Covid-impacted self-employed clients with credit blips demand advice and manual underwriting, say brokers

Covid-impacted self-employed clients with credit blips demand advice and manual underwriting, say brokers


In the last in a video series of four in association with The Mortgage Lender, Greg Cunnington said: “I have a client I’ve dealt with for ten years. He runs a cool business, he designs restaurants, shops and bars all over the world. He took six months off because there was no work globally and it was costing him money to keep the office open. He’s now back up again, with record numbers coming through in Hong Kong. He thought getting a mortgage would be really easy.”

Cunnington explained the client’s existing lender is a top six provider who won’t take the case ‘in a million years’ due to the work break, despite the fact the client’s a great credit risk.

He added that some mainstream lenders are stepping up for the self-employed including Halifax which was doing a lot of ‘common sense underwriting’ on self-employed cases, also mentioning HSBC and Barclays, but TML’s sales and product director Steve Griffiths outlined the specialist lender’s point of difference.

He said: “The example Greg gave there about the customer who closed up for a bit and had a hole in his recent set of accounts. A limited number of mainstream guys would say yes, that’s not a problem. What that means is, as a specialist lender you want to be number three on the recommendation list who will definitely do the deal. I guess that’s the space we’re moving back into again. When you are looking at Covid-income impacted clients, you’re looking at a very short list of mainstream lenders – maybe just one.”

For more on the debate, watch the video below.

Our video panellists include Steve Griffiths sales and product director, The Mortgage Lender, host and group editor of Mortgage Solutions, Victoria Hartley, Greg Cunnington director lender relationships and new homes at Alexander Hall and Andrew Montlake (pictured), managing director Coreco Mortgage Brokers and chairman of AMI.



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Complex incomes: ‘A lot of first-time buyers are working two jobs’ – TML

Complex incomes: ‘A lot of first-time buyers are working two jobs’ – TML

In association with The Mortgage Lender (TML), Steve Griffiths, sales and product director at TML said no matter what the income, the client’s experience and income consistency were key to getting these cases through.

“I was discussing a case last week at an event with two high-earning applicants with a low loan to value (LTV) but one of the applicants worked in financial services and had a very high reliance on his bonus, so we needed to count 100 per cent of that. The other applicant was a contractor with two separate employers – this is a good example of great customers, struggling with two more complex elements,” said Griffiths.

Both the brokers on the panel, Greg Cunnington, director of lender relationships and new homes at Alexander Hall, and Andrew Montlake, managing director at Coreco Mortgage Brokers, said they were seeing more of these client cases coming through their London-based offices.

Cunnington said: “It’s about understanding the background with these cases. We’re seeing a lot more people with two jobs, like delivery driving, for example. We had a doctor who used to do a three-day week, who has added two days locum shifts.”

He added that the most attractive jobs listed on applications have changed immeasurably too.

“We had a client who got all his income through Instagram. We got a specialist lender to take a look at the advertising contracts and his business banking statements – that was really interesting. In another first-time buyer case, this person had a relatively normal job, but all their income was going out to another person. We had to dig in and it turned out the guy lent his deposit cash every month to a friend, who returned it plus two per cent interest on top which the applicant viewed as a rock-solid income source,” said Cunnington.



The video panellists include Steve Griffiths sales and product director, The Mortgage Lender, chair, group editor of Mortgage Solutions, Victoria Hartley, Greg Cunnington director lender relationships and new homes Alexander Hall and Andrew Montlake, managing director Coreco Mortgage Brokers and chairman of AMI.


See the first and second parts of the TML complex income series here.

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‘Avoid the commoditisation of mortgages and poorer customer outcomes’ – AMI chair Montlake

‘Avoid the commoditisation of mortgages and poorer customer outcomes’ – AMI chair Montlake


In the managing director of Coreco Mortgage Broker’s speech at the trade body’s annual dinner, Montlake said: “We have fought your case around escalating fees, with some big successes, whilst other successful battles and negotiations have been carried out behind the scenes, with always the focus remaining on the need for quality advice and the wellbeing of consumers.”

He added: “We are a consumerist industry after all, and it is important to clarify that being consumer focused can still put us at odds with the concept that cheapest is always best. For many of our clients, cheapest would most certainly not be best and we must avoid the commoditisation of mortgages in a way that will inevitably lead to poorer customer outcomes.”

