After spending so many weeks in lockdown, I suspect that advisers, like many others, will be looking ahead to a potential easing of restrictions after this weekend. The past weeks have presented huge challenges for our industry. We have all had to adapt to work and ‘live’ from home and the implications of the coronavirus on the nation’s health, on the way we can move forward as a society and the economic, not to mention the housing market, weighs heavily on our minds.

For advisers, the challenges have been significant. They have had to balance looking after themselves and their families with supporting colleagues, keeping their businesses afloat and helping the customers who rely on their support and advice. An easing of the lockdown should make that job more straightforward, but it will bring a host of challenges for the industry too. Thousands of consumers have put their housing plans on hold, sought payment holidays or are ‘frozen’ halfway through their mortgage application. These customers need help and they need advice on what next steps they should take as we all slowly start to re-emerge, blinking, into the summer months.

Starting from square one

Advisers will be asked to manage expectations. The housing market has been on hold since 23 March and we’re unlikely to see it quickly return to its pre-Covid state. Customers who will have had their mortgage applications put on ice will want to bring their cases to a successful conclusion. However, any initial euphoria over the opening up of the market and, particularly, physical valuations starting again will need to be tempered with the possibility of delays as surveyors work to get up and running. Many in the sector have been furloughed and it will take time for businesses to get up to speed with new guidelines on distancing at work or additional training. We’re also likely to see a large backlog of valuations that will need urgent attention, so while the market is starting up again, a degree of patience will be needed.

Under pressure

Advisers may also face additional responsibilities as the market revs up. We are entering a ‘new normal’ and it is unrealistic to expect that everything will immediately revert to the way it was before.

Many lenders are sticking to their normal rules around timeframes before they ask for additional documentation. But we are seeing some lenders requesting that current cases are reviewed to ensure that consumers who may have been impacted by the crisis can continue to afford the mortgage they applied for, particularly with millions now on the government’s furlough schemes. Advisers must remain in contact with their clients at this time and be ready to inform lenders of any changes to a clients’ circumstances (which may lead to lenders requesting further information about the borrower’s income). This extra investigative work could put further pressure on advisers, who may be required to evaluate new income positions or potentially cancel some cases altogether.

This extra work will be arriving at a time when advisers’ incomes and earnings are already being squeezed by the lack of purchase business. Much of the efforts advisers will undertake to support clients will ultimately help lenders, so I would again urge lenders to ensure the procuration fees they are paying to advisers on product transfers match those that they would pay on new business.

Getting borrowers back on track

As post-lockdown life begins, payments deferrals are also likely to present both opportunities and challenges. There is real concern about a potential ‘U’ shaped spate of enquiries on payment holidays. Lenders have already faced the challenge of the initial flood of enquiries as customers contacted them at the beginning of the crisis, and as the payment deferral window moves to a close in coming months, we could see lenders inundated again with customers looking for help and advice.

Advisers will have a particularly important role to play guiding these consumers as they come to the end of their payment holiday. One in seven mortgages now have a payment deferral and the customers behind these mortgages will likely need to consider new options to keep repayments as low as possible. To manage this pipeline of business, advisers should be preparing their clients now and there is already evidence that this is the case. This past week, interest-only has been the top search term used by advisers for Legal & General Mortgage Club’s SmartrCriteria tool, which indicates that advisers are already looking for options for their customers to help them lower their monthly repayments. Others will need guidance on remortgaging to lock into lower rates or to extend their mortgage term to reduce what the client pays each month.

Despite these potential challenges, we can all still look forward to the easing of some of the restrictions we’ve been living with, and to a reenergised housing market. The advisers ‘to do list’ might look dauntingly long after lockdown, but every interaction with the client is an opportunity to demonstrate the value of advice, discuss options such as new mortgages or protection and to strengthen and deepen the customer relationship. Amid a sea of negative headlines, it’s imperative that we take the good news where we can find it!

Kevin Roberts, director, Legal & General Mortgage Club