Mortgage Broker Broadcast
Developing your knowledge to help you build a successful Mortgage Broker business. Craig Skelton shares his thoughts and experiences on all aspects of mortgage advice covering everything from operating in the banking world, estate agency based advisers all the way up to working as a self employed broker. He will be joined by experts from within the industry and other business sectors which all play a key part in becoming a successful mortgage broker in the modern world.
Mortgage Broker Broadcast
Unlocking Alternative Lending: Future Strategies for Mortgage Brokers in 2025 and Beyond
Discover the hidden potential of alternative lending solutions with Dave Coleman from Positive Lending as he unveils the evolving mortgage landscape and what it means for brokers in 2025 and beyond. With traditional mortgage avenues becoming more complex, the rise of second-charge mortgages and bridging loans offers exciting new opportunities for brokers to better serve their clients. Learn how overcoming outdated perceptions of these once-stigmatized solutions can transform client retention and revenue growth, ensuring clients have no reason to look elsewhere for their financial needs.
As we anticipate the financial shifts of 2025, Dave provides a fascinating glimpse into the future, highlighting an optimistic outlook among lenders despite looming challenges. Upcoming stamp duty changes might cause a flurry of activity, while the demand for equity release products is set to grow among older demographics. Explore the resilience of second-charge and bridging markets, even as commercial and development finance faces headwinds. Gain invaluable insights into adapting to these changes and leveraging them for business success.
Client retention takes center stage with innovative strategies for building trust and loyalty in an ever-competitive market. Uncover how brokers can maintain strong client relationships through consistent communication and a willingness to offer comprehensive financial solutions, even if it means partnering with others. This episode is packed with actionable insights designed to help brokers navigate the evolving landscape, ensuring long-term growth through repeat business and referrals.
Looking for one to one mentoring, visit my website to see how it works craigskelton.co.uk
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Hi and welcome to this week's the Mortgage Broker broadcast. My guest this week is Dave Coleman from Positive Lending, and Dave's a regular guest on the podcast. He was on the podcast earlier on this year, about February time this year, where he came onto the podcast and talked about his take on 2024. So I thought it was only good to get him back onto the podcast. It's the last podcast of the year, so this is the final one before we start 2025, so I thought it'd be good to get him back on just to talk about and get his take on 2025 what his thoughts on the market, the challenges facing and things like that. So yeah, that this week's guest is Dave Coleman.
Speaker 1:For those listening to this podcast, the mortgage brokergage Broker Broadcast, for the first time, I'm your host, craig Skelton. I have my own mortgage broker firm, but I'm also a mentor and coach dedicated to helping mortgage brokers and business owners navigate the challenges of self-employment and business growth. Before we get into the podcast, if you do enjoy this podcast, please leave me a review, please subscribe, please leave me any thoughts or comments. On whatever platform you listen to this podcast or watch this podcast. Your support helps us grow and reach more mortgage brokers and business owners who can benefit from listening to this podcast. So now let's just get Dave onto the podcast. So welcome back onto the podcast, dave. How are you?
Speaker 2:I'm all right. Thank you, mate. It's been a morning but it's good to be back, good to see you, always good to catch up. Yeah, trains, planes and automobiles. Maybe not planes, but it's been one of those days.
Speaker 1:The joys of commuting, given the time of year, and yeah. But the one positive? Well, there's two positive things. You've got your coffee, which is the main thing. But the second way, I'm loving that holiday sweater. That is a nice color, kind of going on. I sort of like the sort of the red, white and blue.
Speaker 2:No, I've got a uh, a team meeting after this with circa 35 advisors in it, and one of the briefs was to wear a christmas jumper, so I'm either being stitched up I'm in that Christmas jumper.
Speaker 1:I was just going to say I think that might be stitch up. I think you're going to burst into the room. There's a Del and Rodney, only Fools and Horses. When they go to that, wake in there. They've got the Batman and Robin and then they start waking. They burst through the room.
Speaker 2:One episode one episode.
Speaker 1:So thanks for agreeing to come back on. I just wanted to. I was looking back at um. You've been on the podcast a couple of times now and I think you said we're getting to this sort of tradition. You was on a bit late.
Speaker 1:You only in february this year, which we talked about the 2024 market and I thought it was just good timing, as we get to the end of the year, just for you to sort of come back on. Obviously it's great to see you and talk to you, as always, but just really get your. I've got my thoughts on the market for 2025 and what that, how that's looking, but I just thought it's good to chat, good to to you and and just really get your take on it with regards to what the, what the the new year has to offer for brokers. But just first of all, for those that don't know who you are and not listened to this podcast before or seen you on LinkedIn, I don't think there's a broker that hasn't seen you on LinkedIn, but do you want to just do a brief introduction?