He added greater technology use should strip out inefficiencies but not at the expense of sensible process and proper advice.

“Every so often I read a quote somewhere that basically says a new firm or product is here to fix this broken, unfair industry. It’s often from those who really do not actually have much experience or care about the industry to which they refer. It is important that they are not the only voices government and regulators hear.

“My view is the industry is not broken. It is one of the best run and well-regulated industries in the UK, with a rich vein of talented, professionally qualified and dedicated advisers passionately working all hours for the benefit of their clients,” he said.

“Stats show we are trusted, appreciated and our clients come back time and again to receive good advice. We can all improve, but we are never broken.”

Montlake drew attention to the guides issued by the trade body this year, spanning Brexit, vulnerable customers, and operational resilience. He also flagged the assistance the firms had given advisers with the senior managers regime, PI Cover or claims from notorious claims management firms.

The dinner, which was both the 2020 and 2021 dinners rolled into one, was hosted by Mortgage Solutions’ parent company AE3 Media and sponsored by TSB.

Montlake added: “I would like to thank my predecessor Martin Reynolds for all his personal help and advice, as well as conveying his intense happiness that he managed to miss out on his speech last year.”

‘We’re seeing more self-employed complex income cases with no adverse’ – Griffiths

‘We’re seeing more self-employed complex income cases with no adverse’ – Griffiths

In a video in association with TML, Griffiths (pictured) said: “Typically, as a specialist lender we allow for some degree of adverse in our entry level products, someone whose missed a few payments on credit card or has some historical adverse credit. But what we decided to do is go down a level and have a straightforward complex income product which starts with a two instead of a three.”

In late November, the lender launched the RL0 product range with rates that start from 2.84 per cent and are available across purchase and remortgage categories up to a maximum loan to value of 85 per cent.

The self-employed products will cater to individuals with complex incomes as their employment status may mean they will struggle to secure a mortgage from mainstream lenders.

Griffiths said the lender was also starting to see more Covid impacted accounts coming through where a dip in profits had a knock on effect into affordability.

“So we look at pre-tax from previous years so typically 2020. All we need to see is has the business returned to a reasonable level of turnover, in line with the previous accounts. As long as we can see they’re on that journey we can almost annualise what their turnover is now and take off the cost ratio from the previous set of accounts,” he added.

According to TML, there are over four million self-employed workers in the UK and that number has been growing in the past year.

Our panelists in the second of our series of four videos on complex self-employed incomes post-Covid due to run before the Christmas break, include Steve Griffiths sales and product director, The Mortgage Lender, Greg Cunnington director lender relationships and new homes Alexander Hall and Andrew Montlake, MD Coreco Mortgage Brokers and chairman of AMI.



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Mortgage lenders are in a positive place on self-employed, says Alexander Hall

Mortgage lenders are in a positive place on self-employed, says Alexander Hall

Greg Cunnington, director of lender relationships and new homes, Alexander Hall said: “Smaller specialist lenders are working well with self-employed cases, for example, limited company directors who have put a lot into pension schemes. They can [effectively] take that back and use it for income affordability. We have a lot of clients who only have one year’s accounts who pivoted to self-employed, so a lot of the specialist market are taking those guys on.”

In a video in association with The Mortgage Lender (TML), Cunnington added: “For an intermediary, it’s just about understanding that every client is so unique, so get into the detail, get into the books, know your lenders and know where to place things, but many lenders are in a really positive place on self-employed,” said Cunnington.

Steve Griffiths, sales and product director, from specialist lender TML said: “We like to look at every area of the business to make sure we’re lending everything we can, responsibly obviously. But there are three areas. You have to understand how long has the business been trading, which window of affordability is a lender going to look at, two years, three years etc and what number is coming off the accounts and going into the affordability calculator?”

He added that TML was seeing a lot of newly-formed companies out of the pandemic or firms that only had one set of books to offer right now.

He said: “We’re always quite happy to look at businesses that have just been trading for 12 months. In terms of the time period, we always look at the most recent year’s figure, unless it’s a more Covid impacted case, which is usually more beneficial as you’re seeing an upwards curve, unlike the more traditional lenders who tend to look at a two- or three-year average.”

The panel went on to examine the fact the pandemic has produced both self-employed thrivers and survivors and the various options in the marketplace for both.

This is the first episode in a series of four videos debating this specialist market, its case complexities and the routes our mortgage advisers on the panel have taken to help clients.

