However, with the regulator’s latest updated guidance outlining that the forbearance gloves will be off after 31 January, it’s yet another chilling reminder we are operating in ‘unprecedented times’.
That the Financial Conduct Authority (FCA) is looking for responses on this consultation within three days’ time (on 5 November) also underlines the critical nature of the debt management guidance it has proposed.
For the mortgage advice market, many still largely expect business as usual with any day-to-day operational changes from the first lockdown fully bedded in.
Christopher Barker, managing director of Manchester Money, said there may be further delays from solicitors and lenders but that will be caused by more people testing positive, isolating and leaving firms short-staffed.
“Clients who work in hospitality, especially the self-employed, will be scrutinised more but I would hope that brokers out there would be having difficult conversations with those people, asking them is it really a good time for them to be committing to such a high value transaction. That’s the conversation my team and I will be having with those clients.”
On the impact of the second lockdown, Conor Murphy, CEO at Smartr365, said: “Furlough and mortgage payment holidays will shield the housing market and these, allied to the stamp duty holiday, should ensure the current mini-boom in the property market continues for a little while longer.”
He added that the focus for brokers needs to be on getting their business through as quickly, efficiently and effectively as possible.
“The only way to do that is with the right technology – digital data, ID, and automation will be key tools and will make a big difference for those who have them.”
Lenders working to improve speed
Greg Cunnington, director of lender relationships and new homes at Alexander Hall, said his conversations with lenders suggest many are still working hard to improve processing speeds with some very quick timeframes from Halifax, HSBC and Barclays.
He added that the second lockdown looks unlikely to cause any further problems for mortgage lenders.
“This is positive news for consumers looking to purchase, especially as clients who wish to take advantage of the stamp duty holiday really need to get a purchase lined up this side of Christmas to ensure completion can take place on time, so many will likely be actively viewing properties and placing offers in this lockdown period,” he said.
Dale Jannels, managing director of Impact Specialist Finance said the fact lenders are running behind on service is no surprise and brokers do not mind as long as there is transparency that will not destabilise the deal.
“Don’t tell us on day nine you can’t do the deal when there’s a customer at the end of this trying to beat the stamp duty deadline,” he said.
“I’ve just done a deal with Virgin Money which took less then two weeks from application submission to completion and they kept us updated every step of the way.”
Jannels added that the strength of valuation and solicitor relationships appeared to be paying off for them.
“The next conundrum is will people be happy to let surveyors into their homes, especially if they’re shielding or self-isolating? Online property viewings are great but who’s happy to take a purchase all the way without actually seeing a place in person?” he said.
However, Cunnington said it is still very positive that RICS confirmed in-person valuations can take place.
“Typically, applications with specialist lenders, or at higher loan to values, require a physical valuation and so this ensures that as many clients as possible can still apply for and process their mortgage application,” he said.
“We have seen a lot of demand from first-time buyers with a 10 per cent and 15 per cent deposit, and it would have been disappointing if these buyers who are so vital to the market place had faced restrictions.”
He added: “Hopefully this also encourages lenders to continue to lend at 90 per cent loan to value, with this week’s three day product range from Accord to include home movers being a great sign of a lender supporting this part of the market.”
Many brokers have intermittently kept offices open whenever possible during the pandemic including Mortgage Advice Bureau and Impact Specialist Finance.
Jannels said the Impact office had been open since June as the majority of his team did not want to work from home, in particular those who were single or lived alone.
On the client-side, Ben Thompson, deputy CEO at Mortgage Advice Bureau, suggested that generally-speaking, intermediary and lender processes will highlight any individual borrowers that should not be moving home or buying for the first time right now.
“The vast majority of clients buying now are fortunate to be working in sectors that are not directly impacted by Covid19, or may even be doing better as a direct consequence,” he said.
“Those who are sadly less fortunate are most likely not buying a new home right now. Existing borrowers must be helped and reassured at all times, and the payment holiday extension for example is really helpful in that regard,” Thompson added.
Dan Salmons, CEO of software company Coadjute, predicted back in April that the frenzied activity being seen in the housing market was not a correction or a short-term display of pent up demand.
“This isn’t a blip. What we’re seeing in the data isn’t just people who were going to move, now catching up on their missed activity,” he said.
“What we’re seeing is the effect of people, in large numbers, reviewing their lives, their priorities and their finances.”
Like the pandemic which we all wanted to be over within six months, the energy driving the housing market could well surprise us all by going on far longer than initially anticipated.
Salmons added: “The economy will still have its usual positive or negative effect on the housing market, of course, but for many people something more fundamental has changed, and over the next year they’ll reflect that in their property choices. Just watch the data.”