2020 - a sea of unknowns
By Hannah Withers | 11 June 2020
SUMMARY: National Account Manager at TSB Mortgage Intermediaries, Hannah Withers, looks at the short-term and possible longer-term impacts of the pandemic on the home buying industry.
2020. What began as a momentous year for the mortgage market quickly turned into a sea of unknowns.
We had to adapt and respond to challenges at pace. The biggest transformation for us was the need to give our Partners suitable resources to work from home; without this, we wouldn't be able to support you and your customers effectively.
In all our businesses, our focus was immediately on ensuring our customers were safe, well and supported - whatever their financial situation. It’s why we quickly implemented the tools for customers to request a mortgage repayment holiday online, as well as new, temporary policies for ID&V to avoid unnecessary barriers as the UK entered the first phase of lockdown.
This included an increase in automated valuations to prevent any build-up in the pipeline; something we implemented very quickly. We also extended our policy to include desktop valuations where an automated valuation failed.
And, as over 25% of employed people were furloughed in the UK, it was clear we needed to review our treatment of income, too. We had to balance responsible lending, all while supporting the market.
We hope it has brought you closer to your customers, as you were there to support them at this uncertain time; we saw a higher percentage of customers switch their mortgage and benefit from lower interest rates; plus, we have already gained a lot from the new processes on our highly-rated mortgage platform, which may not have happened so quickly under ordinary circumstances.
What do we think the long-term impact will be?
It’s important to remember the situation we now find ourselves in is not the same as the recession in 2008. Banks have access to funding and, over the past few weeks, we have seen more lenders returning to the market in areas that they had initially withdrawn from - with very competitive rates.
Of course, it is difficult to know the longer-term impact of Covid-19, and especially the impact of unemployment that a lot of our customers are facing. That said, we have already seen reassuring levels of activity, suggesting a good level of consumer confidence.
With estate agents re-opening and new build construction resuming in a number of areas, these are positive signs that the purchase market will start to grow. More lenders will feel confident returning to higher LTVs, providing additional support to mortgage customers.
We believe this behavioral change will make the whole process easier, using technology to support the processing of mortgages and identification of customers. Hopefully,more sectors will follow and allow technology to act as an enabler; for instance, providing quicker and easier transactions for customers remortgaging or purchasing a new home.
Whilst we don’t know how long the road to full recovery is, or how many bumps there may be along the way, the initial signs show that a lot of customers haven’t been deterred from achieving their goals. Whether that be to buy a new home or save money on their current mortgage, customers are certainly becoming more active once again.
For Professional Adviser Use Only.
Hannah Withers is National Account Manager at TSB Mortgage Intermediaries