Our panellists include, group editor of Mortgage Solutions, Victoria Hartley, Steve Griffiths, sales and product director, TML, Greg Cunnington, director of lender relationships and new homes, Alexander Hall and Andrew Montlake, MD Coreco Mortgage Brokers and chairman of the Association of Mortgage Intermediaries.



This is a sponsored video, with thanks to TML.

AMI diversity and inclusion report finds ‘appetite for change’ but more work needed

AMI diversity and inclusion report finds ‘appetite for change’ but more work needed


AMI’s second Viewpoint report, which collated responses from 1,178 people, found there was definite “appetite for change”, with 82 per cent of respondents saying they felt diversity and inclusion was important and just five per cent saying they didn’t think it was important.

However, those surveyed, especially from minority groups, reported discrimination in the workplace and at industry events and also raised concerns around culture and leadership.

More than 40 per cent of respondents said the mortgage industry attracted a representative workforce. This falls among women, LGBTQ+ and those of ethnic minorities to 35 per cent for women and 36 per cent respectively for the latter groups.

AMI chairman Andrew Montlake said that while the report showed some “stark, uncomfortable facts” it was necessary to acknowledge issues in order to go forward.

He said: “For too long we have shied away from the issue, finding the conversation too difficult or dismissing it as not relevant. I am immensely proud that we now have the strength of character to do this.”

Robert Sinclair (pictured), chief executive of AMI, added: that there was “real hope for the future” and AMI was committed to working with firms, partners and industry to improve the sector.

He said: “We must come together, banish poor behaviour and choices, and eliminate any ingrained prejudices to ensure that we, as an industry, attract a diverse workforce. We must champion true meritocracy, smash glass ceilings and ensure we are truly representative of the customers we advise now and in the future. Our industry, our people and our clients will thank us.”


Discrimination higher in underrepresented groups

Around eight per cent of those surveyed experienced sexual harassment or inappropriate behaviour, with 12 per cent saying they had witnessed it. This rose to 15 per cent for women.

Nearly 11 per cent said they had witnessed bullying, physical harassment or violence, with seven per cent experiencing it.

More than 20 per cent of respondents also reported other common forms of discrimination, such as being unfairly spoken to, demeaning language being used, feeling uncomfortable or excluded.

Between 15 and 30 per cent experienced or witnessed being passed over for a promotion, being uncomfortable at industry events or made to work on tasks below their skills or pay grade.

Anecdotally, ethnic minority groups and those from LGBTQ+ backgrounds also reported in interviews that racist and homophobic remarks were not uncommon.

The report revealed that 14 per cent of all survey respondents witnessed or experienced situations where people felt uncomfortable at industry events. This proportion grew among women.

Interviewees said that events continued to reflect older straight white male culture, despite some progress in recent years, pointing to the choice of speakers, type of awards, alcohol consumption and lack of consideration to ensuring underrepresented groups felt included.


Raising concerns of discrimination

Those who experienced or witnessed discrimination were less likely to raise concerns with senior leaders or human resources, with between 21 and 23 per cent of women, LGBTQ+ and ethnic minority groups raising issues.

This rose to 42 per cent for gay and lesbian colleagues who either experienced or witnessed discrimination but chose not to report it.

The main reason cited for not reporting discrimination was a lack of trust that complaints will be handled well and lead to positive outcome for the complainant.

AMI said that it would take measures with member firms to ensure proper procedures were in place to report behaviour but people needed to “take responsibility for making sure that inappropriate behaviour become unacceptable and attracts appropriate sanctions”.


Changing culture from ‘old boys club’

The report found that the culture of the industry had become more professional and inclusive in some ways in recent years, but that there were still pockets who described it as an “old boys club”.

Just under a quarter of those surveyed disagree that diversity and inclusion was being taken seriously in the sector, which rises to 44 per cent among LGBTQ+ people and 50 per cent of those from ethnic minority background.

Just over a quarter of women disagree, which the report said suggested that efforts like the Women in Finance charter to improve female representation were having a positive impact on the industry.

The report said that the industry needed to move beyond discrete initiatives and make structural to changes to embed diversity and inclusivity into firms themselves.

It also said that women, LGBTQ+ and ethnic minority colleagues were more likely to experience a sense of exclusion, with seven per cent of women, 15 per cent of LGBTQ+ and 13 per cent of ethnic minority colleagues experience a sense of exclusion.