Speaker 2:Yeah, of course Officially David Conrad, but Dave, head of Sales at Positive Lending. Positive are our master broker in the market, supporting everything specialist, so specialist products that you can't access or you need access into for supporting clients.
Speaker 1:Thank you for that brief introduction, do you mean? I normally say, can you give a brief introduction, then people give the life stories and then you sort of, but no content for the podcast, like why have you just done all that? But no, I appreciate that and it is like I said, said good to get you back on. We've not had. We normally have our buggy golf wars going on. So we, which we sort of missed this year because julia changed the day of the golfing event, I couldn't make it and um, yeah, vice and sort of things going on, so, yeah, missed our buggy war. So we've not had, and I normally see you at the annual golf event. So we'll have to see how that pans out now.
Speaker 1:Moving forward, now that julie is no longer, with open work and, um, whether that sort of anybody takes up the reins for that we will see. But uh, but yeah, just so, it was just really. When you look at sort of 2025 and the, the challenges, more importantly, first of all, let's look at this year. What have you sort of seen the key challenges that brokers are facing in 2024 from your business point of view?
Speaker 2:I think it's been a lot more challenging to place clients or get the clients exactly what they want via more traditional means. So if you look at business, levels from our side.
Speaker 2:Second-charge mortgages have just grown and grown and grown and it's not slowed down. I don't foresee that slowing down. I think that will probably continue into 2025 because of the USPs and the access that that gives the client to capital rates and what they need to do. And similarly with the bridging market. When you look at bridging overall as a product, what's massively changed? Nothing. A few tweaks here and there and lenders messing around with rates and stuff like that would break the market, but overall it's the relevance of the product in the market. And whereas Bridging historically was probably seen as a dirty word, it's really expensive. You shouldn't be doing Bridging whatever.
Speaker 2:More and more brokers in the market have had to open up to the fact of Bridging being a solution for their clients and also, I think, when you look at some specialist products, I suppose broadly, consumers are becoming more aware of what they are now and that opens up the conversation with their broker, say, Because typically if a client phones their mortgage broker, they don't phone up and go. I really love a bridge, I really love a second charge. They phone up and they go. I want 100 grand. How do I go about it? And the broker's job is obviously to try and find a route to suffice the client and get them a solution.
Speaker 2:But whereas all the eventualities that we've faced in the mortgage market with higher rates and client demographic and et cetera, et cetera, et cetera. It's not as easy to get the client exactly what they want via the means that they would have done maybe five years ago or such. So it has led into more conversations around specialty products and again this has been kind of my pitch really this year and again this has been kind of my pitch really this year. You know, brokers a few years ago were going yeah, okay, I need to know about second charge and I'll use it as and when required.
Speaker 2:This year the theme has been like Dave, can your team come and see me to talk about second charge? Because actually I need to understand more about it now because we're finding more further advances being declined or, you know, loan size being reduced and the client demographic has changed. It's my once vanilla clean client bank is now starting to experience stuff that's maybe not so clean, as a little bit of impaired credit or adverts or income affordability issues and stuff like that. So that's led into more than stuff that we do. So from a business perspective, it's been a good year for us. It's by no means been plain sailing. I don't think anything's been plain sailing in the mortgage market for some time, but it has meant there's been more traffic diverting into us to talk about alternative solutions, about how we can have clients.
Speaker 1:I think it's really good that you've got what you sort of said there. I was making a note of it just so I can make sure that we talk about it, because we talked before, when we first started doing this, about education of mortgage brokers and having this having second charges, having specialist lending in your toolbox as a mortgage broker, and I don't think you'll ever stop educating brokers on second charges, on specialist lending, lending full stop. I think it. Just I think your whether you accept that or not, dave I think that's just going to be part of what you and your team do constantly, because there's new brokers that come into the market. It doesn't really talk about specialist lending in CMAP or CFs or anything like that. There's nothing about it. Everybody's a first-time buyer, everybody's got 15% deposit, everybody's got no issues, get paid very well and their LTVs are all right, whereas the real world and more so now, and I'm hearing it a lot more is around the second-charge stuff and the specialist stuff that brokers need to be educated on and aware of just as much as they are mainstream, just as they are with protection, just as they are with.
