This meant more working from home, more remote meetings mixed with home schooling and for many this was a far harder lockdown to deal with than the early lockdown of 2020.
I for one really found this new lockdown challenging and will always thank my industry friends for staying in touch and offering a chat when times seemed to be getting on top of me on occasion.
What this did mean for the industry was an extension of the furlough and mortgage payment holiday schemes being offered; but with the latter being examined more closely by lenders as to whether this measure was right for borrowers in all circumstances. We still wait to see exactly how this affected people who took payment holidays in terms of applying for credit in the future.
In September the furlough scheme ended, and it had proved to be highly successful in keeping the economy going and ensuring people received a regular income. The impact of the withdrawal has not been as bad as some expected, especially with the removal of the additional Universal Credit payment. But with rates on the rise and inflation very high, the true impact may take some time to rear its head.
The Financial Conduct Authority’s ban on lenders repossessing homes was extended to 1 April but now that moratorium has been lifted repossessions are slowly rising and there is a backlog of cases. Despite repossessions being historically low, there is concern that levels of serious mortgage arrears are increasing so repossessions are likely to do the same.
Total mortgage arrears are currently in decline.
Housing and the purchase market
By far, the biggest impact on the housing and mortgage markets was the stamp duty holiday introduced in July 2020, but then extended out to June 2021.
The conveyancing industry and mortgage completion teams within lenders should be applauded in getting so many completions through at these peak times. Now the stamp duty holiday is over, we are seeing more normal levels of mortgage activity. However, lenders are still very busy and it looks like gross lending this year will be the highest since the peak of 2007.
Although on the increase following December’s 0.15 per cent rise, mortgage rates are still very low. We saw some of the big banks came in with sub one per cent rates as a result of being awash with deposit balances.
For those that rely on wholesale funding, the securitisation market has remained relatively strong in difficult times with a number of UK institutions, including specialist lenders and banks, undertaking successful securitisations this year.
An interesting development has been investors applying non-financial factors such as environmental, social and governance into their analysis processes to identify other growth opportunities.
The asset backed securities conference moved from the beaches of Barcelona to the streets and establishments of Edgware Road, but it was a very well supported event with a very upbeat feeling about it.
With all its trials and tribulations, I think our industry as a whole can look back at its performance in 2021 with an awful lot of pride. We have seen some really great collaboration between businesses to offer support to each other, and maybe the ongoing pandemic has made us all feel a little more human again.
We clearly are not out of the woods yet in terms of Covid. But if we show the same tenacity and vigour as we did in 2020 and 2021, we should all be able to look forward to a successful year in 2022 – certainly with some ups and downs along the way.
May I wish all readers, colleagues and friends a peaceful and safe Christmas, and all the best for 2022.