The report added that more people in those groups also felt that they were not valued in their workplace and that they couldn’t bring their “whole selves” to work. They were also more likely to report mental health, which the report said could be aggravated by sense of exclusion and bullying.

John Charcol’s Nick Morrey to join Coreco

John Charcol’s Nick Morrey to join Coreco


In his role he will manage and grow Coreco’s team of brokers in its London and Southend offices and across the country.

This will include technical assistance to brokers, helping new joiners and fostering lender relationships.

Morrey has worked at John Charcol since 2002. He is currently product technical manager and head of the specialist mortgage technical service team.

He supported advisers across its three locations and worked with lenders on policies, criteria, products and approval processes. He also wrote technical guides and blogs for the broker.

Coreco’s managing director Andrew Montlake said that Morrey had had a broad range of experience and was well-respected by lenders and the industry.

He said: “He will be an invaluable help to all our brokers, both new and experienced, as well as to me personally. This will allow me to push forward with our overall strategy and exciting plans we have in store for Coreco.

“We already have a highly respected brand and our Coreco family is packed full of great talent, but we want to cement ourselves as the top brokerage that talented individuals of all backgrounds aspire to work for.”

He added that there would be further announcements in the future as it completed structural changes.

Morrey said: “I am very excited to be joining Monty and the rest of the Coreco team, some of whom I have known for years. Coreco are a terrific company with a great reputation. They have mortgages and customer service at the heart of their DNA, and I am very much looking forward to being a part of the projects to come.”


Hometrack to provide bespoke property valuation reports to Coreco

Hometrack to provide bespoke property valuation reports to Coreco


Hometrack’s property valuation reports include a valuation from its automated valuation model (AVM), local market trends, comparable properties and recent market sales.

The intelligence firm said the reports would arm Coreco’s brokers with relevant information, provided quickly and accurately, which would allow them to better advise their customer’s individual needs.

Andrew Montlake (pictured), Coreco’s managing director, said: “These can really help to guide our clients, and brokers, as to the likely value of the property they are remortgaging or looking to purchase. This enables us to set expectations accordingly and help to remove the prospect of time-sapping down-valuations.

“Clients expect so much more these days in terms of service and the customer journey, and rightly so, and anything brokers can do to make the mortgage experience more satisfying by adding value at every stage will enhance this.”

Hometrack’s product and technology vice president Spencer Wyer said: “The pandemic has underlined the need for automation in the property valuation market, with digital valuations the only viable option in a time of social distancing.

“While the world is opening back up now, that need for speed has in no way diminished. We look forward to supporting Coreco and its brokers with the most accurate property valuation reports in the industry, and to growing our relationship for the future with new and innovative products we are working on for brokers.”

Hometrack has recently partnered with Yorkshire Building Society and Leeds Building Society to offer a climate change risk product to help evaluate its impact on their mortgage portfolios.

It has also appointed open finance data, intelligence and payments platform Moneyhub as its preferred open banking partner.

Majority of brokers want lenders to remove pandemic-based criteria – poll result

Majority of brokers want lenders to remove pandemic-based criteria – poll result


Around 67 per cent of brokers said they wanted lenders to remove pandemic-based criteria as soon as possible, according to the latest Mortgage Solutions poll.

Meanwhile 17 per cent said they wanted lenders to remove them at the end of this year and 16 per cent said changes should not be made any earlier than next year.

During the pandemic lenders brought in a range of measures to ensure that they lent responsibly, such as requiring larger savings in reserve, removing higher LTV products or not lending to those on government support.

And while brokers said that some lenders were already rolling back some pandemic-based criteria, full removal may be some way off.

Coreco’s managing director Andrew Montlake said: “There will obviously be a lingering on where furlough is concerned particularly for some businesses in certain higher risk areas like travel and entertainment, which is to be expected. Lenders still have to go through their due diligence, but this should be more on a case-by-case basis rather than a catch-all policy.”

Miles Robinson, Trussle’s head of mortgages, added that many lenders were simplifying their requirements with the majority now requesting applicants show three months’ statements to show their finances and income were stable.

He added that some lenders had introduced cut-off points to Covid-19 support schemes. For example, they wouldn’t lend to those who took government support out in the last three months but those who took them out a year ago could be eligible. He said this was “proving helpful to many”.

