Covid-19 has put an enormous strain on mortgage firms of all sizes these past few months. Product withdrawals, lender withdrawals, staff shortages and remote working all risked bringing the sector to its knees at the height of the crisis.
But the mortgage show went on – just about – with lenders and brokers doing their utmost to ensure the market did not go into complete lockdown.
While lenders could perhaps be forgiven for not bringing their A-game during such turbulent times, it has also been a period when intermediaries have needed and relied on their support more than ever before. So, which lenders stepped up to the challenge during the Covid-19 crisis?
Panel members
David Hollingworth – associate director of communications, London & Country
Sarah Tucker – managing director, The Mortgage Mum
Matt Tilbury – senior mortgage and protection adviser, Just Mortgages
Greg Cunnington – director of lender relationships and new homes, Alexander Hall
Matthew Hillyer – associate director, Largemortgageloans.com
Aaron Strutt – product and communications manager, Trinity Financial
Gemma Harle – managing director of Quilter Financial Planning’s mortgage network
David Sheppard – managing director, Perception Finance
Rob Clifford – chief executive, Stonebridge Group (*scores represent those of MoneyQuest Mortgage Brokers)
Jonathan Clark – mortgage partner, Chadney Bulgin
HSBC
HSBC’s place at the top of the table marks a remarkable turnaround for the lender. Until it opened its doors to the intermediary market in 2014, it used to rile the broker community with its direct-only stance.
“During the last recession, HSBC offered great rates direct, which we couldn’t access,” says Trinity Financial product and communications manager Aaron Strutt. “This time, brokers could submit mortgage applications to the bank and it has made life easier,” he says.
Just Mortgages senior mortgage and protection adviser Matt Tilbury describes it as “the only lender to truly stand by brokers” during the difficult times – excelling on service and products.
Meanwhile, Perception Finance managing director David Sheppard says: “HSBC was the only large lender to maintain 90 per cent LTV lending. If it could do it, why couldn’t the others?” He adds: “Its service has been superb.”
Nationwide for Intermediaries
Nationwide is another lender that has seen huge recognition on the scoreboard.
“The introduction of its interest-only policy was a real show of support for the intermediary market,” says Alexander Hall director of lender relationships and new homes Greg Cunnington. He describes it as “one of the best”, due to its competitive products and service levels.
Chadney Bulgin mortgage partner Jonathan Clark praises its consistent service and “detailed and regular updates.”
The Mortgage Mum managing director Sarah Tucker agrees: “Nationwide has been fantastic in terms of service and updates,” she says.
Stonebridge Group chief executive Rob Clifford says its MoneyQuest advisers “love” Nationwide, but adds: “We wish it would pay a fair and full fee for product transfers, like other lenders.”
Halifax Intermediaries
The pressure of the Covid-19 crisis has seen Halifax slip two places. Largemortgageloans.com associate director Matthew Hillyer feels the lender was initially hit hard by the lockdown due to processing-centre difficulties.
“However, it showed great flexibility and returned to offering higher LTV products as soon as it was able,” he adds.
Strutt says: “It has not been as quick as usual but given that we are in the middle of a global pandemic, that is quite understandable.” He welcomes its use of AVMs to get things moving and its “great” rates.
However, Quilter Financial Planning’s mortgage network managing director Gemma Harle feels it “let brokers down” during the crisis by withdrawing products and offering “poor” product transfer rates.
RBS (NatWest Intermediary Solutions)
NatWest shares joint-third place with Halifax. Hollingworth feels the lender maintained a good product range, with clear guidance on its use of automated and remote valuations. “It was ready to advance a sizeable number of frozen applications once physical valuations could take place,” he says.
Sheppard says that, despite the closure of its broker phone lines, it was still possible to get quick answers from its BDMs.
Cunnington praises its large-loan department: “Underwriters working remotely and manually assessing applications led to some great client outcomes,” he says. Harle describes it as the “top lender” for Northern Ireland. “Easy to deal with and excellent service,” she says.
Nonetheless, Tucker feels that although it has been prompt on service and updates, its underwriting has become stricter. “Some old cases have been checked on and challenged, with others taking longer to underwrite than normal,” she says.
Santander for Intermediaries
Santander has seen a one-place gain. Tilbury describes it as “solid and dependable” – despite feeling it can ask “needless” questions that can cause delays.
Cunnington calls it “one of the best” Help to Buy lenders and welcomes its return to this market. “Its early adoption of desktop valuations on new-build is a real show of support for this sector,” he says.
