But only those on the receiving end of this service, mortgage brokers, can really tell if lenders are delivering on their promises.
So this week, Mortgage Solutions is asking: How have lenders reacted to the coronavirus crisis?
It’s important to acknowledge that the whole market has had to contend with a staggering amount of change in a very short space of time.
Intermediaries are well aware of that as they move to new working practices whilst also trying to assimilate the rapid shift in the market.
Lenders have had a lot to deal with, affected like most businesses by a limited workforce as they cope with substantial demands from existing customers wanting to take advantage of a payment holiday. To build a process and online support for those customers to ease telephone traffic is some achievement.
Communicating that change isn’t easy but a number of lenders such as Nationwide/TMW have sought to keep brokers updated through email communications and solid online coronavirus reference material.
Other lenders were quick to recognise that working at a distance would likely cause more issues around the supporting documentation required for ID and address verification.
Some were quick to support intermediaries and the market with innovative thinking and a positive approach to this potential hurdle. Although not alone, TSB stands out as a good example of a lender that developed quick and practical solutions in this area.
The plaudits go to lenders that brought a measured approach to lending limits. Rather than follow the pack and pull deals en masse, some like Natwest were clear in communicating how the lack of physical valuations would affect their capability.
However, the star performer has to be HSBC which has stuck to its guns in supporting the market with as broad a range of products as it possibly can through these difficult times.
Brokers have long memories and they will remember which lenders have gone the extra mile during the current crisis.
Not many have covered themselves in glory so far, but for me, one lender has really stood out and that’s HSBC, who have really done everything they can to help brokers.
They are using automated valuations and continuing to lend at high loan to values (LTVs) up to 90 per cent. They are operating on a daily tranche system so it’s all done fairly, and helps them control their exposure so they can continue to support the market for as long as necessary.
With most other lenders you’re struggling to get much above 75 per cent loan to value (LTV) and they aren’t prepared to rely on alternative valuations. An exception would be Nationwide, who are using drive-by valuations and lending on that basis.
Business development managers (BDMs) are in pretty much the same boat as brokers – they don’t have the same access to underwriters they will have had before and if the lenders aren’t lending, there’s only so much they can do.
The demand is still there and once we come out of lockdown, I’m expecting the market to rebound strongly.
There is also likely to be pressure on lenders to cut rates, to reflect the record-low base rate. That will help stimulate first-time buyers especially, who will look at what they’re paying in rent and how that compares with very low fixed-rate mortgages.
I’m hopeful that we’ll see a few more lenders returning to higher-LTV lending soon. Brokers won’t be hurrying back to the lenders that let them down now, and they need to be aware of that.
One of the crucial things that lenders can do during this worrying and uncertain time is provide clarity, they need to be decisive and clear with their policies and processes and communicate those effectively with both the end customer and intermediary partners.
In practice, this means customers have somewhere to go like the lender’s website which talks them through the process and effect of solutions like the payment holiday. For advisers, it means being kept up to date on whether and how the lender is dealing with new applications.
In such a fluid situation, being agile with solutions and providing easy access to information on any change is crucial. Some of the lenders we’ve been impressed with include Santander, Halifax, HSBC, Coventry Building Society and Nationwide.
The support BDMs provide is always important and responsiveness has always been high on that list. We’re encountering completely new issues and a number of BDMs have excelled at working alongside the broker trying their best to find solutions as quickly as possible.
I’d say that flexibility and responsiveness are most important to intermediaries right now.
In terms of broker support, a few BDMs have really impressed us, Richard Skinner at Nationwide, Richard Pomroy at NatWest, Helen Spear at Coventry, Jon Rawley at Skipton, and Edwin Norry also of Nationwide.
Updated to correct that HSBC is only conducting valuations up to 90 per cent LTV.