It’s been pretty fraught for everyone in the mortgage market over the past month or so, albeit with a slightly more stable period, hopefully, now emerging.

However, with rates settling at much higher levels than consumers have been used to, there are principles and actions that may make sense for some of your most difficult-to-help clients, especially those whose affordability problems seem worryingly high.

Other types of advice service are out there

I’m in a pretty unique position, running a small team of mortgage and equity release brokers within a directly authorised, Financial Conduct Authority-regulated brokerage called StepChange Financial Solutions, which is a subsidiary of the UK’s largest debt advice charity, StepChange Debt Charity.

It may seem counter-intuitive that a debt charity should own a mortgage brokerage at all — after all, surely the point is to get people out of debt, rather than help them to borrow. But our parent charity tries to ensure that every possible solution that might be appropriate for different people in different circumstances can be considered and explored.

Indebted clients may make things worse by borrowing more

For homeowners, that may include mortgage debt advice, remortgaging or equity release in appropriate circumstances, separately or alongside debt solutions such as debt management plans, insolvency options or debt settlements.

Kicking the tyres

So, how does our unique set-up influence what we do, and what principles can you take from it that may be relevant to your own business and clients in these difficult times?

It may seem obvious but one main principle is not taking it as a given that, if someone says they want to borrow, then borrowing is necessarily the right thing to do. We’ll kick the tyres really hard — as I’m sure other good brokers would do — on whether what the client needs is really a mortgage or equity release product, or in fact debt advice and a potential solution to a wider set of financial stresses.

There are principles and actions that may make sense for some of your most difficult-to-help clients

Earlier this year I was struck by the observations from Experian on the number of people searching online for consumer credit products, for whom debt advice was really the thing they needed. I think we have to assume that, in the mortgage market right now, that will be the case for a number of homeowners too.

That’s not to say that a remortgage, a mortgage variation or an equity release loan may not be part of the solution to a client’s debt problems.

But neglecting to consider whether alternative approaches are needed towards their other debts could set them up to fail.

Tight budgets

This feels truer than ever at the moment. We need to be mindful that people who so anxiously want to protect their credit record, which may already be on the brink of worsening, run the risk of making things worse by borrowing more. Tight budgets are set only to get tighter under the economic conditions we see today.

Of course, most people who talk to StepChange FS or StepChange Debt Charity know that we help people with financial pressures. So it may be easier for us to have these kinds of conversation with clients than it may be for the typical mortgage broker.

Don’t take it as a given that, if someone says they want to borrow, then borrowing is necessarily the right thing to do

Brokers may find it difficult to suggest to a potential client that they might be better served by getting a different sort of help. But perhaps now is a good time to think about how to frame such conversations.

For those clients who you can’t realistically serve with an affordable, sustainable solution, it’s at least worth knowing that other types of advice service are out there and may be able to help where you can’t.

Andrew Kerry is financial solutions manager at StepChange