Consumer trends in the UK mortgage market

The financial crisis has significantly changed consumer behavioral patterns within the mortgage market. In the short run, borrowers are taking into account more qualitative factors such as a lenders reputation and stability. Mortgage providers need to take note of this and change their marketing messages in order to appeal to recessionary consumers.

Report Highlights
examples of innovative mortgage product offerings from both domestic and foreign markets

The most important consumer trend is that of financial safety consumers are worried about the future and they need a safe and dependable lender who can help eliminate any future concerns for a borrower taking out a mortgage product.

The growth in popularity of the direct sector has placed a greater emphasis on large lenders who can take a significant share of the market if they fully appeal to the consumer Megatrends.

Consumers are progressively looking for mortgage products that suit their individual needs and since many mortgage offers have been withdrawn from the market this trend is becoming more important.
[Studien Infos ausblenden]

DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
Understanding the Megatrends framework is vital for any mortgage provider 2
A Megatrend framework is vital for lenders during the current climate 2
Greater customer understanding can help to overcome the obstacles encountered when targeting and communicating with customers 2
Consumers are no longer focusing solely on price when taking out a mortgage 4
Datamonitor has identified 10 Megatrends in consumer behavior that are shaping and driving attitudes 4
There are four consumer Megatrends that have become apparent throughout the downturn 4
Comfort 5
Authenticity 5
Individualism 5
Financial Intelligence Complexity 5
House price developments are a key concern for homebuyers 5
Some of the major lenders actively appeal to consumers worried about their financial health 6
Consumers are most worried about losing their house 7
Consumers are increasingly seeking out advice as they no longer feel confident in making their own financial decisions 7
Addressing consumers' financial intelligence is fundamental for the complicated nature of mortgages 8
Consumers tend to follow the masses when selecting financial services providers 8
But borrowers also want mortgage products that can suit their individual circumstances 10
Many major lenders appeal to consumers' individualistic tendencies - the Individualism trend 10
Gearing lending towards FTBs will establish significant kudos from many new homebuyers 10
Abbey and Halifax have led the way for helping to get FTBs back onto the property ladder 12
Customers need mortgage lenders to be authentic and honest throughout the recession 12
Mortgage promotions need to be realistic 12
A recent mystery shopping exercise revealed how some banks are not delivering promised standards 12
Most mortgage lenders fail to fully appeal to this trend 13
Mortgage lenders need to be more innovative in their product offering to appeal to these consumer trends 13
Offset mortgages represent an original solution for homebuyers 13
Lloyds TSB's 2012 mortgage product may appeal to ethical borrowers 14
Green mortgages also attract borrowers with ethical considerations 15
Examples from abroad have highlighted how UK lenders can improve their messages 15
APPENDIX 17
Data Tables 17
Definitions 17
Flexible mortgage 17
Offset mortgage 17
Variable rate mortgage 17
Methodology 17
Further reading 17
Ask the analyst 18
Datamonitor consulting 18
Disclaimer 18
[Inhaltsverzeichnis ausblenden]

Table 1: Average UK house prices, 2000-12f 17
Figure 1: A financial services company can pitch its level of customer understanding at various stages depending on the company's sophistication 3
Figure 2: The steep fall in house prices is worrying existing homeowners, 2000-12f 6
Figure 3: Consumers are most likely to consider major mortgage players such as HBOS and Abbey when taking out a new mortgage, 2008 9
Figure 4: The average LTV across all products has fallen from 85.2% to 78.5%, 2007-08 11
Figure 5: Lloyds TSB's 2012 mortgage appeals to a borrower who supports the Great Britain Olympic team, 2009 15
[Tabellenverzeichnis ausblenden]