Three-quarters of brokers don’t discuss second charge mortgages

Three-quarters of brokers do not tell their clients that they offer second charge mortgages, according to new research from Brightstar Financial.

According to the findings, only 26% of brokers revealed they had mentioned second charge mortgages to their clients during conversations to discuss their purchase or remortgage, or at any point during the term of their product.

The specialist distributor undertook a study among a group of 1,076 intermediaries, including different types of broker firms, IFAs, directly authorised brokers and appointed representatives.

Brightstar found the most common reasons given by advisers for not talking about second charge mortgages were that they did not have the time, or simply that they had forgotten.

“It’s now more than four years since second charge mortgage lending came under the same umbrella of regulation as the first charge market and brokers have been required to consider second charges alongside other options for capital raising,” commented Brightstar head of marketing, Michelle Westley.

“It’s astounding that so many brokers are still not having conversations about second charge lending with their clients.
 
“The good news is that this means three-quarters of brokers now have a great opportunity to boost their business levels as we move into next year. It’s widely anticipated that the purchase market will slow down in 2021 with the removal of Help to Buy and the end of the stamp duty holiday, but the second charge mortgage market is set for growth as demand increases from customers who want to release capital from their home.”
 
Enra Group CEO, Danny Waters, added: “It is understandable that the challenges presented by current service levels within the first charge market means mortgage intermediaries are likely to be experiencing increased pressure around operational capacity and resource.

“However, the option to outsource second charge advice and processing with specialist broker firms such as Brightstar, mean that second charges can and should still be considered alongside remortgage options to determine the best possible consumer outcome.”

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