Speaker 1:It needs to be there, and I think that it is good that firms are more, I think, as business owners. If you've got, if you're a sole trader, a one-man band, two-man band, then fair, like that's. It's always about education. That's there. I think it's hard to get into larger firms and principals, the large firms, because it's like, well, we're okay doing what we're doing, because they don't see it necessarily at the coalface of what's going on. They'll just know what cases are being placed and where they're going. They're not really. If they know the numbers really well, they might pay attention to it a little bit. But from what you're saying there, there's a lot more larger firms understanding that they need to educate the brokers that are seeing clients in this situation.
Speaker 2:Absolutely. I mean, you're absolutely spot on there, because it is a variation of the smaller advisor firm solo broker all the way through to multi-advisor firms, but also to firms that deal with more affluent client banks, because those clients, when their mortgage payment does change or they have a life event, it hits them harder than it would do your average Joe when they're doing it. It's all relative, but what we're starting to see is maybe the client bank that would historically never even consider the second-charge mortgage is now going.
Speaker 2:Actually I need to wrap up this debt because my mortgage payment's gone up by X amount of thousand and I've got this and I've got this. They typically tend to service their debt perfectly, but they sail closer to the window, so those brokers are now opening their minds to an accident. Second charge could be the best or maybe the only option here, actually, because I can't do what they want to do by traditional means. So second charge mortgages could help them and I think the overall theme with DebtCon as a whole is typically being the number one driver for second charge consideration.
Speaker 2:No surprise to be saying that, really, but the overall theme has what can I save on a monthly basis? How does that affect my cash flow? Because typically the broker will be back in front of that customer within 12 to 16 months typically 18, 24 months onwards or, when applicable, revisiting that to see if they can refinance it into a first charge mortgage again, because the label of the debt has changed or, you know, the client circumstances have improved and so on like that. But in the short term, no matter what life you're from and how affluent you are or not, you're looking at cash flow. How much money can I save on a monthly basis? How can I put some money back in the bank rather than it coming back out?
Speaker 1:I think it's like a good when you I never thought about that in terms of the, the affluent side of it, because I say your, your demographic of your client is changing from that point, because I would just say, expect it to be you always think especially second charge, that's. I think it's either people that are desperate situation and need the money, like bridging, and need that cash there and then, or it's the ones that are debt consolidation and can't afford the monthly or piecing the monthly together, managing the monthly payments, but need to structure it in a different kind of way. I never thought about it with regards to the more affluent clients that are, given the changes, the, the rates that we've had over the last 15 months or so, and we'll continue to do so. It's sort of it's managing that client's expectation into but giving them that it's again given. As a broker, your role is to give that client, the, an option for them and the solution for them.
Speaker 1:Doesn't matter what the scenario is. Maybe it doesn't matter whether it's a little bit more hard work for you and a little bit more time consuming to do your research and piece it together. You've still got to do that job, but that's where your specialist sort of comes into it. So, in terms of backup with that, how do some people if I've got you're obviously doing a presentation today to get-odd brokers Is that something that you're finding that you're doing is more of group sessions, two different businesses that you've done two before. The one-man bands of sole traders are always known about you because that's what they do day in, day out, but you're finding that more of the larger firms are now thinking, oh, we need to get Dave in here or one of your team to understand this a bit more.
Speaker 2:Yeah, absolutely. I mean you touched on a couple of the bits there. It's finding the offer, presenting an option or a solution to the client. Yeah, and this is a conversation I have with brokers all the time If a client gets in contact with them and they say they want to borrow, for example, £50,000, they look at a further advance. Now, if that's declined, well, then the obvious option should be consider a second charge. We know that doesn't always happen, um, but then if the client can only get 20 000 or further advance, the broker then can consider a second charge as an option and present them to the client, and the client then has the option to go. Actually I can work with 20 000, but no, actually I do want to 50,000 and the broker will come back.
Speaker 2:We need to go down a second charge. So I think there's two elements of it. One, it's providing the best solution for the client and giving them the option. So more brokers are opening up to that and realising that the second charge is a possible alternative to traditional borrowing. And the other side of it is obviously in tougher times, where the market is typically driven by PTs, it's a revenue generator for a broker and a firm, and I think broker firms overall have started to switch onto that, because they're servicing their client and giving the client exactly what they want and they're generating additional revenue in times where revenue is maybe not as forthcoming. And also then you've got the other side of it where you've got client retention, because if someone's on a sense of charge for whatever reason, within a period of time you're going to revisit that and you're going to refinance that, and I think you touched on something else there.
Speaker 2:When you put the word specialist into something, everyone goes, oh, adverse must be, dodgy, must be that. Actually, there was a poll that came out recently and actually I think it's something like 83% of second-charge business that has been written this year is clients that have got mainstream first-charge, high-street lender names. So they're clean clients. It's just whether it's failing affordability, it's the demographic for the loan purpose, it's you know the criteria the first charge lender doesn't allow. That's why it's driving into the second charge market, not necessarily down to the demographic of the client being dodgy or adverse or blacklisted or whatever you want to put a label on it. You know they're good clients, they think they're high street clients. It just means they can't achieve what they want to achieve via traditional means you said something there.
