Some 41% of brokers reported a decline in enquiry levels in May 2020 when compared to May 2019, research from Brilliant Solutions has revealed.
Despite the decline 26% of brokers saw enquiry levels increase as a direct comparison. The survey does not factor in the quality of the enquiries.
The mortgage club and specialist mortgage packager surveyed brokers and asked them what was their biggest perceived challenges as well whether they were planning on making material changes to their business.
Matthew Arena (pictured), managing director of Brilliant Solutions, said: “We’ve deliberately waited to hear from brokers until the month of May was behind them. It’s given advisers time to take stock of what is happening and get a bit more clarity on what the future holds.
“We have found understanding the market through the lens of the adviser is crucial. This survey helps and we are happy to share our findings.”
“41% of brokers surveyed stated that enquiry levels were down this May when compared to May 2019. That is not a message that has been widely reported. 26% of brokers saw enquiry levels up as a direct comparison. The survey does not factor in the quality of the enquiries.
“In terms of the largest challenges facing brokers in the next 18 months, the results are mixed. There are clearly a cohort of brokers that are concerned about new clients and volumes but nothing that stands out.”
“Interestingly, direct to lender product transfers and margins were not seen to be major challenges over the next 18 months with less than 14 respondents ranking that as first or second in terms of the challenges they expect to face.
New clients scored a much higher 34 votes for the same question. Other factors mentioned were concerns on house prices and the impact this would have on transactions.
Clive Langley of PSA Financial said: “We are concerned about house prices, that is the single biggest threat to our business at the moment and we expect them to drop significantly in the next 18 months.”
Broker confidence in their business models remains high. Only 19% of brokers said they would be making changes to their business model in the near future.
Arron Bardoe of Davidson Downing summed up the confidence in their model when he said: “I suspect many brokerages, especially large firms, will be re-evaluating their business models since Lockdown. Those pursuing solely profit may have found their models less sustainable than those who place the customer at the centre of what they do.”
Those brokers that were changing their business appear to be adopting more technology rather than changing any of the business fundamentals. Video meetings and new software upgrades were all frequently mentioned.