The bank has also introduced an income declaration for pipeline customers who submitted cases prior to the outbreak and subsequent economic impact, along with vastly reducing the number of people working in offices as it adapted to the sudden changes.
Director of intermediaries Rob Barnard (pictured) told Specialist Lending Solutions he was cautiously optimistic following an increase in sales over the last three weeks since property market restrictions were eased.
As is typical across the market, Barnard explained the key weeks of lockdown had seen lower business volumes than would usually be expected.
But he noted this was now recovering and Masthaven was able to able to dedicate time to pro-active outbound sales activity and this was gaining traction.
“We’re starting to see green shoots which is encouraging but we have to tread very carefully,” Barnard said, adding that it was good to see lenders opening out into the 90 per cent loan to value (LTV) area.
One of the more unexpected trends to come though this period is a growth in bridging activity at Masthaven, Barnard noted.
“Bridging has remained really robust and we have picked up some business from that,” he said.
“We introduced an automated valuation model (AVM) at up to 50 per cent LTV, were pleased with it and have since increased it to 60 per cent LTV – that has been successful.”
He added that in the unfortunate situation where some lenders had been forced to pause their operations, Masthaven had been able to pick up new deals and relationships.
“It is interesting to see where the support comes from and it’s not always the common brokers – we have seen a spike in new registrations,” he continued.
“I think people normally register when they’ve got a bit of business to write with you.”
And having previously worked at non-bank lender Pepper, Barnard was sympathetic to those lenders that have been hit hardest in the crisis.
“The non-banks have been hit three ways: the securitisation markets have been closed, the cost of funds has gone up, and a good chunk of borrowers might have been hit by payment holidays,” he said.
“We have been able to stay open right the way through, but in non-bank lenders you do have to work to meet funders’ requirements.”
Prudent income approach
As with many others, introducing AVMs was one of the key changes the lender made to navigate the situation – this enabled it to process new applications and also go through its pipeline.
However, given the significant changes over the few weeks, the lender emphasised a cautious approach when underwriting its pipeline, but noted that borrowers were also being prudent.
“We’ve taken a bit more caution with applying the AVM regime to checking income and did introduce a standalone form to check with people,” Barnard said.
“I think people are sensitive in the main and they know that if their finances have been affected is it the right time for them to take on a mortgage?”
As far as practical operational changes and adaptation, Barnard explains that the lender had only moved into new offices in central London towards the end of last year.
This had prompted it to test business continuity plans and other scenarios, which resulted in a serviced office space being introduced in Reading as well.
He says this served the bank well and there are typically fewer than 10 people combined working in these two locations at present, with the whole operation being able to work remotely when needed.
Broker confidence remains
Barnard concluded by discussing the lender’s broker research which found there still remained a decent level of confidence in the market.
Of more than 200 intermediaries quizzed by Masthaven in May, 71 per cent said they were either confident or very confident in the market’s prospects for the next 12 months. A quarter said they were unsure.
The survey also found that half of specialist intermediaries were now using video calls to liaise with customers, while 42 per cent were sending regular email updates.
Only four per cent of brokers have introduced live chat platforms on their websites while just two per cent extended opening hours since the start of the pandemic.
But notably, a third of specialist intermediaries said they were recommending lenders based on their access to reliable funding.
“I think it’s made brokers think about making the most of their business, to make sure their clients don’t go back to the lender direct,” Barnard said.
“I think the confidence is still there, it’s the market that’s been taken, not the confidence.”