In this most unusual of years, I expect Christmas 2020 will be somewhat different from what we usually have.
The fate of this year’s festive season rests upon the easing of social distancing measures – but whatever happens after lockdown, it’s important that we don’t let the current situation dampen our Christmas spirit. As advisers, buyers, and lenders prepare themselves for a very busy lead up to the holidays, what should we all be thinking about now as prepare for December and year end?
Buying frenzy
Well, the busy holiday season has already kicked off in mortgageland! Just like those scenes from TV where people are charging into department stores to do their Christmas shopping, our mortgage market is experiencing a similar buying frenzy.
In lockstep with the usual consumer spending spree on Black Friday, last week was our largest ever week, with nearly £2.5bn in lending through Legal & General Mortgage Club. I’m also expecting these numbers to grow in the lead-up to Christmas as we head towards some of the busiest completion days of the year. Maybe the lack of Christmas parties, dinners and live Award ceremonies is a blessing after all!
Technology shift
Although, perhaps this year, the focus should really be on Cyber Monday? With the e-commerce revolution that took place at the beginning of the first lockdown, mortgage customers are now used to the way digital elements have been integrated into their services.
Advisers will continue to adapt to these customer expectations. While the industry moved quickly to equip their workforces to operate from home, we are faced with a market experiencing unprecedented demand and longer timelines for completion.
The challenge for the industry will be to continue adopting technologies that can help streamline mortgage applications. As more customers are happy to transact digitally, advisers are understanding how accessible and efficient these technology solutions can be.
Topping up the deposit
With global travel restrictions in place, Christmas parties on hold, pubs closed, and no certainty over whether we’ll be allowed to mix with family and friends over the holidays, some potential homebuyers may find that they spend a bit less on Christmas than usual.
Earlier this year, L&G Mortgage Club research showed that for the majority of first-time buyers, the pandemic has allowed them to save an extra £100 to £200 a week. There may be fewer high-LTV mortgages for borrowers, but perhaps these savings will help potential homebuyers ‘top up’ their home buying funds?
Help to Buy
To make the festive season even more manic, Homes England has confirmed that buyers will need to complete their Help to Buy reservations and submissions by 15 December. This deadline is coming in at a very busy time for the mortgage industry. Just as you should avoid doing all your Christmas shopping at the last minutes, advisers need to work with their customers to ensure there isn’t a last-minute rush to submit before the deadline. If these timelines are too aggressive for clients, the second phase for Help to Buy begins the day after on 16 December.
It’s important to note that some homebuyers may not qualify under the new scheme, which will be limited to FTBs and feature regional price caps. Of course, advisers will play a critical role in helping buyers navigate these changes in the new year and guiding to them to more appropriate options if they no longer qualify.
Another busy year ahead?
Looking to the new year, advisers need to be aware that there is a large proportion of two- and five-year fixed rate maturities coming to an end. In 2021, there will be a total of 707,270 residential maturities.
With so many homeowners looking to re-finance, transfer, or re-mortgage, advisers should be prepared and on the front foot with clients’ and lenders in the new year. With some clients having been affected by furlough, opted for a mortgage payment holiday, or sadly been made redundant this year, clients will require adviser support to understand all their options. This gives advisers an opportunity to contact to clients and see how they can help. Perhaps that could be one of your new years’ resolutions?
Looking after yourself and others
Despite the busy season, advisers and lenders shouldn’t lose sight of their personal and mental
health. Many advisers are increasingly feeling the pressure to deliver more for customers, and it may sometimes be overwhelming.
Everyone reacts to external pressures differently and as an industry we need to be mindful that everyone’s capacity to cope is different. Advisers need to look after not only themselves during these tough times but also pay attention to any signs of strain their colleagues may be exhibiting too.
Relax this Christmas and try to find some quiet moments with everything that has gone on this year. These are challenging times, but hopefully the promise of an effective and distributable vaccine is getting closer.
No one could have predicted the record levels of demand once the housing sector re-opened this year. While this has created its own sets of challenges for buyers, sellers, advisers, and lenders, I’d recommend enjoying the mortgage market being busy – so take time to reflect and enjoy the volumes at the moment!
Kevin Roberts, Director, Legal & General Mortgage Club
