It looks as though we’re beginning to see what the new mortgage normal might look like in the post-lockdown environment and it may involve lots of to-ing and fro-ing between advisers and lenders, particularly in the specialist lending space.
You’ll notice that I didn’t write ‘post-Covid-19 environment’ because it seems obvious that the major issues around the pandemic are not going away any time soon, and it looks likely we’ll see more local lockdowns as has recently happened in Leicester.
The need for continued caution and adherence to social distancing should be obvious to all. Whether we get that is another thing entirely, however.
I wish to concentrate on the mortgage perspective, where we are starting to see the decisions made during lockdown impacting on mortgage accessibility, particularly for those who may have taken mortgage holidays or accessed some of the government support such as the self-employed scheme or business loans.
I sense a growing degree of frustration from advisers in terms of how some lenders are approaching this, with uncertainty about lender policy in this area meaning that borrowers are already being turned down for loans when they have simply accessed widely offered support.
Perhaps this will sort itself out in time, but it chimes most evidently with mainstream lenders who may not be overly committed to lending to those who are viewed as more specialist currently.
This may seem odd given the expectation that we’ll see a burgeoning demand for specialist residential mortgages in the future because of the impact of the lockdown. It seems a safe bet that we’ll see more homeowners slipping into the adverse bracket as the number of CCJs and arrears accrued grows this year.
Demand is also likely to grow from the self-employed if mainstream lenders continue to operate a blanket-style underwriting approach to those who have accessed either government support or bank loans.
Of course, lenders are well within their rights to operate in such a way, but there needs to be more transparency upfront so that advisers don’t take clients down routes that are already closed.
There is an opportunity here across the entire specialist space, and those challengers who can look at these borrowers in a different way may well see a large uptick in business.
Certainly we are looking at the provision of more specialist lending-related conveyancing products to support the anticipated uptick in activity because everything points to its continued growth over the short- to medium-term at least.
Mark Snape, managing director, Broker Conveyancing