Speaker 1:I, when you was talking, I wrote down two words and then you said those two climate tension. That was that. That thing for me was it's all, and I've done a solo podcast a few weeks ago about client retention and we're going to talk about 2025. My thing for 2025 is all about client retention from day one. I think that's the big thing moving forward that brokers miss out on and the biggest opportunity for them. But you, like you, say it is all about client retention. Clients they want that, the solution to the issue that they've got, or what their needs are or what they're wanting to do. They want that solution.
Speaker 1:Now, if you're not able to go to and explore every option because you've got that mindset of specialists must mean adverse or something like, say, dodgy going on or something like that, then if you've got that mindset, that mindset needs to change.
Speaker 1:You have to change that way of thinking because, secondly, this specialist market is just growing. There's firms that I know and I talk to and I work with that have already started to look at having a specialist lending broker within their firm. So they've got somebody that they know and trust, and so all the people in the firm, the mainstream brokers, shall we say, for want of a better word, and that's not a better word but they have somebody that they know and trust to then go. Do you know what? Let's look at working with that individual to do this part of it and I'm still going to be looking after them for doing this. But then and I think it's just is all about client retention. You've got that client. You need to keep hold of them and not give them a reason to look elsewhere. And if you're not going to go and explore every option and go and give that commitment to that client to find them a solution, they will go elsewhere and you will never get that client back again.
Speaker 2:Yeah, you're absolutely spot on. I think from a client's perspective, as an average consumer, they don't know what a second charge is. They don't know what a bridge is. They might understand that they need a different mortgage on a commercial property than they do on their own home and stuff like that. But outside of that typically they don't know and that's why they've got a mortgage broker. So they're looking to them to come to advise. I think you take the bridging world. A lot of brokers historically have been put off by bridging because of the label that comes with it.
Speaker 2:It's deemed as expensive, it's deemed as all unregulated, it's all a bit dodgy but it's definitely not the market has massively changed and it's not expensive and there's a lot of different ways how you can structure bridging to get the client exactly what they want in more or in cheaper terms. But again, if someone's coming, to a broker and saying I need to do this.
Speaker 1:They're going.
Speaker 2:I think it might be a bridge bridge. You really shouldn't do that. The client walks out the door. They go to another broker who's switched onto it. That broker blocks that client forever. Whether they go for the bridge or not is irrelevant. But if the broker is presenting solutions, options for the client to transact, well then that conversation is do I want to go ahead with it, yes or no? But the broker has shown that they're able to facilitate that inquiry, not just a generic high street sort of residential mortgage et cetera. And that's so that they're thinking outside the box, they're showing them actually they've got more options to service their client and if that deal doesn't transact, you can bet that the next time that the client does find something that needs bridging they will go back to their broker because the broker has given them confidence they can. They can work in that arena.
Speaker 1:Yeah I absolutely. I think that's the. The thing to take away is that if you've got an inquiry and you let that client go with a no, I might sort of patent that or sort of get that branded. If you let them go with a no in my typical Yorkshire accent, then you are just it's just such a waste. And it's funnily because there's a broker that I know and where I've known for a long time and I work with him and with like been helping him with certain things with running his own business, and he sort of said that 90% of his business that he does is when they've been to other brokers they've not done their job and they come to him and go and that, and that was like he looked into this and he's sort of then thinking like we sort of see all the time of where the bank says no, you need to see a broker, because when the bank says no, this is all the difference between a bank and a broker. You could do the same sort of thought process of if you're letting that client go with a no, then you're not doing your job properly.
Speaker 1:There is, I know there's some clients where there's not an option. You literally know that there's not an option from pretty, pretty quickly. But you said I think it's not. The no should not be down to your lack of education or your lack of education or your lack of time or your lack of commitment for that client. It should just be because you cannot place it anywhere or refer it anywhere on. But if you're saying no and letting them go, you need to be looking at yourself and thinking where do I need to educate myself? It's then look, it's not the blame, then not blame is not the right word, but like the then responsibility. It's the broker's responsibility to find a solution for that client. If you're letting them go without fulfilling your responsibility, you're not doing your job.
