The latest Pepper Money Specialist Lending Study has revealed that half of potential homebuyers with adverse credit (50%) say they would speak to a mortgage broker for advice on getting a mortgage.
This is slightly down from the last study, when 58% said they would speak to a broker.
The research found the most popular ways of finding a broker are through recommendations from family and friends (47%), while 46% said they would use online research.
According to the study, the ability to access lenders that aren’t directly available to customers is the most popular reason for speaking to a broker (67%), but close behind is finding the best rate in the market (64%).
59% of customers favour face to face advice, according to the research, close behind were email (58%) and telephone (50%).
The study found that people are divided when it comes to whether they would want to pay for mortgage advice. Nearly 4 in 10 (38%) said it would depend on the broker, with 27% saying they would prefer to use a broker who doesn’t charge a fee. A further 22% said they didn’t know and 13% said they would prefer to use a broker who does charge a fee.
The 2024 Pepper Money Specialist Lending Study is available to download now at https://www.pepper.money/file/Specialist-Lending-Study-2024.pdf
Rob Barnard, Director of Intermediary Relationships at Pepper Money, said:
“The latest Pepper Money Specialist Lending Study should make encouraging reading for brokers. There’s been a significant increase in consumer confidence year on year with 1.76 million people with adverse credit planning to buy a property in the next 12 months. However, there’s still more work for brokers and lenders to do to encourage customers to realise their mortgage ambitions. Especially when you consider the number of customers with adverse credit who say they would speak to a broker for advice is slightly lower than last year. Although it’s still a significant number and the growing number of people with adverse credit should mean there will be plenty of chances for brokers to help customers who have slipped up in their finances.
“According to the research, it seems people are realising the value of professional advice, with the results of the study indicating that customers aren’t put off by paying a fee to a broker for their services. In fact, some would proactively prefer to pay a fee as they believe it would secure them more independent advice.”
Kate Fuller, Business Principal at Mortgage Advice Bureau says: “For most people, a mortgage is the single largest financial commitment they’ll ever make, and so professional advice is vital for all customers, particularly those who have adverse credit. This is why the percentage of mortgages arranged through intermediaries is so high and growing. So, while it’s encouraging that half of customers say they would speak to a broker. I personally believe this number should really be much higher. The study highlights although an intermediary may not be their first point of call, it is not surprising it is ultimately where circa 85% will end up. For me this is one of the many reasons why the Specialist Lending Study is so important. It helps us, not just to better understand customer behaviour, but also to raise awareness of the options that are available and the crucial role of professional mortgage advice.”
