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The Mortgage Customer Experience

2017

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About YouGov

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Table of Contents Table of Figures .................................................................................................................................................... 5 Introduction & Scope ............................................................................................................................................ 7

Report coverage .......................................................................................................................................... 7 Methodology ............................................................................................................................................... 8 Abbreviations ............................................................................................................................................ 10

Report Overview ................................................................................................................................................. 11 An older customer base means a change of focus.................................................................................... 11

Report Summary ................................................................................................................................................. 12 The age issue is a growing factor… ........................................................................................................... 12 Older EMHs are more qual-like and younger consumer are more quant-like .......................................... 12 Starting the journey has got harder .......................................................................................................... 13 Mortgage providers rated highly, but is may not be the provider that matters ...................................... 14 Satisfaction could rise, because a speedy and easy process are wanted ................................................. 14 E-communications (and applications) growing in importance, behind face-to-face ................................ 15 MMR imposes financial discipline ............................................................................................................. 16 The customer journey is becoming more professionally managed .......................................................... 16 Over £200 billion was borrowed in 2016 .................................................................................................. 17

Background ......................................................................................................................................................... 18 Key findings ............................................................................................................................................... 18 Four types of Existing Mortgage Holder ................................................................................................... 18 Today’s Remortgagers are more focused on lowering monthly repayments ........................................... 19 New Home Buyers transfer equity ............................................................................................................ 19 One in four EMH’s look around at least annually ..................................................................................... 20 Three Types of Potential First Time Buyers............................................................................................... 21 Over four-in-10 EMHs took out mortgages under tighter lending conditions .......................................... 22 Financial barriers have reduced somewhat .............................................................................................. 23 Financial position of EMHs improves ........................................................................................................ 25 Housing equity related to time and the initial deposit ............................................................................. 28

The Mortgage Process: Understanding, Satisfaction and Ease .......................................................................... 30 Key findings ............................................................................................................................................... 30 Mortgage applicants continue to be satisfied with the process… ............................................................ 30 Process vs. outcome – satisfaction determined ....................................................................................... 31 Financial security strongly influences satisfaction .................................................................................... 32 No single aspect of the process is the prime driver of satisfaction .......................................................... 33 FTBs often enter the mortgage process blind ........................................................................................... 34 Peak-end rule explains why satisfaction seems to peak at the end of the process .................................. 36 Considering friendliness adds insight to the picture ................................................................................. 37 Lack of control is a key issue for the three lowest-rated stages of the process ....................................... 39 End drives satisfaction but that does not mean improvements are unnecessary .................................... 40 New lending criteria has waning influence on perceptions ...................................................................... 42 Aging throws up some new problems for the over 55 year olds… ........................................................... 44

Researching and Information Used .................................................................................................................... 47 Key findings ............................................................................................................................................... 47 Only around one-third of mortgagors go it alone ..................................................................................... 47 Younger/those arranging recently more likely to get professional help .................................................. 48 FTBs look to brokers .................................................................................................................................. 50 Info sources used depend on a number of factors ................................................................................... 51

Choosing the Mortgage Provider ........................................................................................................................ 55 Key findings ............................................................................................................................................... 55 Direct approaches remains the choice of the majority ............................................................................. 55 Indirect method favoured by home buyers and recent arrangers............................................................ 56 E-contact is growing in importance .......................................................................................................... 57 The initial contact stages still proving difficult for many new buyers ....................................................... 59

Deciding on the Mortgage .................................................................................................................................. 62

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Key findings ............................................................................................................................................... 62 Quants vs Quals among EMHs .................................................................................................................. 62 Quants know the hard facts better than the Quals (unsurprisingly) ........................................................ 63 Older, more established EMHs more focused on the qualitative ............................................................. 65 Almost all PFTBs are Quants ..................................................................................................................... 67 Quants willing to make multiple provider contacts to get the best deal .................................................. 69

Applying for the Mortgage and the Financial Stage ........................................................................................... 71 Key findings ............................................................................................................................................... 71 Four-in-10 New FTBs got an agreement in principle................................................................................. 71 Satisfaction remains high at the application stage ................................................................................... 73 Speed and ease prime drivers of satisfaction again .................................................................................. 73 Paper applications remain most important, but (still) losing position ...................................................... 74 Mortgage customers continue to show satisfaction with the financial stage .......................................... 75

Being a Customer ................................................................................................................................................ 77 Key findings ............................................................................................................................................... 77 Almost half of new customers are not contacted after completion ......................................................... 77 Contact made to hasten goodbyes or to review the relationship ............................................................ 78 Contacts made reflect the mortgagor action ............................................................................................ 79 Customer service and help play a key role in promoting satisfaction ...................................................... 80 Online communications growing but the phone remains king ................................................................. 81 Mortgagors would still like an integrated communication infrastructure ................................................ 82

Market Trends .................................................................................................................................................... 84 Key findings ............................................................................................................................................... 84 Gross advances top £200 billion, with over £1 trillion owed .................................................................... 84 Loan to Value (LTV) ratios have edged up................................................................................................. 85 Most loans are for house purchases ......................................................................................................... 86 Nationwide remains the most-selected provider ..................................................................................... 87

Future Developments ......................................................................................................................................... 89 Key findings ............................................................................................................................................... 89 Uncertain times ......................................................................................................................................... 89 Shift towards remortgaging activity among EMHs ................................................................................... 89 Pension money could be significant .......................................................................................................... 90 £300 billion estimated to be advanced in 2021 ........................................................................................ 91

Appendix ............................................................................................................................................................. 92