Hillyer has been a fan of its “regular and clear updates,” but says: “Cutting its maximum loan size to £500,000 excludes it from the large loan space, where it had been building an excellent reputation.”
Clifford describes it as a popular lender, but says: “We get the impression it is more aggressive when it comes to contacting broker-introduced cases towards the end of product periods.”
YBS (Accord)
Accord has dropped three rungs since our last residential ratings.
Hillyer describes it as “excellent and flexible”, particularly with complex cases, while Cunnington says: “Its pride in service standards really shows and advisers love working with it.”
Hollingworth feels the lender has been good at communicating its “raft” of product and criteria changes.
“Its clear guidelines around the use of remote valuations and quick mobilisation of physical valuations bodes well for the future,” he adds.
Tilbury praises its great BDM and service, but feels it can lag behind others on rate.
Clark also feels its rates have been a little off-pace lately, but says: “Its flexible underwriting, coupled with a great product-transfer offering, still appeals to many brokers.”
Coventry for Intermediaries
Coventry’s service has seen it climb one place. “Coventry offers brokers a great service and does everything possible to get cases agreed,” says Strutt. “Its products are still great and our brokers have been pleased with its service,” he adds.
Clark also feels Coventry’s service has stood up well in recent months: “A comprehensive product range for both new and loyal customers, coupled with excellent BDM support,” he states.
Hillyer says: “Points to Coventry for staying in the high LTV space as long as it could.” Meanwhile, Cunnington comments: “A great lender based on service standards; a real pleasure to work with.”
Wild Card: West Bromwich
“A very difficult time to feature as a wildcard entry for West Bromwich,” says Hollingworth. “It’s a lender with so many positives in its ability to turn out well priced products that appeal to the right core markets,” he says. He describes its pandemic response as a “rollercoaster” however, but adds: “It did show it wasn’t afraid to change tack quickly as the situation developed, bringing purchase back quickly and reviewing its furlough income to allow greater flexibility.” Strutt says although the lender temporarily halted new mortgage applications when lockdown was announced, it did allow AVM’s on its remortgage range up to 75 per cent LTV and on houses valued up to £500,000. “It offered one of the best interest-only polices, making it popular with borrowers looking for part interest-only and part capital repayment mortgages,” he says.
Barclays
Barclays has seen the biggest fall, dropping four places.
“Always there or thereabouts with products and proposition, just let down by overseas processing teams and slow response times,” says Tilbury.
Tucker calls its systems “clunky”. Hillyer, however, has praise for the lender. “Many of its overseas processing centres were shut down, so it took the sensible step of reducing LTVs to ensure it could still deliver a good service,” he says. “It increased its product offers as it was able to, overall dealing with the situation very well.”
Despite introducing a booking system for funds, Sheppard commends it for maintaining its product offering, but adds: “Its message regarding AVMs was a bit confusing.”
Virgin Money
Virgin is still hovering at the bottom of the table, albeit gaining one place. Sheppard had hoped Virgin would offer higher LTVs but welcomed its “decent” product-transfer rates. He does, however, feel its product-transfer process needs streamlining.
“Requiring a signed acceptance form back within a specified timeframe should not be necessary,” he feels.
Tilbury felt its rates were good but its service didn’t quite match this at times. Meanwhile, Hollingworth says the lender was one of the very few to “rule out the use of any furloughed income”.
Harle, however, welcomed its “flexible underwriting” for company directors and its “straightforward” product-transfer service.
TSB Bank
Sitting at the bottom of the table, TSB received a mixed response from the panel.
Clark feels TSB kept a low profile during the Covid-19 crisis, offering what he describes as a “rather limited” product range. Hollingworth felt that, although its deals did contract, there was a lot to commend about TSB’s response: “Strong, positive action was taken to address the difficulties of dealing with customers at a distance,” he says.
Harle also felt it offered “good BDM support.” Tucker, however, experienced some delays: “One of my team put a remortgage case in on 24 March and six weeks later nothing had moved, despite it fitting the criteria for a desktop valuation. The valuation was eventually carried out on 6 May.”
Future challenges
The mortgage market may never know times like this again – let’s hope so, anyway. Although the past few months have not been easy for either brokers or lenders – and certainly the consumer – the market has, on the whole, coped extremely well with the enormity of the situation and the threats it poses. This bodes well for any future challenges that may come the mortgage market’s way.
