As remortgaging opportunities approach, industry experts on this year’s FP Show BTL panel agreed that higher fees will help the market function and assist clients with refinancing.
Despite some initial criticism, higher fees have proven to be the key innovation that will enable lenders to seize upcoming remortgaging opportunities, according to panellists at the FP Show 2024.
The panel which was chaired by Nicola Firth, CEO at Knowledge Bank and included Liz Syms, CEO at Connect Mortgages and Connect for Intermediaries, Carolin Mirakian, sales and marketing director at UTB, Andrea Glasglow, sales director at HTB, Karen Rodrigues head of sales at Market Financial Solutions, Jason Wilde, head of sales at Paragon Bank and Alex King , executive director at Lendco, convened to discuss how BTL lenders can establish a USP to differentiate themselves in the highly competitive remortgaging market ahead.
Liz Syms said following the Truss tenure as PM those customers locked into higher two-year fixed rates that are now set to finish in a lower rate environment, offering even greater prospects for providers.
She highlighted the difference in the market then compared to now, as there was a time when customers faced challenges when approaching remortgaging as rental incomes couldn’t cover the increased monthly payments.
Highlighting the differences between the market then and today, Liz said there was a time when customers faced challenges when approaching remortgaging as rental incomes couldn’t cover the increased monthly payments.
However, conditions have improved; lower interest rates and rising property prices have increased rental income, easing the pressure on borrowers. Though, higher fees have emerged as a very effective solution, she said.
“Lenders did get slated a bit for large fees, but that was an innovative solution to help the market when it needed it” said Liz.
Alex agreed that higher fees are one of the smaller but more effective innovations that many lenders are willing to adopt to support market function and help customers refinance.
Jason recommended that when considering higher fees, lenders should consider striking a balance between rates and fees to meet diverse client needs.
“We tend to offer a range of products, some with high fees, low rate — for every landlord or broker, we speak to who doesn’t want a product that’s got a high fee, there’s someone who wants one that’s got no fee,” he said.
