Brand beats advice for mortgage consumers
This is according to a study by Wriglesworth Research which found that while mortgage brokers and consumer websites are increasingly informing people’s choice of mortgage products, respecting or trusting their mortgage lender’s brand is more important to consumers.
Brand perception is a deciding factor for more than a third of aspiring and current homeowners (36%) compared with a quarter (25%) who feel professional advice dictates their product choice.
Only interest rates (74%) and product fees (46%) emerge as bigger priorities among consumers than their mortgage lender’s reputation. Branding is considered more important than fitting a lender’s criteria (30%), the ease of the application process (28%), an existing relationship with the lender (18%) or a recommendation from a consumer website (15%).
However it’s not all bad news. Notwithstanding the greater importance of lenders’ brand reputation, mortgage brokers are still the most common place to go for consumers who want to take out a mortgage.
However, age and gender have a significant impact on the sources people include when gathering information to help their decision.
Male homeowners are more likely to use a broker (46% vs. 41% of women) and are more likely to see their recommendation as a crucial factor in the decision (28% vs. 24% of women). In contrast, women are more likely than men to speak to their existing bank (39% vs. 34% of men) and approach another bank or lender (30% vs. 26% of men).
Brokers are also increasingly popular with younger homeowners. Over half aged 18-39 used a broker for their most recent house purchase (52% vs. 33% aged 40+) and are also more likely to use consumer websites (27% vs. 9% aged 40+) and speak to their existing banks in the process (41% vs. 33% aged 40+).
Older homeowners aged 40+ are more likely to shop around in person and speak directly to a wider pool of lenders. Almost one in three (31%) approached a different bank or lender to the one which holds their current account, compared with 26% of 18-39s.
Consumers’ perception of mortgage products was among the subjects discussed at the inaugural Great Mortgage Debate in Westminster yesterday, organised by The Wriglesworth Consultancy on behalf of the Intermediary Mortgage Lenders Association with a panel of senior figures from Barclays, HSBC, the Association of Mortgage Intermediaries, the Mail on Sunday and Which?.
Speaking ahead of the Great Mortgage Debate, John Wriglesworth, chief executive of The Wriglesworth Consultancy, said: “These findings show that in a growing market buoyed by government funding and driven by consumer interest, the respect of a lender’s brand is absolutely vital to shaping people’s choice of mortgage products.
“Rates, fees and offers will always be the first thing borrowers look at when taking out a mortgage, but beyond the numbers, it is clearly important for them to have confidence in their lender before entering into a relationship.
“With further growth on the cards as the market looks to move on from its post-2007 lull, plenty of thought and focus will be needed on maintaining and growing relationships across a range of communication and distribution channels.
“The arrival of Help to Buy means that more eyes than ever are trained on the performance of the market, and any brand that can build credibility and trust can lead the way in consumers’ minds.”