2021
9
UK Mortgage Advice Market Report 2021
2021-07-08T04:09:06+01:00
OX1050275
2195
140116
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Report
en_GB
“While the huge upheaval wreaked by the COVID-19 pandemic posed serious challenges for the mortgage advice market, it has also created new opportunities for advisers. Advisers remain instrumental in the…

UK Mortgage Advice Market Report 2021

£ 2,195 (Excl.Tax)

Description

The UK Mortgage Advice report identifies consumer attitudes towards mortgages in the UK. This market report covers the market size, market forecast, market segmentation and industry trends for the UK Mortgage Advice market in the UK. 

Current Market Landscape 

The pandemic led to a sharp drop in demand for mortgage advice during the initial lockdown period. Yet despite successive lockdowns, demand for advice for mortgages has increased as the market recovered.

The pandemic led to a sharp drop in demand for mortgage advice during the initial lockdown. Yet despite successive lockdowns, demand for advice has increased as the market recovered.

  • 62% of adults who own a mortgage or are looking to arrange a mortgage say they are likely to use an adviser, peaking at 75% among 25-34 year olds.
  • 49% of advice seekers say they are more likely to use a mortgage adviser due to COVID-19.

The COVID-19 crisis has distorted the housing market, and consumers are looking for support to navigate uncertain times. With such a wide customer base, advisers have to consider and understand how different customer groups see the mortgage journey, the channels they prefer to use, and what benefits they are looking for.

Future Market Trends in UK B2B Economic Outlook

One of the biggest current challenges for the mortgage advice market will be to remain relevant and adapt to the ever-changing needs of customers. The FCA has mandated that execution-only sales channels should be easier to use, and a large proportion of mortgage owners and potential buyers feel confident they could independently find and arrange the best mortgage for their needs. As a result, advisers will have to work harder to promote the knowledge, expertise, and tailored solutions they can provide, as well as developing channels to rival the convenience of execution-only services.

The COVID-19 pandemic has accelerated the shift towards digital, and people and advisers alike are now more familiar with online communication channels. This creates opportunities for providers to expand the use of these channels in the future, in particular to bridge the gap between face-to-face meetings and other online channels. This will help lower costs for more traditional advice firms, as well as improve their geographical reach and perceptions of flexibility and convenience.

Read on to discover more details or take a look at all of our UK Finance market research.

Quickly understand

  • The impact of COVID-19 on the mortgage advice market.
  • Regulatory and legislative changes and how they are affecting the mortgage market.
  • An analysis of competitive strategies and launch activity.
  • How COVID-19 has affected consumer attitudes towards mortgage advice.
  • Channel preferences and benefits of using an adviser.

Covered in this report

Services: Advised sale, non-advised sales, mortgage, remortgage.

Brands: Countrywide, Mortgage Advice Bureau, MQube, London & Country. John Charcol, Intrinsic, Quilter Financial Planning, Old Mutual Welath, Old Mutual Plc, RIMIS Mortgage Network, The Openwork Partnership, Legal & General Mortgage Club, Lloyds Banking Group, Nationwide, Santander, NatWest, Barclays, HSBC, Virgin Money Group, Coventry Building Society, Yorkshire Building Society, TSB, Halifax, Mojo Mortgages, Habito, Trussle, Moneybox, Metro Bank, Haysto.

Expert analysis from a specialist in the field

This report, written by Stefania Apostol, a leading analyst in the Financial Services sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

