This was one of the questions posed at the recent Power of 8 virtual event run by lenders to answer some of the burning questions on brokers’ lips, writes Emily Smith of Hinckley and Rugby Building Society.

Organised with the intention of examining current and upcoming trends in the market caused by the impact of the pandemic, the event considered areas in which lenders had seen an uplift and what the biggest opportunities for brokers were currently.

Taking the hot seat was Jeremy Duncombe from Accord Mortgages, Colin Fyfe from Hinckley & Rugby Building Society, Paul Adams from Pepper Money and Paul Lewis from Mansfield Building Society.

Is restricted criteria the end of flexibility in underwriting?

Jeremy Duncombe, director of intermediary distribution at Accord Mortgages, was not so sure.

He said there was still an opportunity to be flexible and there had been a shift in the last few years to lenders using manual underwriting to make individual decisions, while mainstream lenders had restricted their criteria.

Duncombe said if brokers kept talking to the lenders when they were presented with more complex cases, then common-sense decisions could be made based on the circumstances.

Colin Fyfe, CEO of Hinckley & Rugby Building Society supported this view, referencing the society’s daily Mortgage Referrals Committee – where a panel of mortgage experts, including executive-level decision makers discussed unusual cases presented by brokers.

This allowed customers with individual circumstances to be provided with solutions, often receiving a same-day decision from the committee, he explained.

Which lending areas have seen an uplift?

Paul Lewis, national development manager at Mansfield Building Society, said shared ownership was a thriving area.

Indeed, people were looking to carry on buying houses and shared ownership helped them get onto the property ladder.

He also explained this period meant brokers will have to adapt and, if they do so, they will improve their chances of getting business across the line.

He thought the best plan for brokers was to expand their skillset to specialist lending areas, like self-build mortgages and recommended attending virtual events held by BuildStore, so brokers could expand their knowledge of niche lending.

Fyfe predicted custom-build homes would see substantial growth over the next five years. When looking at whether consumers were happy with a standard-build property, he said there was evidence to suggest they were not anymore.

He added, as a country, we have the opportunity to catch up with other nations which were more commonly building bespoke properties, due to the level of demand we have seen in the custom-build market.

Biggest opportunities for brokers

According to Paul Adams, sales director at Pepper Money, the specialist market was growing pre-Covid-19 and it would continue to grow.

He said there were many areas of this market which were currently underserved, such as shared ownership, Right to Buy and Help to Buy, and he expected specialist lenders to move aggressively into these areas.

Paul also discussed research undertaken before the pandemic, which revealed 15% of respondents had a credit blip in the last three years.

The majority of this 15% were intending to buy a house within the next 12 months, however 40% had no intention of visiting a broker. Instead they stated they would rely on their own methods of research in finding a suitable mortgage product.

Adams’s advice to brokers was for them to set their stall out for business by making sure websites and communications are up to date, which may encourage customers to seek advice when they are faced with specialist circumstances.

A significant number of people surveyed believed they couldn’t be helped because of their adverse credit, but if we could encourage a dialogue between customers and brokers then we could provide solutions for them, he said.

• Although Power of 8 has now wrapped up for 2020, it will be back next year with more events for brokers – keep an eye on LinkedIn for updates.

Emily Smith is national account manager at Hinckley and Rugby Building Society