Speaker 2:Exactly and this is another part of when I'm talking to brokers that I regularly speak about If you approached positive or whoever your partner of choice is in the market but it should be Positive and you've had the conversation to say, right, I've got this client. This is the scenario, and we turn around and go. There's nothing we can do on that, but sit tight for another six months and take time in that If they keep their face clean, then there might be something for them. The broker can go back and confidently go. You know what? I've explored everything for you and there is no option. But the end result of it is that they have a conversation and go yeah, that can be done, because that happens all the time, especially in bridging. They don't think I've got this inquiry. I'm really sorry to waste your time. I don't think you can do anything with it. 10 minutes later, yeah, okay, I'll get into the team. They'll come back to you in terms what you can do.
Speaker 1:It, yeah, yeah, there's definitely legs in this absolutely um and it's.
Speaker 2:But if they didn't have the conversation, they've just gone with a no and that client picks up the phone or speaks to another broker and the brokers run the business and I think in the current market.
Speaker 2:You can't. I think brokers can't afford to be losing clients in in a tougher market where things are just not as easy to transact on and everything's taking a lot longer. A lot of PTs going on, so a lot less commission to the broker as well. So I think all of those elements including offering a more well-rounded proposition to the client they're coming into play, which is why specialist is growing.
Speaker 1:So, in terms of we understand, like, obviously it's been challenging a few for brokers. It's good that you are getting more of your market share, shall we say from a, and your hard work and persistence is paying off. On the education piece 2025, what sort of is, have you got any thoughts around? I don't, my thoughts are but, like, have you got any thoughts around the market, any sort of things that concern you or challenges, or yeah, what, what's? I mean that's quite an open, that's very open converse.
Speaker 2:Open question dave I apologize for that, but I think the one thing is that none of us truly know what's going to happen. Even the experts, the stand-upers I mean so many economists, experts, et cetera, stand-upers they all caveat going.
Speaker 2:This is just my opinion, because we all know that overnight something can happen and the world goes to pot and we all suffer as a consequence of it. But speaking to lenders, they all seem fairly positive about a better year next year. We've definitely had a much stronger Q4 to finish the year, which is a fantastic way to finish the year. More business is now looking to transact. The stamp duty changes next year will definitely have an impact on the market, so we'll probably see an influx of business trying to complete before that comes into place. But, like the stamp duty incentive really is going to be that that effectively will cause a bottleneck because the legals and the valuations etc are going to buckle under the pressure of that. But inevitably we probably will see that. How does that affect things once the stamp duty does increase? Who knows? It's definitely going to put people off, but then does the market dip to accommodate that. Again, there's many, many barriers, I think. From the point of view of second charge I don't really foresee that slowing down because actually, whilst first charge, mainstream high street lenders etc don't or only have an appetite for a certain demographic of borrowing and it's quite restricted, then it will lead into second charge. We have started to see more adverse come across in second charge and, although we can do the heavy stuff, it's the credit dips, it's the late payments Typically a client that historically is a good, clean client, but something's happened and they've missed a couple of payments here and there and further borrowing is just being rejected by their first charge lender. So I think we'll probably start to see more of that filter through. Bridging has stayed so competitively priced and such a buoyant market that I think we'll potentially see an influx of bridging to secure property again before certain changes come into the market. But again after that, what does that look like? Is bridging? Is pricing going to be affected and so on? I don't know, but for as long as I can remember, really over the last few years, bridging hasn't slowed down. It's stayed consistently busy and I think whilst the broker market and the consumer market both become more aware of that product, inevitably it will drive into it because there's more awareness around it and how it can work and so on.
Speaker 2:Like that, Commercial is huge. Commercial is really really, really busy at the moment. Very drawn out. There is no such thing as a quick commercial deal. I'd love to be proven wrong in every one that does hear that. But it's a very broad market.
Speaker 2:You've got your traditional land or clients now looking at maybe selling commercial properties as an investment. You've got business owners looking for certainty of security. You know if I give you an example when I'm talking. But if you look at what we do, for example we got kicked out of our office. And if we've got a laptop and we've got a phone and internet connection, we can do my job right. But if you're a mechanic or, you know, barista or whatever it may be, you don't have that luxury. So if there's uncertainty there and also with rental yields going up, so if you look at rent and consumer wealth, that's just going up on and up, with spirals getting more and more expensive month on month. That's the same in the business world as well. So then people are looking to go and actually, if I've got to turn mortgage on, am I better off financially? So I think there'll be more business directs into the commercial and semi-commercial world as well.
