Meet Rita Kohli and Rohit Kohli, co-directors of The Mortgage Stop
Tell us a bit about your business.
Rita: I have been mortgage advising for 20 plus years, initially working in big banks and then gradually moving onto whole of market.
Then in the madness of 2020, I thought, “I want to do this for myself”, and with some words of encouragement from Rohit, I went out on my own.
Launching in August 2020, Rohit has since joined me and we now have a marketing apprentice, an administrator and we also have a trainee mortgage adviser.
We’ve grown from working from home, having one desk in the spare room, to now having our own office premises in a prominent location in the town centre.
Where are you based and where do you operate geographically?
Rita: We are based in Romsey town, which is in Hampshire, about a 15 minutes’ drive from Southampton.
Rohit: Yes, we’re also about 15 minutes from Winchester, so we’re bang in the middle of Winchester and Southampton.
Even though a large percentage of our business is local, we operate across the UK. There’s no limit to where we operate at the moment.
Rita: And because of where we are located, near Portsmouth and Southampton, it is very ship orientated.
Down here you’ve got plenty of ferries and cruise ships – so we have a lot of connections with seafarers.
Even though our clients can live anywhere in the UK, because of their jobs and our location, it makes sense that we deal with a lot of foreign currency, seafarer type mortgages.
What are the main issues impacting your local market?
Rohit: House prices are still quite high in our local market.
Last year, a lot of buyers stopped or paused their house hunting because people were saying that house prices would plummet. But that hasn’t happened.
There’s been a small correction, but on the south coast where we are, prices are still high.
First-time buyers are struggling the most at the moment, trying to get onto the property ladder with interest rates where they are – it is making affordability much harder for them.
Rita: I think, as with anywhere, demand is really high, and supply is low.
We are seeing more and more new developments going on, but they are quite highly priced.
So, it is going against that first-time buyer market, and catering more for people who are already on the property ladder, who are maybe relocating to certain areas.
The developments seem to be attracting new people to towns, but at the same time, pushing out the people who already live in the town and now cannot afford to relocate nearby.
It’s not just first-time buyers that are being affected, I also specialise in later life mortgages.
This week I had a lead come through from a 74-year-old who wants to move from her home to the neighbouring village, purely because she sees the new property as her future proof, ‘forever’ home, with a downstairs bedroom and ensuite.
Unfortunately, her house is cheaper than the one she wants to buy, so she’ll be looking at options for how she can bridge that gap for borrowing.
But this shows that the demand is still there on both ends of the spectrum. You’ve got your first-time buyers looking to step onto the property ladder, but you’ve also got your later life borrowers who are still wanting to be independent, and not necessarily looking to move into retirement flats.
What challenges are you facing as a broker?
Rita: There aren’t enough Government level schemes at the moment.
Help to Buy is obviously gone, and there are a few Shared Ownership opportunities out there, but many people don’t know about it – or are not necessarily keen on the idea.
Right now, there’s literally nothing available for first-time buyers to help get them onto the property ladder.
One of the challenges we see a lot of is renters coming to us fed up with moving house.
Many of them have had to move up to three or four times in the past couple of years alone, and when you’ve got young children, that can be really challenging.
These circumstances often limit renters to certain catchment areas because their children are at school. So, they come to us fed up, looking for ways to save for a deposit to buy a house for themselves.
Many are also reporting that landlords are giving little notice when they decide on selling, or that rents have climbed too high.
Rohit: There is nothing there at the moment that is helping first-time buyers. That’s the biggest thing for me.
Yes, there isn’t any real support or schemes from the Government, but also, there are limits to what new developments are providing for first-time buyers.
A lot of developers are building these new houses which are no good to people who want to get onto the property ladder because they are three, four or five bedrooms and far too expensive.
They are not affordable homes, because developers want to maximise their profits.
The Government’s process needs looking at, and there needs to be a higher proportion of affordable houses built rather than just executive homes.
Rita: Even if you qualify for Shared Ownership, because it is a certain level of earning that you have to have, and you’ve got children, you might go higher up the ranking than a single person who is earning a decent wage.
But the single person then misses out, even when they are more likely to be approved for a mortgage quicker as they haven’t got dependants and liabilities.
Now, their only option is to be forced to buy a standard purchase property, which is more expensive and puts a strain on affordability.
We’ve got clients on our book who have been trying to save for a house for almost three years now.
