The second national lockdown in England is now underway and there does seem to be a feeling that this current imposition is very different from what we lived through back in March to May.
There are many obvious reasons for this: more shops and services are allowed to stay open, not least in our sector where housing construction can continue, and crucially, so can the suppliers to those builders and developers. An important aspect for maintaining the performance of the new-build market.
Some have suggested this period of lockdown may be something of a blessing in disguise for the mortgage market, allowing stakeholders – especially lenders and conveyancers who are facing huge caseloads – to get on top of current backlogs.
This may well allow lenders, for instance, to recover their position and to move to a point where they can return to their optimum service levels and generate mortgage offers much more quickly.
This assumes that mortgage market activity slows down, which is something I remain dubious about. Our own trading figures continue to show extremely strong activity levels, particularly mortgages, which tells me consumer demand remains extremely strong. This looks to be the case across the entire market – according to the Bank of England, UK mortgage approvals for purchase increased to 91,500 in September, from 85,500 in August, the highest since September 2007.
Throughout the rest of November at least, the expectation is this will continue, especially as the stamp duty holiday deadline looms and consumers might well feel these next few weeks are their best chance of getting to a purchase completion by the end of March. Add in the fact that December tends to have a seasonal dip and we could see November mark the high water-point for 2020 mortgage activity.
Another point to make which feeds into the narrative that ‘Lockdown 2’ is very different to ‘Lockdown 1’, is the work that has been carried out by mortgage market professionals to adapt to the changed environment, not just during March through May in order to hit the ground running when the market was reopened, but since.
Like many sectors, I think we have all learnt greatly from that initial lockdown, and this is helping consumer confidence right now.
Our industry has quickly developed new solutions, with great swathes of people operating seamlessly from home/remotely, with systems and processes to ensure we deal effectively with clients, providers, or lenders via technology, with an even better understanding of video conferencing such as Zoom or Teams. We have also continuously educated consumers about how we operate to best serve them.
This year, the importance of quality technology has come to the fore, given mortgage brokers’ increased reliance on it to provide an excellent service to consumers, while speeding up some of the key elements of the mortgage process. I’m thinking of our own RevolutionID which, in partnership with Experian, delivers instant ID and address-verification for our advisers. It’s also great to see the increased use of Open Banking which cuts down significantly on old-fashioned documentary evidence.
In essence, we are all so much better equipped than we were just a year ago and with the housing and mortgage markets fully open throughout this period, there will be significant opportunities to grasp, not just in mortgage lending but also in protection and GI applications, and many other products and services the intermediary market delivers.
Lockdown 2 presents no new or immediate threats to our sector. As I write this, the world has just heard about the new Pfizer coronavirus vaccine: a stunning milestone, in this dreadful saga, and one that hopefully signals the beginning of the end in terms of what we’ve all had to put up with in 2020.
While we await its roll-out, and while we move through Lockdown 2 and beyond, I have no doubt that the mortgage advisory community will continue to deliver great customer outcomes – that is one constant we can be certain of.
Rob Clifford is chief executive of Stonebridge