Speaker 2:Development finance overall I think has been a lot quieter for the simple fact that cost of funds are more expensive, cost of acquisition is more expensive and it just doesn't stack up a lot of times. As simple as that. The first-charge world for us has definitely spiked with activity. Sad reason more adverse, that is it. It's a sad reason to be busy, but that's exactly why those numbers are in the market to support those clients where otherwise they'd be stuck. They don't have a home and they're helping people achieve buying a home or refinancing, for whatever purpose it may be. And equity releases that kind of fell off a cliff last year because of obvious reasons rates went through the roof and so on, but that has recovered well and actually the equity release, or later life market as it's now being known, is very much untapped and you look at the amount of interest, only mortgages with no exit you look at the client demographic, they've got pension with no exit.
Speaker 2:You look at the client demographic, they've got pension pots that are no longer suffice for retirement, no longer cost of living, the clients that are at a certain age and they still have levels of debt outstanding. They've got no way of repaying it. It will drive into the market, so I think we'll see an increase in that. So obviously, if rates go through the roof again, that throws everything out the window. But assuming that things don't go too turbo on that side, then I think we should be in for a pretty good 2025.
Speaker 1:I agree with that. I'm making notes here in terms of certain things. That the first thing is, I 100% agree with you that nobody knows what the year is. You can talk to the economists you can talk to, obviously you can talk to. Obviously we've got the stability, if you call it stability, but we've got a new government kind of thing going on, so there's a bit of stability, but not stability with regards to that. But I think 2025 will be 2025. I think you can, just as a broker, you worry about what's in front of you. You can plan for the year ahead, certainly. You worry about what's in front of you. You can plan for the for the year ahead, certainly, but I worry about what's going to happen in quarter one and then worry about what happens in quarter two at the end of quarter one. That will be my. I think it's going to be good, a very normal year, but a good year for brokers.
Speaker 1:I'm making notes in terms of things like bridging, a huge, for there's a lot of brokers that I, once they get a bridging inquiry, they just think, oh, it's not something I can do myself. The instant reaction is just refer it, just get off my desk. I need it out of the way Rather than actually doing something with it. Where the options are, you get paid better on it. It's more education for you as a broker from a live example. So I wouldn't. I would say, if you do refer your bridging, speak to you about educate, speak to you about educating your knowledge in terms of what what bridging is like and then go through the process yourself so you understand that again with I never thought about the commercial side of things with the rentals and uh, we have seen as a a business, commercial inquiries increase. I agree with you, it's a very, very slow process. I don't know any commercial broker that says, oh yeah, it's quick. We think the house buying and the home purchasing transaction process takes some time. Try being a commercial broker and see what that world is really like in terms of that. But then it's good to get your take on the equity release or the, the later life stuff, because I've sort of seen an increase in that as well recently. There are more inquiries coming through.
Speaker 1:I think you're absolutely right. It's. It just goes back to options as a as a broker. If you've got a client that's coming to with an interest only mortgage at the end of their term and they've got no. And there are a lot of people that they've got no way out of, sort of they've got no chance of flipping it onto repayment. They've got no chance of there any other option apart from equity release.
Speaker 1:Then again, you've still got to make sure that you sort of educate yourself, but then making sure you refer it to someone who will go that extra mile and who does know a lot about the market. Definitely, definitely. I think it. Just when you look at what you've said there and reflect on what you've said there, dave, about 2025, there's nothing that I don't disagree with in terms of there still will be opportunities for brokers, but it's all about client retention. I'm not going to say that phrase again. Don't let him go with that with a no. But yeah, but it is all about retention, but and it's all about making sure you educate to every option that's in that you've got there yeah, absolutely.
Speaker 2:And listen, I think as a as a business overall. What positive do you know? I've got firms that do all their bridge themselves directly, which is I'm not there to take that away from them, but what they will do is phone me and go I've got this with this lender but apparently I can get better terms with you, or actually I can't access this lender or I've never used it before. So for a cleaner customer journey, can we send it over to you? And that may be ad hoc. You've got other brokers, as you touched on in the beginning, where there may be your entry to market and they haven't got the experience around it. So they'll refer to us, um or it's, you know, exclusive products that we can. We can better on for it. But I mean, even if you look at still, I think it was.
Speaker 2:It's been a few months since I checked it, but this year it was circa just shy of 80 percent of our directly authorized book preferred to refer bridging cases to us because it provided a cleaner journey for the client and because we're so low fee on what we charge. It has no detriment on the client. They're not paying hand over fist for us to provide the service on it and actually the broker doesn't really lose out on any commission. So there's that element of it as well. But that's not to say, you know, if brokers are doing it directly for themselves, then good for them. That's, you know, that's good. And actually I'm very much open to brokers going do you know what? I do a bit of this myself, because actually they're switched on. They're looking for ways to help their clients rather than being shying away from especially stuff exactly.
