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What difference do bank branch closures make to mortgage market?

Journalist: John Fitzsimons, Freelance

ended 05. December 2023

Nearly 200 bank branches are due to be closed next year https://www.mortgagesolutions.co.uk/news/2023/12/04/nearly-200-bank-branches-set-to-disappear-from-high-streets-in-2024/

What does this level of closures mean for the mortgage market and for brokers in particular?

Are people more likely to turn to brokers for advice as they cannot get it from a local branch?

Or do they mean people rely even more on the branches they can access?

Does the move away from branch banking reflect the changes in the way borrowers like to communicate with financial firms? How can brokers adapt to that?

Any and all thoughts on branch closures and the impact on brokers would be wonderful

Thank you!

 

14 responses from the Newspage community

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Riz Malik
Independent Financial Adviser at R3 Wealth
When I began my career in branch banking in the early 2000s, face-to-face mortgage meetings were the norm, with advisers' diaries filled weeks in advance. However, the rise of alternative channels and technological advancements shifted this trend. Consequently, to reduce expenses, banks and building societies have progressively shut down 'expensive' branches, a pattern likely to persist. Yet, as of 2023, the need for local financial guidance remains strong. This has steered more customers towards brokers, who have eagerly welcomed them and now outpace many lenders' sales teams in generating business.
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Rohit Kohli
Director at The Mortgage Stop
The potential closure of another 200 UK bank branches in 2024 signals a continuing shift in banking, and potentially enhancing the role of mortgage brokers in the financial landscape. As traditional high street banking diminishes, especially in smaller towns and rural areas, individuals may increasingly turn to local brokers for personalised, expert mortgage advice. This transition mirrors the broader trend towards digital offerings, a domain where many brokers, including our own firm, have adeptly adapted. By integrating digital solutions with our extensive, client-centric expertise, we are well-equipped to meet the evolving needs of today’s borrowers. The changing banking landscape not only reflects a move towards digitalisation but also underscores the enduring value of bespoke, professional guidance in the mortgage sector.
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Ranald Mitchell
Director at Charwin Mortgages
Branch closures are a major inconvenience for local communities, as bit by bit, branch networks are deconstructed, with their much-cherished ATMs going with them. But who even needs ATMs now, dare I say, like telephone boxes, are they now a thing of the past? The closure of branches will have no impact on mortgage retail. There will be a small number of people who like the personal interaction, trust and familiarity in dealing directly with a bank or building society, but they are few and will now find alternatives and move with the times. Rural communities are usually hit the hardest by closures, with intergenerational habits being severed from their much-loved branch. I hope that any branch closure considers this, as well as the social impact, and provisions are made in some form for the continuity of services through scheduled or mobile facilities.
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Michelle Lawson
Director at Lawson Financial
This is a sad indictment of our times which has equally been self generated. A bank was always a stalwart of a bustling high street. The banks have pushed people to swathes of technology however, for the mortgage market, it cements further the ability for people to still get that one to one interaction by seeking advice from brokers. Circa 80% of lender business now comes from the broker community which can only be a good thing.
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Ken James
Director at Contractor Mortgage Services
The Bank on the High Street is a rare beast these days, the most affected by these closures won't be the younger more tech-savvy crowd, it will be the elderly who have struggled to adapt to Modern technology, many of them look forward to the interaction they get at their local branch, this may in turn lead to even more isolation issues for the elderly.
It will benefit Brokers who will undoubtedly see an increase as clients wanting a real face-to-face meeting won't have this option. For many the mortgage process was always going to be via emails/face time and over the internet, this is how they research deals and how most expect to transact business, this won't change as banks close just push more people towards it as choices are stripped away.
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Craig Fish
Director at Lodestone Mortgages
When I first started my career in banking it was in a high street branch. Every bank had a branch and hgh street presence. However, times are changing and costs are increasing. As we move into a more digital world, lenders are simply unable to adapt to changing markets, and brokers are far more adaptable and better placed to provide clients with a service that is unmatched by mortgage lenders. A larger proportion of mortgage sales are intermediated already, and this is simply set to continue. Gone are the days of face-to-face meetings in a branch, and in are the days of teams or Zoom meetings in the late hours of the evening as clients demand service tailored to them.
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Aaron Strutt
Product and Communications Director at Trinity Financial
Bank branches were initially set up to help local customers whether they wanted to deposit a cheque or withdraw cash. The issue is they are expensive to run, and there is less footfall as people go online. It is hard to see how these closures benefit local communities, especially as the closed branches often leave empty spaces in the high street. However, the closures will mean even more people search the internet for a broker or use their bank websites to apply for finance. There is a push to go digital, but many people still want to speak to someone or have face-to-face appointments, and unfortunately, this luxury is slowly being taken away.
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Graham Cox
Director at Bridging Hub
As swathes of bank branches close across the UK, consumers will inevitably switch to getting their mortgage online. Making it easier for independent mortgage brokers to compete for business with the high street lenders. Some lenders, like Metro and Nationwide are trying to buck the trend by opening or maintaining branches., and there's undoubtedly a market for face-to-face mortgage advice, albeit one that's shrinking.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
Whilst it's terrible news for high streets, it's probably good news for local brokers who do offer that face to face appointment, desired by so many for the biggest financial decision many customers have to make. The fact that we offer that as well as free beer and office dogs to play with has always proved vary popular.
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Luke Thompson
Director at PAB Wealth Management
Closure of branches has been an issue for a number of years but lenders have continued to reduce the number of mortgage advisers they have available consistently and are pushing customers towards having to service their mortgages via the internet. if they don't have their own mortgage broker/adviser.

