Soaring demand in the mortgage market has not driven ‘real change’ in levels of protection business, advisers have warned.

A September survey of 5,000 consumers for the Association of Mortgage Intermediaries found buying a first home (51 per cent), or moving to a new one (28 per cent) among the top three reasons for consumers to buy protection.

Additionally, data from the Bank of England shows the number of mortgage approvals for house purchase in September was around 10 times higher than the “trough” of 9,300 approvals in May.

However, a separate survey of 499 mortgage advisers for the AMI found 58 per cent had seen “no real change” in their protection business since the start of the pandemic.

Lucy Brown, head of protection at L&C Mortgages, said an increase in mortgage demand should suggest an upturn in protection would “naturally follow”.

But Ms Brown added: “[The] customer focus on getting a mortgage offer issued, alongside the time pressure advisers often face in periods of heavy demand can often dampen any anticipated uplift in protection, and sometimes even have the opposite effect.”

Alan Lakey, director at Highclere Financial Services, said: “This highlights why those mortgage advisers who are busy, or maybe lack confidence in their knowledge, need to form liaisons with specialist protection advisers.”

The majority (84 per cent) of advisers surveyed said they advised the customer directly during the mortgage process.

Likewise Naomi Greatorex, managing director at Heath Protection Solutions, said with the mortgage being what the customer wants from the broker, the protection conversation could be postponed during busy times.

Ms Greatorex added: “With mortgage applications being more difficult for the customer it is also a conversation which I find they want to hold off until later on too.”

For Matthew Chapman, commercial director at Plus Financial, the biggest concern was that a mortgage seemed to be the “primary catalyst” for consumers to talk about protection.

Mr Chapman added: “Given that we are likely to see a sharp reduction in mortgage approvals as lenders tighten their criteria further, I am concerned that this will translate into a reduction in protection numbers.”

While the coronavirus has highlighted the role of protection, its financial impact may also be affecting take-up.

An adviser survey between April and June by provider Guardian found three-quarters reported an increase in willingness by clients to talk about protection.

But Heath Protection Solutions’ Ms Greatorex said she found that customers are currently “much more concerned” about spending.

“I have noticed when talking and quoting for mortgage customers at the moment, budget and cost has become a much higher priority.

“I understand that in the protection market there is a rise in quotes, but I don’t believe this increase has translated to protection products being purchased after the initial increase we saw at the start of the pandemic.”

She added: “Although the pandemic has highlighted the need for protection, customers are concerned about additional costs in the current economic climate.”


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