For lenders – as well as the vast majority of firms across the mortgage market – there was very little time to bed in this transition as the volume of purchase business rocketed on the back of pent-up demand and the introduction of the stamp duty holiday.
This combination placed huge burdens on lending processes and increased the emphasis on a tech journey which, it’s fair to say, was easier for some lenders to implement than others.
Of course, technology did play a huge role in initially keeping the market ‘open’ due to the qualities attached to automated valuation models (AVMs). But another key factor beyond technology were the relationships in place between the surveying sector and lenders to ensure the housing and mortgage cogs kept turning, a vital component which also helped keep the whole UK economy moving.
How things have progressed
So, where are we from a lending perspective following another challenging period, and what do these lender/surveyor relationships look like now?
The latest Bank of England Money and Credit figures showed that new mortgage lending continued to fall in March, but approvals “rose significantly” in a positive indicator for future lending. Breaking these down, residential mortgage lending fell from a net flow of £700m in February to net zero in March. Looking at the period prior to the onset of Covid-19 in March 2020, this represented the lowest level of net borrowing since June 2011.
Gross lending increased slightly from £20.4bn in February to £20.6bn in March, while gross repayments fell from £19.9bn to £19.3bn. More positively, net mortgage approvals for house purchases rose significantly to 52,000 in March, from 44,100 in February. However, approvals remain below the monthly average for 2022 of 62,700. Approvals for remortgaging with a different lender also increased, to 32,200 in March from 28,200 in February.
This data reflects a highly robust marketplace which is slowly bouncing back from a particularly torrid time. This is mainly thanks to some increased economic stability and growing levels of competition emerging as lending appetites return and the quest for new business ensues.
It’s certainly still not a bed of roses for borrowers as we are operating in a higher interest and mortgage rate environment where heightened inflationary pressure is placing additional burdens on affordability and the ability to add to any savings pots.
The importance of working together
These factors also place an increased emphasis on a surveyor/lender relationship which has gone from strength to strength in recent times to tackle many highs and the odd low along the way.
Like any good relationship, many of the important bits happen behind closed doors without any great fanfare. A good surveying partner is constantly, and proactively, helping lending partners to adapt in line with market conditions. By this I mean being in a position to offer trusted intel and the platform to help individual lenders to tweak lending policy and criteria while providing the expertise, experience and flexibility to enable them to scale up their offering at any given time. And to also scale back if necessary.
It remains a multi-faceted relationship which is fundamental to any home buying journey.
This is a journey which still has plenty of room for improvement and this is where the strength of trust in such a relationship can help elevate lending propositions and enable them to bolster their lending numbers in an efficient and effective manner.
