Just as we start to see the effects of the global pandemic ease, we are thrown into a new challenge that will once again affect us all — the rising cost of living.

And brokers now have a real opportunity to demonstrate the value of advice.

The term ‘advice’ has never been so widely used as it is now, but that is probably a good thing.

Their home could be part of a solution, rather than a problem

The more people in the UK who are armed with the financial facts of the world around us, the fewer people who will be shocked when outgoings reach new heights, thanks to rising energy bills and inflation, not to mention the increased tax many will face from April.

It is going to be a tough year ahead, with households already bracing themselves for a squeeze on their finances.

One of the biggest outgoings most adults will have is their mortgage, and getting advice on whether their home could be part of a solution, rather than a problem, could really help some borrowers navigate the next few months.

Strengthening relationships

To do so safely and in a counselled capacity, I suspect many will turn to brokers for support.

That could be for advice on making their existing mortgage work harder.

Or it could be to understand whether it’s best to remortgage and calculate any exit fees they will incur.

Helping clients to consider a number of scenarios will ensure they are well prepared to deal with any impact

Either way, listening to individual situations in a time of need and advising accordingly will only strengthen brokers’ relationships with their clients.

Naturally, borrowers may start to worry in a rising interest-rate environment and, with much talk about recent and future Bank of England rate rises, this can prompt unease.

Useful reassurance

However, it is important to remember that around 90% of all borrowers are actually on a fixed-rate mortgage, so these increases won’t directly impact them for the duration of their deal — a reassuring reminder we can all give to clients.

Conversely, there may also be some borrowers still benefiting from increased savings built up during the pandemic when under lockdown.

Conversations with these clients may take a different path, such as using the money perhaps to overpay their mortgage — which could be a way to prepare for future crises having built up enough credit to take a payment holiday, for example, later down the line, should it be necessary.

Fewer people will be shocked when their outgoings reach new heights

There is no doubt that the fallout from recent years, coupled with the uncertainties of the year ahead, provides an opportunity for brokers to demonstrate the value of advice.

Helping clients to consider a number of scenarios will ensure they are well prepared to deal with any impact felt as a result of the rising cost of living.

Long-term benefits

The role of a broker has never been as important as it has been in recent years, and that shows no signs of changing.

Continuing to support your clients as the cost of living soars this year, with an empathetic and knowledgeable eye on the world around them, will encourage them to keep coming back to you as their situations change in the decades ahead.

Jeremy Duncombe is managing director at Accord Mortgages