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Project Athena: Consumer Insight & Perception
There is often precious little time to take a step back and process events which took place over any given period of time, especially in terms of how these events may have impacted your customer base, their behaviours and future outlooks.
Transition
After overcoming the initial shock of the pandemic, the whole mortgage industry experienced a sustained period of 100mph lending. Business was coming in from all angles due to pent-up demand and the stamp duty holiday incentive.
That surge was over two years ago and we are now operating in a vastly different economic landscape where borrowing demands have changed; interest rates have risen substantially and people across the UK are having to find ways to cope with rising living costs and a multitude of other factors.
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Project Athena
With this in mind, it was telling that the results of a research paper called Project Athena – carried out in collaboration between Pegasus Insight and Mortgage Marketing Forum – which highlighted that rapid rate changes are causing stress and huge inefficiencies for mortgage intermediaries.
According to the study, 61% of consumers believe that it is not a good time to be looking for a mortgage, while a larger proportion –73% – have had to make cutbacks on expenditure amid economic and market conditions.
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Perception
Whilst this makes for some interesting insight, it also bears thinking about how many of these consumers thought it wasn’t a good time to be looking for a mortgage because:
- a) this was simply the perceived impression from the media.
- b) people thought they might not get approved for a loan because of problems with their credit (both recent and in the past), the way they earn money (like being self-employed, a contractor, or having different income sources), having a low credit score, or being close to retirement age.
- c) they hadn’t spoken to a mortgage intermediary about their options.
Divergence
In the last year, the number of home loans has dropped, mainly because 'mainstream' transactions have decreased. However, the specialised housing market, which is less affected by interest rate changes, has stayed strong. This is because experts in lending, such as Foundation, are actively helping people find the best options, within this sector. And the doors of specialist residential lenders will remain open and accessible for a greater number of credit-worthy borrowers as we move into 2024.
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*This article was originally published on Financial Reporter
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