While the huge upheaval wreaked by the COVID-19 pandemic posed serious challenges for the mortgage advice market, it has also created new opportunities for advisers. Advisers remain instrumental in the mortgage journey for most people, and they will become even more important in light of the pandemic. The key challenge for the market is to remain relevant and adapt to the ever-changing needs of customers. Over the next few years advisers will have to work harder to promote the knowledge, expertise and tailored solutions they can provide, as well as developing channels to rival the convenience of execution-only services.
Stefania Apostol - Financial Services AnalystStefania Apostol
Financial Services Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: market context
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • Impact of COVID-19 on mortgage advice
      • Figure 1: Short, medium and long-term impact of COVID-19 on mortgage advice, 2021
    • The market
    • Intermediary share of sales grows despite COVID-19
      • Figure 2: Volume and proportion of sales, by direct and intermediary, 2014-20
    • Vast majority of mortgage sales are advised but execution-only is set to grow
    • COVID-19 has had a significant impact on mortgage lending…
    • …and communication channels
    • FCA widens scope for non-advised sales
    • Companies and brands
    • Bank-based adviser numbers continue to decline
      • Figure 3: Proportion of different types of mortgage advice firms, by number of staff advising, 2019
    • 2020 was a year of two halves for mortgage advice firms
    • Investment in online channels and services accelerates
    • The consumer
    • COVID-19 has boosted interest in home buying…
      • Figure 4: Likelihood of taking out a mortgage to buy a property/move house in the next two years due to COVID-19, 2021
    • …and the demand for mortgage advice
      • Figure 5: Likelihood of using a mortgage adviser due to COVID-19, 2021
    • Consumers show a strong appetite for professional advice
      • Figure 6: Likelihood of using an adviser, 2021
    • Bank-based advisers are more likely to appeal to younger adults
      • Figure 7: Types of adviser likely to use, 2021
    • Recommendations play a major role when finding an adviser
      • Figure 8: Method of finding a mortgage adviser, 2021
    • A blended channel approach is the way forward
      • Figure 9: Preferred channel for mortgage-related activities, 2021
    • Prospective customers identify a range of benefits of using an adviser
      • Figure 10: Perceived benefits of using an adviser, 2021
    • Confidence in arranging a mortgage independently is high…
    • …but so is the expectation of using an adviser in the future
      • Figure 11: Confidence in arranging a mortgage, 2021
  3. Issues and Insights

    • COVID-19 highlights the importance of advice
    • The digital shift can enhance the customer experience
  4. The Market – Key Takeaways

    • Intermediary share of sales grows despite COVID-19
    • Vast majority of mortgage sales are advised but execution-only is set to grow
    • COVID-19 has had a significant impact on mortgage lending…
    • …and communication channels
  5. Market Size – Share of Distribution

    • COVID-19 has had a big effect on the mortgage advice market
      • Figure 12: Short, medium and long-term impact of COVID-19 on the mortgage advice market, 2021
    • Intermediary share grows despite COVID-19
      • Figure 13: Volume and proportion of sales, by direct and intermediary, 2014-20
    • Vast majority of mortgage sales are advised but execution-only is set to grow
      • Figure 14: Proportion of advised and non-advised mortgage sales, 2014-20
  6. Market Drivers

    • Mortgage sales decline in 2020
      • Figure 15: Annual gross Sterling secured lending to individuals, by purpose, 2016-20
    • House prices and transactions increase in the second half of 2020
      • Figure 16: Annual house price index, 2016-20
    • Rising unemployment could impact consumer confidence
      • Figure 17: Annual unemployment rate, 2016-25
    • The CJRS will increase the need for advice
    • Drop in bank base rate had limited impact on interest rates
      • Figure 18: Interest rates for selected types of mortgages, 2015-21
    • High-LTV mortgages withdrawn during height of pandemic but brighter prospects in 2021
      • Figure 19: LTV ratio for mortgage lending, 2018-20
    • COVID-19 is changing the way people interact with mortgage advisers
  7. Regulatory and Legislative Changes

    • FCA widens scope for non-advised sales
    • FCA published the final rules for mortgage advice…
    • ….widening the scope for non-advised sales…
    • …and requiring more transparency
    • FCA sets out support for mortgage borrowers impacted by COVID-19
    • The government extends the stamp duty tax relief…
    • …and introduces the mortgage guarantee scheme
  8. Companies and Brands – Key Takeaways

    • Mortgage advice market grew in 2019, but number of bank-based advisers continued to decline
    • 2020 was a year of two halves for mortgage advice firms
    • Investment in online channels and services accelerates
    • Apps to assist home buying process will become more widespread
    • Online mortgage brokers are expanding their products and services
  9. Market Composition

    • The number of mortgage brokers remained stable in 2019…
    • …but the mortgage advice market has been directly impacted by the pandemic
      • Figure 20: Number of firms and staff advising on mortgages, by type of firm, 2018 and 2019
    • The mortgage intermediary market is dominated by small firms
      • Figure 21: Number of mortgage broker firms and staff, by adviser band, 2018 and 2019
  10. Key Players