This shows the disdain lenders have for their customers and I struggle to see how not offering advice to customers and forcing them to pick their own deal via a website is compliant with Consumer Duty. These are the kind of consumer issues the FCA should be looking into in more detail. Fine if lenders want to offer Product Transfers but there needs to be an advice process.

I have recently been speaking to a customer who had picked a 10-year fix with their lender at the end of 2022. They have now moved to the other end of the country but can't sell their home and are unable to port their mortgage because of lender criteria. These are the consumer outcomes that need to be avoided.
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Gareth Davies
Director at South Coast Mortgage Services
As a broker, I view this shift positively. The reduction in branches positions brokers as primary advisors, sparking increased demand for personalised solutions. Striking a balance between technology and the personal touch, we thrive in this evolving landscape. Each closure serves as an opportunity to showcase our expertise, solidifying our role in the changing mortgage market. We need to take advantage of this by solidifying relationships in our local areas. Having a small branch offering face-to-face advice may well become important once again.
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Charles Breen
Founder at C B
Lenders are giving new meaning to the famous sales quote “always be closing” I don’t think it was intended to be interpreted by businesses to be always closing down your high street presence, reducing staff numbers and quality of service provided as a result.
When it comes to peoples finances especially in todays day of more complex income types and personal situations people need to speak to someone face to face to be more reassured and have a solution explained to them correctly. Its all well and good saying they can have Zoom or phone appointments but that is blind advice and not what the general public want. In this day and age with consumer duty being the forefront of everything we do by shrinking their high street presence banks are sending a clear message to the public what they value and its not the consumer sadly.
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Richard Thompson
Director at Abbeydale Mortgages
In recent years, I have seen a growing number of clients who have sought advice from brokers due to the limited availability of mortgage advisors in branches. With ongoing branch closures and the limited amount face-to-face appointments available in branches, there's a notable rise in people turning to mortgage brokers for assistance.
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Rowan Frayling
Managing Director at J Finance
I do not believe a significant number of consumers turn to the high street physically for their mortgage advice, yes many will seek advice direct from the high street banks but still via remote channels which many of the banks are offering. Therefore although this will in part benefit brokers, I don't think there will be a seismic shift.

For brokers, those not utilising remote options already, frankly should be, to keep up with the ever-changing landscape as it is, let alone because the high street banks are using them.