. Q8 I look to suppliers like Virgin Money for support on how to sell mortgages in a post Brexit world. Base: 57 Q9 What kind of support do you expect from Virgin Money in the wake of Brexit? Base: 57 9

10 Appendix 1 Question Number Question Ref Survey Questions Rating Scale How optimistic are you currently with the future of the mortgage industry? Q1 Optimism Very Pessimistic - Quite Pessimistic - Neither optimistic nor pessimistic - Quite Optimistic - Very Optimistic Single choice Q2 Reasons behind You mentioned that you are [%((Answer)Q1_optimism.GetSelectedAnswers()[0]).Html.ToLower()%] about the future of the optimism mortgage industry. Please tell us briefly why that is. Open end Below is a list of events this year. Please let us know how you think each one has impacted your business so far. Q3 Event impact - The referendum result to leave the EU - The stamp duty increase in April - Decrease to the UK interest base rate in August - Theresa May becoming Prime Minister in July - The introduction of a Help to Buy: ISA Single choice slider grid Now for the same events, how do you think each on will impact your business Q4 Future impact Q5 Brexit opinion Q6 Impact on house price - The referendum result to leave the EU - The stamp duty increase in April - Decrease to the UK interest base rate in August - Theresa May becoming Prime Minister in July - The introduction of a Help to Buy: ISA For the rest of the survey we will ask you a few questions specifically about Brexit. Please explain briefly what impact you think Brexit will have and why? We know it s difficult without a crystal ball, but what impact do you think the Brexit result will have on house prices in the area you work in? - House Prices will go up - House prices will stay the same - House Prices will go down Single choice slider grid Open end Single choice 10

11 Appendix 1 Question Number Question Ref Survey Questions Rating Scale Now thinking about different types of mortgage products, how much do you think the referendum result has impacted the number of people requiring each of these products so far? Mortgages: Q7 Impact on different products - Remortgage - Buy to Let - First Time Buyer - Moving Home Options: Single choice grid - I ve seen much fewer people request this product - I ve seen a few less people request this product - Number of requests for this product have remained the same - I ve seen a few more requests for this product - I ve seen much more requests for this product - This is not a mortgage service I provide How much do you agree with the following statements? Q8 Attitudes - First time buyers have increased since Brexit due to better value properties - I look to suppliers like Virgin Money for support on how to sell mortgages in a post Brexit world - The number of properties on the market has decreased since Brexit - I recommend that people fix their mortgage rates more since Brexit - In a post Brexit world, mortgage buyers will have fewer options - People will hold off selling their properties - I have fewer international buyers coming to me Single choice grid Q9 Support from VM What kind of support do you expect from Virgin Money in the wake of Brexit? Open end Q10 Client Concern Please use the box below to share any concerns you have heard from your clients about Brexit. Open end Q11 If you have anything to add about the economy, Brexit and your business, please use the box below. If not, please skip the Other Feedback question to end the survey. Open end 11