    • Largest national brokers
    • Mortgage networks
    • Mortgage clubs
    • Lenders
      • Figure 22: UK mortgage providers, by total outstanding mortgage balances, 2019 and 2020
  11. Competitive Strategies

    • Lenders tighten criteria and product distribution at the height of the crisis
    • Lenders are investing in intermediary channels
    • Online mortgage brokers are expanding their products and services
  12. Launch Activity and Innovation

    • Lenders and brokers invest in mobile apps to assist home buying journey
    • Demand for specialist mortgages and advice set to increase post-pandemic
  13. The Consumer – Key Takeaways

    • The COVID-19 pandemic highlights the importance of advice
    • Advisers will continue to play a dominant role in the distribution of mortgages
    • A blended channel approach is the way forward for mortgage activities
  14. Impact of COVID-19 on Consumer Behaviour

    • COVID-19 has boosted interest in buying a new property
      • Figure 23: Likelihood of taking out a mortgage to buy a property/move house in the next two years due to COVID-19, 2021
    • The pandemic highlights the importance of advice…
      • Figure 24: Likelihood of using a mortgage adviser due to COVID-19, 2021
    • …and will create more complex lending decisions
      • Figure 25: Impact of COVID-19 on household finances, 2021
  15. Mortgage Ownership

    • A quarter of adults have a mortgage
      • Figure 26: Current housing situation, 2021
    • Millennials and Gen X are main targets for mortgage advice
      • Figure 27: Current housing situation, by generation, 2021
  16. Timing and Source of Advice for Last Mortgage

    • 25% of mortgage holders arranged their current deal in the last year
      • Figure 28: Timing of the last mortgage or remortgage purchase, 2021
    • Most people sought advice when they took out their last mortgage
    • Bank-based advisers offer convenience and familiarity
      • Figure 29: Types of professional adviser used for the last mortgage or remortgage purchase, 2021
  17. Plans to Arrange a Mortgage in Next Two Years

    • Young adults could benefit from mortgage advice at an earlier stage
      • Figure 30: Plans to take out a mortgage in the next two years, by age, 2021
    • Increased savings activity will also boost demand for mortgage advice
      • Figure 31: Likelihood of taking out a mortgage to buy a property/move house in the next two years due to COVID-19, by plans to take out a mortgage, 2021
  18. Future Plans: Intentions to Use a Mortgage Adviser and Type of Adviser

    • Prospective mortgage customers show a strong preference for professional advice…
    • …and are looking for help that goes beyond access to products
      • Figure 32: Likelihood of using an adviser, 2021
    • Trust and familiarity boost perceptions of advisers at main bank
      • Figure 33: Types of adviser likely to use, 2021
  19. Preferred Method of Finding a Mortgage Adviser

    • A recommendation from friends and family is the leading factor in choosing a mortgage adviser…
    • …but online resources are also important
      • Figure 34: Method of finding a mortgage adviser, 2021
    • Mortgage intermediaries are more likely to see repeat business
      • Figure 35: Method of finding a mortgage adviser, by type of mortgage adviser likely to use, 2021
  20. Channel Preferences for Mortgage Activities

    • The mortgage journey starts online…
    • …but face-to-face interactions are important at an initial meeting
    • The complexity of the activity impacts channel preference
    • A blended channel approach is the way forward
      • Figure 36: Preferred channel for mortgage-related activities, 2021
  21. Perceived Benefits of Using an Adviser

    • Prospective mortgage customers are looking for access to deals…
    • …but also expert advice and recommendations
      • Figure 37: Perceived benefits of using an adviser, 2021
    • Convenience plays a major role in intermediary advice market
  22. Confidence in Arranging a Mortgage Independently

    • 70% are confident they could arrange a mortgage independently…
      • Figure 38: Confidence in arranging a mortgage, 2021
    • …but they are not less likely to turn to a mortgage adviser
      • Figure 39: Likelihood of using an adviser, by confidence in arranging a mortgage independently, 2021
    • Confidence impacts the type of service mortgage customers will expect
      • Figure 40: Perceived benefits of using an adviser, by confidence in arranging a mortgage independently, 2021
  23. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

Market

Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.

Consumer

Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

Brand/Company

Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

Data

Market reports provide appendices of data to support the research and insight produced. Our databooks* are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.

*databooks not available with UK B2B Industry reports.

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