Speaker 1:I think that, and the thing is with referrals is that people sort of you tend to go right, I've referred it now and I'm not. I'll wait to hear back from the broker or the lender or the specialist who's looking after it. I'll don't speak to the client again, whereas you still need to be involved with the process. You still need to be touching base and finding out what's going on with that, with that particular client, because then you need to be integrated with that and if you're not and just say referral, pass on, don't need to worry about again. You need to change your process with that to think I do want to be more involved with it, I do want to understand what the what the client's got going on and I do want to know what sort of the, the, what's happening, kind of. So you are trying to educate yourself a little bit more.
Speaker 2:Yeah, absolutely, and I think that's the way as a business. I mean, it does differentiate between what permissions you do or don't have to advise or don't advise under your network banner or your club banner or whatever it may be. But we will speak to the broker and provide them headline terms before we've even engaged with the client to help add value from the broker's perspective.
Speaker 2:So they can present those terms and understand the product and how it looks and so on, like that, by the same time, the broker can refer it straight across to us and we'll speak to the client directly, but then we update the broker afterwards on what's happened, what the journey is. Now they've got numerous ways about how we communicate with both parties all the way through the application, so that everyone's fully aware of the journey from application all the way through to completion.
Speaker 1:And it's all about that service, that service that the client's chosen you as a broker. If you've got that lead in the first place, it tends to be about either some, the service that you've been promoting, and that's the thing with it is it is all about the service. If you, if you are integrated with the, even if you can't do it yourself, even if you don't want to do it yourself, but you're still following through the process, holding the hand with a client, they they don't know that that's any different, that they might be somebody else is actually submitting the application or sourcing the mortgage, or find that, or sourcing the lending, whatever that, but they don't see that. They just see that, yeah, that might be somebody else is going something that's going on the background and they're helping you with that, but then, the end of the day, they are still your client and then the more likely to stay with your client, even though you can't do it yourself.
Speaker 1:If you had to refer it because you've been integrated in the process with it, they'll still come back. They won't go to somebody else in two years time, a year's time, five, whatever the case may be, they'll come back to him. Go. Do you know what you helped me out before you got this solution for me. I need need another solution now, given my scenario, and I think brokers can lose sight of that, thinking oh it's off my desk, I've referred it, I'll not need to worry about it again. But the clients? Again? It just goes back to client service, client retention.
Speaker 2:Absolutely. Look at bridging as an example. Typically there is an exit. The only exit a lot of the time is refinance. So we're doing a lot of bridging for commercial acquisitions because commercial term is taking so long to facilitate. Actually, if the client's getting a good market offer, they're using the bridge to acquire, to safeguard that property and we're working on the commercial term in the background or the broker, whichever it may be. So the brokers that are switched on to it going right, the client needs to do this. But if I do a bridge, when can I exit them? I'll be working on the commercial or the term product in the background, whatever that looks like. So it is that client retention. There's a reason to have a conversation. And look at second charge as well. You look at second charge. If someone's going into a five-year fix, well, they're not going to not want to borrow money within that next five years, which is very unlikely. They're not.
Speaker 1:But they might not know that they can borrow money they might not realise that they can do it.
Speaker 2:They might have a life offender changing that. So again, those brokers that are doing the regular courtesy check-ups and it doesn't just lend into specialist lending.
Speaker 2:What we're doing it leads into wills, it leads into protection. It leads into wills. It leads into protection. It leads into all different barriers where brokers can increase their revenue by talking about these things. And we all know that conversations lead into. You know, more conversations lead into business Because if you have a conversation, you understand someone's wants and needs and then you go right, okay, well, you can't actually do that, what are you doing now? But that might lead to the same thing we do, or it might lead to another field of the market that you know the client's interested in exploring, or whatever else. But having those conversations generates business effectively and also takes care of that client because, for example, you know in a year down the line or five year fix, the client doesn't realise they can't do anything but another. You know, john, down the pub that they speak to their mate has gone.
Speaker 2:Well, I'm my mortgage broker just done this for me and they're going to speak to that mortgage broker inadvertently rather than their own well, that broker's just lost the deal through no fault, but I think, with a tougher market and with things not being this straightforward, brokers have started to switch on, rather than leaving it, six months before the products due to expire, of doing the courtesy check into how's everything going, anything changed and that kind of thing sort of you know the nice conversation rather than a sales conversation but inevitably oh, do you know what me and my partner are separating?
