As a result, lenders are expecting times to offer to lengthen and so among other things, are asking brokers not to make routine update calls which can be a “significant drain” on resources.
The mortgage market has rebounded strongly since restrictions around housing moves were lifted, but lenders across the industry are still facing limitations on processing capacity as large numbers of staff are still only able to work from home.
This has already been highlighted in the high loan to value (LTV) sector where several lenders have introduced limited editions of products to ensure they can meet supply and service levels.
Mortgage Solutions reported that brokers had been contacted by clients within minutes of chancellor Rishi Sunak’s announcement, while property portals have also published figures showing the immediate interest generated.
Patience and resilience needed
Lloyds Banking Group managing director for intermediaries and specialist brands Mike Jones told Mortgage Solutions lenders were adapting to the situation but they were expecting another influx of applications.
“The recovery in activity levels in the UK housing and mortgage markets has been remarkable, particularly given more limited availability of lending at the highest LTV range,” he said.
“This growth isn’t just pent up demand either, and we are seeing high levels of consumer confidence in property feeding into activity in the market.
“This has presented significant operational challenges for many lenders that have simultaneously been adapting ways of working to deal with the challenges of Covid-19 and continuing to support customers.
“The chancellor’s announcement on changes to stamp duty will inevitably further up the pace following the relaxing of lockdown restrictions which has already boosted activity.”
He added there was a need for cooperation to help ensure applications could proceed smoothly but more slowly.
“We’re in this together as an industry and without doubt this will be a challenging period for us all, requiring patience and resilience from the whole of the market – including allowing extra time for cases to be worked,” he continued.
“Routine update calls are a significant drain on lender capacity; instead greater use of lenders’ various automated tracking tools will help manage call volumes and enable urgent cases to be properly prioritised.”
Challenges across the market
Leeds Building Society CEO Richard Fearon agreed that the changes would “light a fire” under the market and bring a need for understanding and cooperation.
“There is no doubt that Covid-19 has had a huge impact on how we operate, with a focus on keeping colleagues and customers safe. These are challenges being faced across the market,” he said.
“Intermediaries have faced similar challenges and we are pleased to have been able to support them in this.
“The mortgage market has been remarkably resilient in this, especially in June, even before the stamp duty changes were announced. The stamp duty changes will light a fire under the market.
“I’d like to thank brokers for their support and for their patience as we work through the unique challenges of social distancing, remote working and limited valuation capacity over this time.”
Be upfront with brokers
Brokers will need to play a key role in keeping borrowers informed of the situation and are prepared to do that.
Sally Laker managing director of Mortgage Intelligence acknowledged that it was important to work with lenders in the current climate.
“As intermediaries we are customer facing and can work with managing expectations on time scales,” she said.
“Lenders and intermediaries share that passion of wanting to help customers but it might take a little bit longer in the current transaction process.
“If we know in advance it’s going to take a bit longer we can help manage customer expectations and we can get where we need to be. It’s about working together because we both want the same outcome.”
Laker added that being aware of the situation up front would also prevent the need for case update calls.
“We don’t want lenders closing their doors to manage capacity,” she added.
Good conversation for advisers
Mortgage Advice Bureau deputy CEO Ben Thompson noted that advisers were well versed in understanding lenders’ service levels and that much progress had been made since the start of the pandemic.
“We are in a very good place compared to three months ago, think about what lenders and brokers have done in that time, it’s amazing,” he said.
“There is a much more understanding broker and customer base given the current situation as well.”
However, Thompson noted that communications from lenders “have been really good on the whole” and brokers could further help the situation by ensuring cases were well packaged.
“It’s upon me as an adviser to know the levels lenders are working on,” he continued.
“Typically, those with the best products are the busiest, but then we have to have a conversation with the borrowers about price versus time. That’s an aim for many advisers to be having.”