How Adding Mortgage Capabilities Could Support Growth of the Estate Agency Industry
Mortgage approvals surged in the last month of 2019 and analysis from the Intermediary Mortgage Lenders Association (IMLA) suggests the market is set to expand in 2020 and 2021. With this in mind, a growing number of property industry participants and experts are pointing at adding mortgage support/broker arms to estate agents, as the next way to grow business in the sector. And, it looks like a number of estate agencies are already moving towards doing just that.
Mortgages are needed even when people don’t move house, that’s because in the UK many home-owners and investors like to make sure we have the lowest interest rate and the best borrowing terms available to us. Remortgaging activity grew the most in 2019, according to almost a quarter of mortgage brokers. However, the future is also looking bright for first-time buyers.
Mortgage market growth expectations
A recent report from IMLA shows that after declining by between 1-2% to £264 billion in 2019, the UK’s mortgage market is set to grow to £268 billion in 2020 and £275 billion in 2021.
“The next two years certainly look positive for the mortgage market. In 2019 the sector remained resilient in the face of ongoing political uncertainty, but our report shows that a boost in consumer confidence is likely to support modest growth over the next two years,” said IMLA’s executive director, Kate Davies.
With this in mind, estate agencies could certainly help drive growth by considering the addition of a new mortgage arm, or even linking with existing mortgage brokers. This could encourage more business as if someone buys or sells their property through your estate agency, it can be pretty easy for them to at least find out more about your mortgage services.
It’s also another way in which the estate agency industry can help encourage more new employees. At a time when the industry is struggling to retain existing and attract new staff, the addition of more financial services could make some businesses more appealing.
Estate agencies already making the change
Amid expectations for a strong mortgage market in 2020 and beyond, some estate agencies have already begun making the change and are adding mortgage broker arms to their business.
In January 2020, The Property Franchise Group which is the parent company of numerous estate agencies including, Martin & Co, EweMove and Whitegates, announced plans to create a new financial services division to support mortgage activity.
Meanwhile, Connaught Private Finance Mortgage Advisors has been launched by London-based estate agency, Berkshire Hathaway HomeServices Kay & Co. It’s described as the exclusive mortgage advisor for BHHS Kay & Co with the ability to help home-buyers secure regular high street mortgages and specialist options too.
With the outlook for the mortgage market looking upbeat and estate agencies on the lookout for the next area of growth, it’s likely that more estate agencies could follow suit and add a mortgage string to their property industry bow.