We pride ourselves on not just operating in a transactional way, we don’t just accept clients with a property in mind and a deposit ready to go – we will help clients through their entire journey, even if that means starting from scratch and saving for a deposit.
Rohit: As well, we are seeing a lot more people recently who are coming to us with increasing levels of debt.
This is massively affecting affordability as well.
Even just taking out debt on a credit card or through a higher purchase agreement, people are seeing that they then can’t borrow as much as they were expecting to, even though they are on reasonable incomes.
I think people haven’t realised this, and now with the way that lenders are changing how they assess mortgages, criteria is becoming much tighter.
What are the main opportunities for brokers in your area and nationally?
Rohit: Income structures are becoming more and more complex, and criteria from lenders is always evolving – so a lot of people have started to realise the value that brokers can bring them.
Particularly if you look over the last couple of months, where rates have been coming down, we have been securing better rates for the clients that we have on our books.
On the other hand, we’ve also had new clients come to us, who haven’t benefited from a broker and have gone direct with their lender. They’ve then regretted it because they have locked themselves into a deal that isn’t necessarily the best option for them.
I think there is plenty of opportunity around educating borrowers on the additional benefits that brokers can provide, and what we actually do for clients.
Locally for us, it’s about providing people with guidance. It’s about educating them about how difficult it can be to get a mortgage, and what steps they can take in order to secure a deal.
It’s not just the case of coming along one day and expecting to have a mortgage by the end of the week, it can take weeks to do it, if not months.
What we want to do is to try and get clients mortgage ready.
Rita: There are a lot of opportunities around saving time for them as well.
We do this 24/7, we’ve got that knowledge and we’ve got access to whole of market.
Where a borrower might only think of high street banks, and they might be able to go to comparison sites, not all of them will list the specialist lenders that we’ve got access to.
We’ve got access to business development managers (BDMs) for specific cases, so we’ve got access to that middle ground where the consumer hasn’t.
Often, high street banks only have one mortgage adviser dedicated to a large number of branches in a huge area.
Because of this, sometimes it could take consumers up to two or three weeks to speak with an adviser directly – whereas we can speak to them there and then.
We have that added layer of accessibility, we know if a case is urgent, and we are always on hand to help.
What could lenders do to help further your business?
Rita: Like we said, lenders could to more to support first-time buyers. If the Government aren’t launching anything yet, lenders need to do all they can to help people onto the ladder.
There are propositions like Joint Borrower Sole Proprietor (JBSP) mortgages where people can borrow with their parents or sometimes even non-family members, but there is still a lot of restrictions around this, with many deals being capped at a certain age.
It’s all very well; having Mum or Dad on your mortgage with you but then you’re limited to how long you can have a mortgage for, which then affects the affordability still.
There needs to be more flexibility. For example, if Mum and Dad don’t have any mortgage or a very small mortgage, but have loads of equity in their property, why can’t they use that as collateral to boost up their child’s affordability?
Rohit: Yes, we need more innovation from lenders. A lot of lenders still offer just ‘bog-standard’ mortgages that have been the same for God knows how long.
There’s a couple of lenders out there that are trying new things, for example, Generation Home – we work with them a fair bit and their proposition is really good.
Also, Perenna – who are just launching at the moment – their long-term fixed mortgages offer a great proposition as well, as long as you meet the criteria.
Until the big lenders start to implement more flexible criteria and these kinds of products, people are still going to struggle.
A big lender needs to take a leap of faith and change something significant about the way people buy mortgages, because at the moment, there is little incentive.
What sets you apart from the competition?
Rita: As I said earlier, some companies are purely looking at numbers. They can be quite transactional, and they may not have the aftercare either.
For us, every person that comes to us, even if they are not ready to apply for a mortgage – they are still a valued client of ours.
If we’ve had to maintain and help them with saving for a deposit, or addressing a bad credit file, we might have to work with them for two to three years until they are ready. Even though we don’t generate any income from that, we are happy to handhold and nurture them.
Even during the process, we are very much ‘hands on’. We will even go the extra mile of phoning their solicitors on their behalf, or phoning the estate agents, just so that they feel that they are being looked after.
For me, that service overrides everything, because they will remember you.
We are now coming to a stage that we have a lot of remortgage clients, and they are all coming back to use for repeat business because they remember us, and how much we worked with them when they originally bought their house.
How should potential borrowers contact you?
Rohit: They can give us a call, or go onto our website and book an appointment at: https://themortgagestop.co.uk/
Or, if they are local, they are more than welcome to pop into our offices.
