As I was beavering away the other day, a song came on my playlist that was apt for brokers at the moment. When Grandmaster Flash & The Furious Five said “Don’t push me ’cos I’m close to the edge”, I doubt they had mortgage brokers in mind, but the market certainly feels like a jungle sometimes.
It is hard enough at the best of times but at present there is a feeling of being overwhelmed, if not actually ‘going under’. None of us know what is around the corner but, with lenders still fighting their own battles with capacity, and risk departments seemingly ruling the roost while valuers make some overcautious decisions, it feels tough.
However, newly inspired by my daughter’s bedtime-reading book, Be a Unicorn, I think we all need to look on the positive side, and sparkle. Seriously, it’s a brilliant book on keeping positive! With that in mind, it really is fabulous that the market is open once more, that enquiries are coming in thick and fast. We should all be trying to make hay while the sun is shining.
People need brokers more than ever, and it is important that we value ourselves properly and show how professional and essential we are in getting mortgages through in these times. As such, we should all make sure that we are charging an appropriate fee.
Please be proud of what you do. You are excellent brokers and it is important we get paid for the additional hours we are all putting in. Please, please, do not forget to discuss protection at this time either – it protects not only the clients but you and your businesses as well.
Dip in service
Given the pent-up demand that has been unleashed on us all, fuelled by the powder keg that is the stamp duty holiday, some of the service levels now being exhibited by lenders are getting concerning.
For mortgage lenders, life is still problematic due to their dual worries of struggling with too many applications and not enough staff back in the office, and the economic consequences of the end of government support for those on furlough. As such, we are still seeing rates change quickly as lenders dip in and out of the market, raising rates suddenly once they have too many applications. Processing times still vary dramatically.
We understand the issues but, with many not having plans in place to bring staff back to the office, it is hard to see when this will start to improve.
It is extraordinary to think we are in September already, with many people having not been to their office for six months. Hopefully the return to school will bring back familiar routines, but for many the world seems to have changed forever, especially with working patterns. A study by Intelliflo found more than half of mortgage advisers looked likely to stay at home for good, with two-thirds not back in their office yet.
As we enter the traditional time in the housing market where we start to hear the phrase ‘I’d like to be in by Christmas’, this high-demand period is joined by a host of prospective buyers looking for a second property or holiday home. Enquiries for the latter have reached extraordinary levels as many seek their next ‘lockdown’ pad while taking advantage of the stamp duty holiday.
Meanwhile, first-time buyers who thought this was a good time for them with the stamp duty holiday are finding the lack of high-LTV mortgages and the additional hoops they must go through frustrating.
It was interesting to see reports from Zoopla that, despite all this, properties are selling 31 per cent faster than a year ago, with the time to sell a property reduced by two weeks. This is a testament to hard-working estate agents, lenders and brokers – and of course valuers and solicitors – and shows that buyers are serious about transacting.
Clearly the next four to six weeks will prove the most crucial part of the year, not just for the housing market. There will be a lot of changes, but let’s not forget that, although sadly many people will be affected and lose their job, there is also a greater number still in work, who will not be affected as much and will still want to move, remortgage or, hopefully, employ people. We can only hope that Boris continues his disappearing act and doesn’t get too involved in anything else.
It will be interesting to see how chancellor Rishi Sunak deals with the unenviable task of making us all pay for the assistance the country has had, as he surely will need to. A rise in capital gains tax to 45 per cent on additional properties isjust one idea being considered. The chancellor gives, and the chancellor takes away.
Meanwhile, although lenders have increased rates to dampen demand – though why they have also done this on product transfers is an interesting debate – the money markets still expect low rates. Negative ones are still a real possibility.
Three-month Libor has fallen to 0.06 per cent, while swap rates have continued to plummet to extraordinary levels. Since the last column therefore:
2-year money is down 0.17% at 0.12%
3-year money is down 0.14% at 0.15%
5-year money is down 0.07% at 0.25%
10-year money is up 0.06% at 0.48%
Mortgage-wise it has been a mishmash of good news, bad news, rate pulls with little notice, new lenders coming back, and so on. It is hard to keep up with all the changes, so much so that some lenders cannot keep their own websites and systems updated in time. In fact, according to Moneyfacts, lenders have withdrawn almost 2,700 mortgage deals since the start of March.
High-LTV lending continues to be a big issue, but it was good to see Virgin Money tentatively return to the 90 per cent LTV market, albeit with only seven- or 10-year fixes, which is a canny move. NatWest also returned to 85 per cent LTV lending, while Tipton launched a 99 per cent LTV Family Assist Mortgage. There are rumours of more good news from lenders in the next few weeks.
It’s great to see Digital Mortgages by Atom Bank back in the fray and releasing new products once more up to 80 per cent LTV, while Dudley Building Society is also returning to 75 per cent LTV – the more the merrier and it will all help to relieve pressure on others.
It was also fabulous to see the return of lovely Vida Homeloans with a host of rates on residential, buy-to-let and Help to Buy. This is a really important step and shows that specialist lenders are still here, fighting for their business and dedicated to helping those that the mainstream are struggling with. We need more support and protection for these lenders.
Speaking of new lenders, hats off to Live More, a new arrival in the retirement interest-only space. Launching a new lender is never easy but to do so at this time is particularly challenging and it’s good to have more competition in this space. A cursory glance at the brand and offering shows a well-thought-out and innovative lender – we wish it well.
And I wish all of you well. Stay loud, stay proud of what you do and, in the words of the police captain from Hill Street Blues, “Hey, let’s be careful out there.”
Hero to Zero
What Really Grinds My Gears?
I interview a lot of people and have been accused of being, let’s say, somewhat choosy. Which I don’t mind. We have a particular ethos, as most firms do; not better or worse, just different. For everyone who does not join us I am sure there is a place for them at a company better suited to their needs or personality.
One thing that struck me the other day was the question of experience, as I re-interviewed someone who had been previously turned down for lacking it. He gave a fabulous, nay inspiring, account of why he should have a chance and why experience sometimes is not everything it is cracked up to be. He had a point.
We are about to go through a tough period where many people, more likely the inexperienced ones, may not keep their job. It is important that they are not forgotten, that we all do what we can within our limits to help at least one person looking for that chance. Some of our best brokers are ones we took a chance on.
