Roll forward to 8 July 2020 and the current chancellor, Rishi Sunak, announced an SDLT incentive on all residential property until 31 March 2021.

Brokers and lenders involved in BTL may recall that it all worked out in 2016 and may be forgiven for thinking ‘Here we go again’, but some key differences are creating significant headwinds across the whole market.

First, BTL accounts for around 15 per cent of market activity but the new stamp duty incentive impacts the whole market, making the knock-on effect broadly seven times larger.

Second, no matter how much we congratulate ourselves for having worked efficiently in Lockdown 1, the reality check of trying to perform 100 per cent normally, while working from home, was apparent to all.

Third, the numbers suggest that applications are 20 per cent above peak industry levels due to borrowers trying to benefit from the incentive.

Conveyancing firms have record numbers of files on their desks, to the extent that some are turning away new clients or pricing up to control business volumes. They also report that searches are taking longer, meaning borrowers shouldn’t wait to get a mortgage offer before asking lawyers to order searches but get them under way at the same time as the application.

Some concerns are being expressed about delays from lenders on redemption statements — are ‘back end’ resources being switched to ‘front end’? If so, lenders should recognise the counter-intuitive outcome of such an approach and fix the problem shortly.

In the BTL sector there is a further challenge of letters of non-crystallisation, and the practice of some lenders in charging an upfront fee is unwelcome.

Sector heroes

The heroes in our sector are the valuers who, having ‘come off the road’ on 23 March, were back out there on 18 May while the rest of us were still at home. Despite the big backlog we need to remember that some valuers have to shield, and other firms have chosen not to return to mortgage valuation work.

Further challenges arise because valuers have to do visits in full PPE, and changing restrictions mean new rules are often quickly imposed. Short winter days also mean the number of visits a valuer can achieve is reduced. Thus valuation timelines are being extended by as much as eight days, further delaying offers.

Underwriting is also more complicated than it was a few months ago. Homeowners may have seen earnings fluctuate or needed to take a mortgage payment holiday. However, lenders trying to assist by using a more personal approach can create backlogs that frustrate borrowers who think they are being denied access to the SDLT incentive.

Some borrowers will fall out of the mainstream and be picked up by specialist lenders but the numbers arriving in their queues are swamping their service-level agreements. Business development managers have redefined their roles and are on the front line, shaping transactions and problem solving. At Keystone, we run a webchat from 8am to 7pm, which is popular with brokers as it offers extended hours, and I’ve seen other lenders active on social media outside business hours.

The update from Criteria Hub also indicates how each lender is progressing on service so, even if the numbers aren’t pretty, the important part is to know the timescales for applications.

Much has been said about how better-quality paperwork would speed up processes, but borrowers provide the paperwork as best they can and there is little that brokers or lenders can do with a deadline looming. Greater clarity from lenders on what they need for different applications will help guide brokers.

As I get up each morning and enter my study feeling like Bill Murray in Groundhog Day, I remind myself that there are no villains in our mortgage story; we all want the same outcome for our borrowers in these turbulent times. Logging on to the system, I see more cases have been fully keyed by hard-working brokers while the rest of us have been asleep. I wonder for a moment about texting my head of lending to ask if his hard-pressed underwriters would fancy some late-night shifts — then think better of it as I see he and two colleagues are already logged on and it’s only 6.57am.

David Whittaker is chief executive of Keystone Property Finance