In this most unusual of years, the mortgage market has proven its ability to adapt once again.

Amidst the pandemic, the sector has made positive strides in integrating technology as part of its response to the new normal.

With a vaccine being rolled out, next year will be a decisive moment for the sector – will we continue to press these advancements we’ve made or will we, as an industry, resort to old, inefficient ways?

Technology is key

The mortgage market has come a long way in its use of technology since the first lockdown and as the industry continues to see high levels of demand, we expect technology to play a growing role.

Announcements this week perhaps provide a glimpse of the future, from price comparison sites making moves in our market to another large lender indicating a desire to increase pricing sophistication for mortgages, albeit at the moment only in product transfers.

Our focus will be to ensure that whilst necessary improvements to the use of technology within our sector are encouraged, advice and advisers remain fundamentally at the core of this. L&G’s launch of SmartrFit couldn’t have come at a more appropriate time. With the multitude of updates to mortgage lending criteria this past year, tools such as this one are successfully helping advisers find the right products quickly and accurately in a market where criteria are changing all the time.

The demand continues

As we look to the first quarter of 2021, technology will continue to help us all cope with buyer demand too; but it won’t be the be-all-and-end-all. Collaboration across the entire mortgage journey will be vital to managing demand and delivering service our sector can be proud of.

Despite our recent research showing the average homebuying timeline is taking up to 17 weeks from start to completion, there will still be buyers eager to see if they can take advantage of the stamp duty holiday before the end of the first quarter.

All of us in the market will need to work together to manage the expectations of these borrowers so that they aren’t left disappointed when they don’t complete by the end of March, or worse, decide to pull their purchase at the last minute.

The Help to Buy deadline of 15 December will ease some of the pressure, but concerns remain that the market could experience a cliff-edge moment. With the tax incentive having supercharged demand in the market, we have been active in lobbying government to consider either continuing or tapering the deadline to avoid a potential collapse in property chains across the country.

The year of remortgaging

Next year will present significant opportunities for advisers in the remortgage market. In 2021, there will be a total of 707,270 residential maturities, while in the buy-to-let market, 1 April will mark the five-year anniversary of the 3 per cent additional stamp duty levy on second properties.

The sector saw a wave of landlords buying properties before the measure came into effect on 1 April 2016 and the result will be a spike in five-year fixed rate product maturities between now and the end of March 2021.

All this means that whatever happens to purchase business, there will still be plenty of remortgage business for advisers. Their share of the market is also likely to remain strong next year, particularly as direct traffic into lenders’ branches is set to stay muted and they continue to manage payment holidays and other issues across their broader portfolios.

Covid-19 into 2021

Even though the market was closed for two months in 2020, we saw a strong rebound in the summer that has yet to abate. And a consensus appears to be emerging from the larger lenders that next year we might expect modest growth in gross lending. They are predicting around 4 per cent growth from a consensus of £240bn in lending in 2020 to £250bn at the end of 2021.

The value of advice

The value of advice and the adviser will continue to be crucial as we navigate these highly unusual times. From the impact of furlough to the economic implications of the virus, we could see the rise of a new generation of borrowers who face more complex financial positions.

Coupled with the wave of borrowers who will need the support of advisers when government’s support measures eventually come to an end, having a trusted adviser will be more important to buyers than ever before.

May I take this opportunity to wish all of my friends, colleagues and contacts in the market a very happy Christmas and New Year, with hopes for a healthy, peaceful and prosperous 2021.

Kevin Roberts, director, Legal & General Mortgage Club