Speaker 2:okay, great, talk to me about that. And then the stuff. Because typically a client isn't going to pick up the phone to their broker and go just wrapped up. Loads of debt can helping external barriers to do so, but if you've broke the conversation, open that up, then it leads into a potential business. There might not be nothing you can do, but there might be um and again. If you help your client and find a solution for them, then you save them and then you've got a client pretty much exactly because they won't forget.
Speaker 1:Clients won't forget that. They give that snow about the made down the pub and whatever the client scenario is, if another broker's the forefront of the conversation because they did something that you didn't want or didn't talk about or didn't acknowledge or wasn't educated about and you had no knowledge of and just dismissed it, you're going to lose that client today but you're also going to lose. It's like everything. It's the or wasn't educated about and you had no knowledge of and just dismissed it. You're going to lose that client today but you're also going to lose. It's like everything. It's the knock-on effect of everything else. It's the lifetime of that client, the protection cases, the referrals that they get, like the referrals that they give.
Speaker 1:It's just, it's a big knock-on effect that one little thing might not seem very big today but over the lifetime of running a mortgage business, the lifetime of that client is costly. That you've not even the client's not aware of it, or they? They should be the forefront of their mind, thinking I need to speak. What if my broker does that? Not, I want to speak to their broker, because that's what their broker does exactly yeah, and I think yeah.
Speaker 2:Another conversation I have with brokers they say that if they're doing it themselves, and you know, that's actually fine, but if they're not doing bridging or sickness or something like that but advertising can do it, you don't need to be an expert. That's why you partner with us and you know if you need us to give you a little bit more meat to go back to your clients so you can have a more structured conversation with them about what that looks like and not the product straight before you've even spoken to the client, I can help you do that.
Speaker 2:But if you're not advertising it and they go to you as a broker and they go, does residential, does price nothing else on there but broker B down the road says he does self-charge, he does bridge it, he does commercial.
Speaker 1:I'm going to go and talk to them because my broker doesn't do it, it's human instinct.
Speaker 2:That's kind of what happens Exactly Getting the intermediary market open to the fact of don't be scared about it, you don't need to be expert. Some of them think it is. No, that's what we're here to support with. And then, on the flip side, if a broker is doing it directly themselves, they need access into someone or a second opinion or something. That's what we're here for too.
Speaker 1:Excellent, dave, I think I need to let you go and you've sort of taken up all of your time. We've been talking for 40 minutes and just chatting, again with no agenda, as we always do. It's been great to talk to you about it. I'm conscious in terms of your holiday sweater and you need to burst into that room next door and revisit the things we've just been talking about, funnily enough. So so, yeah, so, dave, thanks for agreeing to come back on the podcast. Really appreciate you sort of taking the time out of your busy time just to.
Speaker 1:And the messages that I'm getting from this are two things. One is about education. So if I'm looking to get educated as a sole trader small firm, large firm then I'll make sure people will be able to reach out to you on linkedin. I'll make sure all your your contact details are on on the podcast so people can easily reach out to you. And if, if you're a mortgage broker and they don't see your posts on linkedin already, I don't think I know one broker that. I don't think I know any broker that doesn't know who you are. So, um, yeah, the power of linkedin, shall we say so, um, yeah, thank you so much, mate. I really appreciate you coming back on and uh yeah, and also as well timing. So we've got um christmas and new year coming up, so you and family, you're always gonna be family, young family, and you're gonna to be busy over the um the festive period and then, uh yeah, all the best for 2025 yeah, thank you very much, mate.
Speaker 2:Well, I've um, I've managed to save some holiday inadvertently, just from being having a busy year, so I've actually got a couple of weeks off on the run to christmas, so it's going to be very nice nice.
Speaker 1:Well, enjoy your break, make sure you get a break, and then, uh, no doubt we'll catch up in the new year. Thanks very much, mate, for coming back on.
Speaker 2:Yeah, cheers buddy, Appreciate it.
Speaker 1:Thanks, dave, for being a great guest, returning guest back on the podcast and the final one of 2024. Thank you for listening. Thank you for watching this week's the Mortgage Broker broadcast. Thank you for watching and listening. If you have done so for the other episodes of 2024 and if you found today's episode helpful or any other episode of this podcast, please subscribe, please leave me a review, please leave us any thoughts or comments. On whatever platform you listen to or watch, this podcast just helps us to reach more mortgage brokers and business owners who may benefit from listening to this weekly podcast. And if you are thinking about becoming a self-employed mortgage broker or looking to start your own mortgage broker brand and business, or just looking to accelerate the growth of your existing business, visit my website, craigskeltoncouk. Schedule a discovery call or just simply get in touch and let's explore how I can help and support you achieve your goals in 2025. Stay motivated, stay focused, stay positive and don't forget to run your own race.