During the past few weeks we have seen significant efforts being made by lenders to support borrowers impacted by the coronavirus pandemic. In particular banks and building societies have responded by providing mortgage payment holidays to more than 1.2 million borrowers according to UK Finance. Exceptional times require decisive action.
But it’s not only borrowers who need lender support at this time of significant uncertainty. Brokers also face real challenges as the housing market suffers from the effect of the coronavirus lockdown.
The government has clamped down on people moving home. The number of new mortgage purchases has reduced dramatically, so brokers will clearly be worried about the decline in income from a lack of new business and the impact this will have on the future of their business.
In these unprecedented times, smaller lenders in particular have an important role to play in supporting brokers during this period of lockdown.
Despite the decline in new mortgage purchases, several smaller lenders are still active in many niche areas where there remains a demand. Smaller lenders have a great reputation for providing niche products, which rely more heavily on sound advice from brokers.
At the Tipton we are still lending on our range of buy-to-let products (including ex-pat) for customers who want to purchase or remortgage properties. These buy-to-let products remain a useful source of new business opportunity for brokers as they continue to meet the needs of both first-time and experienced landlords.
Relationships play a major role in any business transaction. They are especially important now when it comes to how lenders interact with brokers. Regular communication is critical at this time between brokers, BDMs and underwriters in order to find the right solution for the customer.
It must be a real challenge for brokers and their customers to navigate the current purchase market. A market which has almost ground to a halt as many lenders make significant criteria changes and withdraw products completely. However it is pleasing to see that many smaller lenders are still offering mortgage products of between 80% and 90% LTV.
Staying in touch
At this time of uncertainty it’s never more important to ensure BDMs stay close to their broker contacts. Brokers still need to remain up to date with a lender’s mortgage offering, to ensure the sourcing is made based on reliable information.
BDMs therefore play a key role in this process by ensuring they remain accessible to their broker contacts and provide them with product and criteria information. For example, like other lenders, the Tipton is now offering desktop valuations on all house purchases, remortgages and buy to let mortgages up to 70% LTV.
It’s also important for brokers to be able to access lenders BDM’s who can in turn access experienced underwriters during this time to help find a solution, particularly for specialist and niche cases. This open and proactive channel of communication between brokers, BDMs and underwriters will be crucial to providing brokers solutions for the specific needs of individual clients throughout the lockdown period.
There is no doubt that some brokers will be under pressure and many will be concerned about the future of the mortgage market. However the mortgage market will recover and brokers will look back favourably to those lenders who provided proactive support in their time of need.
By Cammy Amaira
Source: Mortgage Introducer