Before I examine the sector at present, let me just say: my name’s Jeni, and I am a mortgage broker. I have a pipeline of more than 100 live cases at the moment, so I am in this boat with you all. And I feel your pain.
From applications taking an exceptionally long time to be assessed, and valuation appointments being as rare as rocking-horse poo; to rates being pulled at short notice; having to get up at the crack of dawn to try and beat every other broker who is doing the same; trying to secure the high-LTV product my client needs, only to find the lender’s system has crashed; not to mention declines coming out of my ears – and above all the thought that, tomorrow, I’ll get to go through it all over again.
Lenders under strain
It is so easy to blame the lenders for this car crash of a market that we find ourselves in. But actually it is worth taking stock of how we got here; and, maybe, explaining this to your clients will help to placate them when you deliver the news that it’s going to take three weeks for their lender to review the payslip they just sent to you.
At the start of lockdown, lenders were faced with the government’s announcement of the mortgage payment holiday scheme – something most had never offered nor had systems able to deal with. While in the midst of the national lockdown, lenders had to move staff around to cope with circa nine million requests for mortgage payment holidays and the workload of subsequently managing them, at the same time as working out how to enable staff to work from home effectively.
So these staff members are not in their usual roles but are being used to help those in financial difficulty, all while adapting to the new normal. Additionally, some lenders were obliged to furlough staff and some, sadly, to make redundancies. So lenders would have been lighter than usual on their underwriter headcount.
And then, pretty much out of the blue, we were gifted a stamp duty holiday and boom! – applications went through the roof and lenders were swamped.
Of course, some lenders have handled the past six months better than others. But I am certain every lender is seeking a balance between providing an offering to the market that will support buyers, remaining competitive on price, and giving a service that means you and your clients will get an offer this side of Christmas.
The key thing is we are all in this together and, once the storm has passed, we will still need to work with the lenders. So burning bridges is to be avoided at all costs.
That’s not to say lenders should be given carte blanche, and bad decisions and practices should not be called out – but patience and understanding can go a long way. This applies also to the other ‘parts’ of the mortgage chain. Surveyors were allowed back out on 18 May, enabling the housing market to unstick and provide confidence to the capital markets so that they could open up again. Let’s take a moment to appreciate that surveyors were out inspecting properties in 30°C-plus, wearing full PPE, while the rest of us sat in our home offices, wearing very little, I suspect.
Likewise, solicitors have remained open throughout and have had to quickly adapt some fairly archaic practices to keep conveyancing moving.
I mention these guys because it has been seen in the past that, as we point fingers at lenders, they then point at the surveyors and solicitors.
This storm is long and uncertain. As we head towards the end of the year with no clear end or resolution – and with new restrictions on our freedoms recently imposed – the mortgage world is likely to continue in this manner for the foreseeable future.
So my advice is this: educate your clients, make sure you update them regularly – even if you have no news – be certain of your lenders’ timeframes, and take solace in the knowledge that these chaotic times will, eventually, pass.
Jeni Browne is sales director at Mortgages for Business