How brokers are adapting in a year of change

Resilience and adaptability have helped brokers manage 2020’s challenges, but what should you look out for in the year ahead?

We know brokers faced enormous changes in 2020, from unexpectedly high buyer demand to shifting lender criteria and variable service levels.

Covid-19 has had a big impact on the mortgage market, so let’s take a look at the biggest concerns and predictions for 2021.

Impact on volumes

Despite national lockdowns, brokers have stayed overwhelmingly positive about business levels over the course of the pandemic, with many reporting stable or higher demand compared to 2019, helped of course by the Stamp Duty holiday.

But the last year has been full of challenges too, not least trying to support borrowers alongside the shift to remote working. However, brokers have adapted to new ways of advising and continued to service clients by phone or via video calls.

We’ve seen an increase in the number of changes to lender criteria across the market, which we know it’s been hard for brokers to keep up to date with. The restriction of higher LTV products in particular has made it more difficult to place first-time buyer clients, and brokers have told us they’d like to see more of these products in 2021.

Virgin Money already offers a wide range of mortgages, including 90% LTV deals for first-time buyers, and we’ll continue to support this sector, as well as communicate product and criteria changes to our broker partners.

We also recognise the additional pressures on lender service levels is making the broker’s job more challenging. To address this, we launched a new service commitment to help clients looking to take advantage of the tax-break on house purchases. You can find out more on our website.

Looking ahead

Brokers are understandably concerned about what the mortgage market will look like this year when Government support schemes such as furlough and the Self-Employment Income Support Scheme (SEISS) start to be withdrawn.

Many brokers have predicted extensive change in the market this year, and most highlight unemployment as a key driver of change, with uncertainty over house prices also being a key contributing factor.

Offsetting some of these threats to the market this year is the rollout of mass vaccination, as well as increased testing capacity.

How can lenders help?

Brokers have called for lenders to adopt a bespoke approach to underwriting and product innovation that supports the changing needs of borrowers – something we keep constantly under review.

Brokers also told us that better lender technology would improve their experience, particularly the removal of data entry duplication and creating better options to manage clients’ existing mortgages.

Virgin Money is committed to giving brokers the best technology and just recently we announced an API mortgage application integration with technology firm Twenty7tec, which will be rolled out to brokers early this year.

There’s no disputing that 2021 is likely to be tough. The economic fallout of both the pandemic and Brexit have the potential to impact borrowers, brokers and lenders.

As clients with more complex circumstances and finances look for support, one thing is certain – they need the knowledge and expertise of a professional mortgage broker now more than ever.