Tenet and guest bloggers share their views and experience on a range of topical issues

Home Tenet Blog

Reasons to be optimistic

By Caroline Mirakian | 22 June 2020

SUMMARY: Caroline Mirakian, Head of National Accounts at PepperMoneyUK, reflects on how her role has changed during the COVID-19 crisis, and reveals some reasons to be optimistic for brokers and lenders as the mortgage market continues to resume.

Pepper Money logo

When the severity of COVID-19 became clear in March, we were lucky as a business to already have the systems and structure in place to be able to adapt very quickly and mobilise all our staff to home working in a matter of days. This meant this was all in place before the official 'lockdown' and I'm now on my 14th week at home.

It goes without saying that it's been a strange time for all of us, but I've taken the time this week to reflect on what has happened as well as review the opportunities that are now available to us all. 

I speak to people on a daily basis and they often comment that it must be especially hard for me in my role and the impact more severe than others. My response is that, actually, it's not all bad! Yes, whilst my daily activities may have changed, I've adjusted to a new way of working and can see many positives which will shape my outlook on activity moving forward.

Although I've been unable to have my usual face-to-face meetings, I think since lockdown I've spoken to more of our broker partners than ever before with video and phone calls being the method of communication during these past few months. For me, this can only be a positive. Plus, being at home means I can also eat meals with my children before they go to bed. There is no replacement for face to face contact, but I've quickly learned that there is certainly a mixture to be had and that it's not always the only option. 

So, what are the main issues impacting the market? 

Undoubtedly, it’s the speed that the COVID-19 pandemic hit and the mandatory lockdown as a result. The knock-on effect on the market has been tremendous and lenders have had to make quick decisions on the size and makeup of their product ranges, and what their appetite will be in the short term. This has been particularly important in lieu of the volume of borrowers who applied for payment holidays and are now looking for potential extensions. This doesn't just hit the pockets of lenders but needs to be managed in terms of resource very carefully so they can dealt with swiftly for those in need of help. 

I don't believe we've truly seen yet what the full impact of COVID-19 will be for us all. Although we have seen clear green shoots of recovery, especially in the ability for people to physically move home and for lenders to carry out physical valuations, there does remain uncertainty in the shape and timescales of a full recovery. Brokers have reported positive growth in product transfers and remortgages, meaning they've been able to write business steadily in those areas while the purchase market returns. 

Unemployment en masse remains a huge concern for many and we'll see more on this when the government's job retention scheme comes to an end in October. 

That said, consumer confidence is still building, according to broker partners who report enquiries reaching 95% of pre-COVID levels. Then there's the ongoing debate about higher LTVs, with some lenders coming back into the space but then withdrawing again. Will more lenders join or is this product set a temporary stimulus?

Property prices are expected to drop between 5-10% - the higher regional drops are expected in locations such as Crawley where there are airline community workforces based. This again isn't yet clear as surveyors are still using pre-COVID valuation figures.

Whilst the signs are there, have the last few weeks fundamentally changed the industry?

Only time will tell, but personally I am delighted to see our business and the wider market adopt a much more agile approach to problem solving. Challenges such as deskbound valuations that would normally have taken months (if not years) to develop a solution for have been implemented quickly. Solutions along with product design have been delivered within days and with no less compliance, I hasten to add!

It's also pleasing to see organisations move the bulk of their operations to remote working, breaking down the geographical barriers of having to work from a head office location. It cannot be underestimated what a fundamental part technology has played in all this; I, for one, am glad we didn't face this same challenge ten years ago!

Overall, I think you can always find positives and opportunities in every situation, no matter how bleak it may seem. Yes, things are different and we’re having to operate in a way that we’re not used to, however, change is a good thing and together as an intermediary and lender community we could embrace it, continue to adapt to it, and most importantly, support each other and our borrowers through it. I'm confident the mortgage industry will play a key role in getting the economy moving again.

If one thing's for sure it's that the role of the broker is more paramount than ever. The more complex a situation becomes, the more valuable professional advice is. If I could give one top tip it'd be keep in touch with your existing client bank and offer that help and support as their circumstances change. 

If you’d like to find out more about Pepper Money, talk through a case, or just catch up on what we have available, please contact one of our fantastic team on 03333 701 101.

For Professional Adviser Use Only.

Caroline Mirakian is Head of National Accounts at PepperMoneyUK