Is there time to complete a property purchase before the stamp duty holiday finishes?
From a mortgage point of view, this is easily achievable. Even with the lenders being slower than usual most will produce a mortgage offer soon enough to complete before the end of March.
The issue that will dictate whether people can complete or not will be the legal process, particularly the searches' availability. Many solicitors are saying it is too late now to complete before the end of March.
I hope that the Government will extend the stamp duty holiday for another six months.
Are you managing to help your self-employed clients to get mortgages?
At present some lenders are treating self-employed clients much more harshly than an employed client. This seems unfair, but I think this is largely due to the time it takes to underwrite someone who is self-employed compared to an employed applicant.
There are still many lenders who are helping the self-employed, it is a case of matching the requirements and circumstances of the client to the lender’s criteria to get the right outcome.
How are you finding the lenders to deal with at the moment?
Some lenders have coped admirably with the challenges over the last nine months, and others have had complete service meltdowns. Some of the issues have been short term, while some lenders don’t really seem to have managed to get back on track.
The key part of the broking process is knowing which lender can provide an offer within the required timeframe. This means some lenders will not fit the bill especially if we need a faster offer for a motivated client.
Do you think fixed rates will get more expensive?
I do not think rates will change significantly for the most part, and if anything I think they may decrease when lenders are more able to cope with the volumes of business they are receiving.
Hopefully the higher loan-to-value products will become more competitive as the 85% and 90% deals seem expensive now compared with a year ago.
Are you positive about the year ahead?
Always. This year will not be without its challenges, but ultimately I feel optimistic about the mortgage market, and it feels like there is a pent up demand from first-time buyers with small deposits.
Once there is a wider range of cheaper 90% ltv products and perhaps a return of the 95% ltv mortgages, I think this will open up the purchase market to many people who have been frozen out since the first lockdown.
What advice would you give to younger brokers to manage during this pandemic?
My advice to our younger brokers is always to pick up the phone and speak to clients. The overreliance on email and text communication means that customer service experience is diminished and clients are not always as informed as they could be during the process.
A brokers role is to guide their clients and make sure that they fully understand the process. I think this is best done verbally. Use of video call or Zoom is even better for interacting with the client, so I encourage brokers to utilise these tools.
What would you like to see the lenders do over the coming months?
I hope that lenders can continue to improve their product offerings, criteria and their service standards over the coming months. It felt like the market was contracting for most of last year, and it is positive to see this reversing and lenders improving their products and criteria.
The support we have received from most lenders during the last nine months has been fantastic. They have dealt with challenges that they would never have thought they would have to, and we are very grateful to them for continuing to offer mortgages to our clients.
Jed Newton is a director at Trinity Financial and here is a link to his profile.