Nearly two million people have been on mortgage payment holidays, over nine million have been furloughed, and 2.8 million were said to be unemployed as of May, rising from 1.2 million in March.

These are just some of the devastating effects of the coronavirus outbreak, which has left households up and down the country in a much more vulnerable situation than they were at the start of the year.

While some of these households may recover in the short-term, others may not – and the longer-term impact could be even more detrimental to their financial positions.

The mortgage market has been significantly impacted by the coronavirus pandemic, and specialist lenders have certainly not been an exception.

Many were forced to shut their doors to new business and shifted their focus to supporting their existing customers. However, these lenders have been working hard to reopen to new business as soon as possible.

Although some have been successful in this and we are starting to see the market return to normal operating models, it will be a while until we know how the specialist landscape is set to look following the crisis.

Credit scores

One fact that’s clear already, though, is that, post-crisis, the specialist lending market will be more important than ever.

Take payment holidays, for example. While the regulator has confirmed that payment holidays should not affect people’s credit scores, it is not yet clear how high-street lenders will take these into account when assessing a customer’s affordability for a mortgage in the future and could lock them out of mainstream lending.

The same could apply to borrowers who have experienced a change in income, perhaps as a result of redundancy or unemployment.

Specialist lenders, however, could provide individuals like these with the financial lifeline they need – and it’s vital that the market is equipped to serve these borrowers in the wake of the crisis.

After all, even households that recover from the impact of Covid-19 in the short-term may find that they need specialist help later on.

What can the specialist market do in the short-term?

For the lenders who have been able to reopen their doors, now is the time to start thinking about how to prepare for a post-coronavirus world.

It will be crucial that the growing pools of consumers who have taken a hit during Covid-19 can continue to access specialist support after the crisis – and broker engagement will be vital here.

Over the coming weeks and months, specialist lenders can be encouraging advisers to tap into this market and the various opportunities available.

This will ensure that brokers are geared up for a post-coronavirus future, in which there will be a greater number of customers looking for specialist lending.

Ongoing support for existing brokers will also be essential. With the market changing almost daily, regular updates on product changes will help advisers stay aware of the specialist solutions which are readily available at any given time.

Lenders who ensure this information is easy to access, clear, and updated regularly will remain in the good books of brokers.

Looking ahead to the longer term

Opportunities also exist for the specialist market in the longer term. First and foremost, there could be an opportunity for specialist lenders to work with technology providers and develop platforms that help improve customer outcomes.

Initiatives such as Open Banking could start to gain more traction in the specialist lending market.

It’s likely that demand for tailored financial solutions will increase post-pandemic, as we see more consumers fall into the “non-vanilla” bracket of customer.

With this technology promising faster and easier processes, lenders in the specialist market could have the perfect opportunity to capitalise on the opportunities.

The lockdown and introduction of remote working will have no doubt already prompted some lenders to think about how technology could improve their business over the longer term.

Investment in technology should continue where possible for lenders, to ensure that the momentum they had achieved in this area pre-crisis is not lost.

Referral from high street lenders

We could also start to see mainstream lenders doing more to direct borrowers to specialist solutions in the future.

Concerningly, being rejected for lending on the high street is likely to become a familiar scenario for more people once the pandemic subsides, which could have a hugely detrimental impact on customer confidence.

Last year, Bluestone’s Specialist Lending Tracker found that almost half (45%) of consumers who had their mortgage application declined by a high-street lender would be reluctant to apply for one again in the future.

This stresses the need for high-street lenders to be referring customers to intermediaries who can guide them to a specialist solution, in instances when they are unable to help.

While the market focuses on the short-term, however, keeping brokers engaged and active will be paramount to ensuring its future survival.

Although it is not clear what the new ‘normal’ will look like for the sector post-coronavirus, it’s advisable that lenders who are in a position to, use this time to prepare and gear up for the future.

This will ensure that the millions of customers who have been impacted financially by the pandemic are able to access the financing they need later down the line.

Steve Seal is managing director of Bluestone Mortgages