What a year eh! Another one!
Where do we even begin?
Covid and Mortgage Success
We had to start with this didnt we? Lets get the bad bit out of the way.
Any novelty of Covid and lockdowns well and truly wore off this year didnt it. It started to become a little mundane, although it was nice to get freedom day – even if it has not lasted indefinitely.
Like all businesses we have had to adapt and we have done that in a number of ways.
- Less face to face appointments – This is something we were working towards in 2019, we had developed a new online system which allowed us to get signatures electronically. Due to the lockdowns and the uncertainty we had to put a temporary hold on developing it further due to not knowing what the future held. We have started to progress it further however and we now have out customer portal online and working (although it is still a little on the basic side, this will improve in time).
- This also meant meeting up with our account managers less. That in turn means less free pens! We have had to buy pens for the first time in about a decade! As if covid had not done enough.
- A new office! After Covid hit, our landlords in our previous sold up and gave us notice so in December/January time we moved to our new office in Cheadle Hulme.
- Working from home periodically. This is something I think most people agree has its pros and cons. Pros – no rush hour traffic, probably spend less at lunch and when it is raining/snowing you can just look out the window rather than have a fight with a brolly in the wind, getting to see your child(ren) a little more. The downsides – getting to see your children more haha. Only joking, I love my little girl but having someone asking if she needs to be quiet whilst I am on the phone is something I will not miss.
2021 has been different but also the same…
Work wise we have had an interesting year.
Number of applications, there has been a drop in applications by around 5-10% on last year. That has been interesting as I had not even noticed. Which makes me think Mortgage applications are still more complex than pre-covid days. This is probably mostly down to self employed applicants. The 5-10% drop however puts us back in line with the number of applications we did in 2018 and 2019, so whilst there is a drop it is just back to a normal year.
Mortgage value is the biggest difference. Our average Mortgage application has been £91,000 higher this year than last. That is very easy to explain though, the stamp duty holiday. If you imagine on a £500,000 purchase for a home mover, stamp duty is £15,000. That is something that has to be found along side the deposit. It is quite appealing for someone to spend an extra £10-20k on a property but be able to pay it off over 20-30 years rather than as a lump sum.
Mortgage lenders are generally getting back to 2019. Employed applicants appear to be 100% back to normal, adverse appears to be maybe 95% back to normal. A few areas we are seeing differences is that high street lenders are not quite as relaxed as they were 24 months ago, but they are mostly there. Interest rates are also fluctuating a lot in the adverse world, sometimes for the better, other times for the worse.
The biggest difference for self employed applicants is for self employed. I would say there is still a lot to be done to get back to how we were in 2019, however we are in a lot better position than we were 12 months ago. We generally need more paperwork – bank statements and/or accounts – in addition, I think (although I have no evidence of this) self employed applicants are being credit scored more harshly than employed applicants.
Overview
The mortgage world is in a much better position for applicants than it was 12 months ago. We are probably 90-95% back to normal. There are still a few areas which could be improved however.
Mortgage levels took a big jump earlier in the year, there seems to have been a drop towards the back end of the year. However I think that is to be expected and we have put that down to the stamp duty holiday. In addition to that everyone has been busy for 2 years, that had to end at some point. When combined with the stamp duty holiday ending I think it was inevitable. I suspect this will probably carry through until March time.
Heres to 2022! Hopefully the worst is behind us and we can start to get back to normal rather than the “new normal”.