However, Robinson said that despite the economy improving and the lifting of most Covid-19 restrictions lenders were still being cautious.

He said: “It is understandable that many lenders are reluctant to remove all pandemic-based criteria from mortgage applications. Whilst many restrictions have now been lifted, it is important to note that we are not yet clear of the uncertainty of Covid-19 which could then resonate back in the property market.”

Mortgage Advice Bureau’s head of lending Brian Murphy said it was not surprising that most advisers wanted criteria changes to be “reversed and normalised” imminently, but lenders needed to see the full impact of government schemes first.

He said: “To date the impact the pandemic has wreaked on the economy, particularly in terms of unemployment, has not been as severe as most were forecasting. Once the last of the government support measures have ended, there will no doubt need to be a period of reflection while lenders assess the consequences before normalising criteria to pre-pandemic levels.”

According to Knowledge Bank’s operations director Matthew Corker, searches for Covid-19 related criteria on its criteria platform are down 90 per cent in virtually all lending.

Corker said: “While the numbers have dropped dramatically, there are a few searches for pandemic criteria. Although lockdown restrictions have ended some are still on furlough, and we are not fully out of the woods yet, so lenders are rightly being cautious about removing pandemic criteria.”

He added that it is likely that there would be further changes to criteria as the furlough scheme ends, and the economy continues to improve.

Nicholas Morrey, John Charcol’s product technical manager, said that the challenge for lenders centred around affordability and how that fits with the ethos of responsible lending.

He said: “If someone applying for a mortgage is on the same income as they were before the pandemic but has taken on financial commitments they did not have before, like government loans, then lenders will struggle to lend them the same amount they did previously, let alone more.

“But should that be put down as a pandemic-related cost and ignored? Of course not. If someone has been furloughed but is going back to work in the same role, and for the same money as before the pandemic should they have their borrowing capacity curtailed? Absolutely not.”


Lenders and self-employed borrowers 

Brokers said that a significant issue would be around how lenders approach self-employed borrowers.

During the pandemic some lenders became more selective around self-employed lending, not lending to those who took out government support or lending to certain sectors.

Morrey explained that in the fourth quarter the most recent accounts were not up-to-date enough to form an accurate picture of income and affordability.

He added that if lenders used the most recent year, 2020 to 2021, as part of their affordability calculations then it would possibly impact applications for around three years. This means that applications made in 2022 could be impacted by government support taken in 2020.

Morrey said that Santander’s move to ignore this tax year’s figures, opting to use the year prior, was “forward thinking”. But he added that there could be a drop in self-employed applications in the future.

“I expect others to release their intentions in this area over the next month or they will likely see a sudden drop off in self-employed mortgage applicants whose situations are back to normal or even better,” he said.

Montlake added: “Not all businesses are in trouble just because they have taken advantage of government support measures. Lumping all the self-employed into the same boat, even companies who have prospered during these times, is hard to explain to those who feel they are in a good position to buy a property.”

Brokers want the same quality of support when using lender live chat – Montlake

Brokers want the same quality of support when using lender live chat – Montlake


Speaking on a panel debate hosted by Accord Mortgages in association with Mortgage Solutions, Montlake (pictured) said technology had come to the fore over the last 12 months and brokers had become more used to it. However, he said they needed to feel like they were getting the same level of service from all channels. 

He added: “There are some lenders where it doesn’t seem to be the case. It’s about that consistency, it’s about communication.   

“With some lenders, we’re getting a different answer on live chat than we are on the telephone so that kind of thing has to stop. As more and more of us start to work from home and don’t have that knowledge share in the office as much as we did, I think it will start to improve.” 

Jeremy Duncombe, director of intermediaries at Accord Mortgages, said its support team were the same both online and over the phone. 

The lender switched to remote operations as soon as the lockdown was announced allowing it to accommodate more conversations with intermediaries.  

Duncombe said the seamlessness of its process encouraged brokers to pick up the phone, but urged them to use more self-serve online resources to avoid being held up on the telephone. 

“We absolutely want to talk to people, we absolutely want to answer questions on webchat but there is a lot of help out there to allow brokers not to have to queue,” he said. 

Watch the video below [10:03] hosted by Paula John, editor in chief at Mortgage Solutions joined by Jeremy Duncombe, director of intermediaries at Accord Mortgages, Kevin Roberts, director of Legal and General Mortgage Club and Andrew Montlake, managing director of Coreco.