- Brokers continue to adapt to the ever changing Covid landscape
- Over half (60%) of brokers predict lockdown three will have negative impact on house sales in 2021
- This is largely driven by concern over finances (79%), nervousness about the housing market (61%) and worry about house prices (50%)
- Brokers call for access to BDM teams and underwriters when working with lenders
Research carried out by Virgin Money has found that despite the nation being in the grip of a third Covid-19 lockdown, mortgage brokers are adapting to the rule changes and proving more resilient than at any time during the past 12 months. The survey explores the changing role of brokers due to the pandemic and reveals that they are adapting well to the ever-changing environment, with a smaller proportion reporting the pandemic is having a significant impact on their business now compared to October 2020 (44% vs 54%). In fact, nearly a fifth (19%) don’t expect the pandemic to make any difference, likely based on them learning from experience during the 2020 lockdowns.
Although they have adapted well, brokers are still experiencing challenges in the current property market due to changing lending criteria (50%), lenders unable to maintain expected service levels (40%) and a tightening of policy (39%). Interestingly, just 3% of brokers believe Brexit will be a concern or challenge for them in 2021. Over a quarter (26%) cite the availability of higher LTV products as a key challenge so are likely to welcome the recently announced Mortgage Guarantee Scheme, which Virgin Money will actively participate in.
The research also suggests brokers will be relieved to see the stamp duty holiday extension until June announced by the Chancellor, and a higher nil rate band in place until October. Nearly three quarters (71%) had called for this due to concerns about chains breaking down (55%) and house prices being reduced (55%).
Understandably, given the challenges faced by the industry, the priorities for brokers when working with lenders are speed of service (68%) and efficient application systems (58%). Brokers also highly value direct access to a business development manager (BDM) (52%) and underwriter (37%).
In response to this, Virgin Money has recently launched a new dual branded business development team dedicated to providing brokers with a single point of contact for both Virgin Money and Clydesdale Bank. The team will offer support and advice to brokers across the full range of products and services on offer and help with all product and lending policy queries, as well as advice on making an application.
Despite their own resilience mortgage brokers believe consumer confidence has been knocked by the latest lockdown with over half (60%) predicting this knock will translate to a negative impact on house sales throughout 2021.
Brokers believe the top driver of a negative impact on house sales to be buyers or sellers concern over their finances (79%) as the pandemic continues to hit jobs and cause economic uncertainty. This is also leading to nervousness about the housing market (61%) and concerns over house prices (50%), which brokers predict could cause property sales to fall.
Sarah Green, Head of Mortgage Distribution and General Insurance at Virgin Money, said: “Our research shows that brokers think consumer confidence has been knocked because of multiple lockdowns and, while it is positive that we now have a roadmap out of lockdown, there is much economic uncertainty ahead which is likely to make buyers and sellers nervous. The challenges faced by brokers as they navigate these unprecedented times are consistent with those reported in our survey from October and emphasise how essential it is we deliver on the needs of intermediaries.
“This is a key reason for us recently launching a dual branded BDM team, so brokers can have direct access to a team when working on a transaction. We’re also excited to be part of the Mortgage Guarantee Scheme for first time buyers as we recognise how essential it is for them to get on the ladder and hope this will also help brokers working with that segment of the mortgage market. Our aim is to provide as much support as possible for brokers, buyers and sellers alike as the industry navigates through the challenging times ahead.”
Looking forward, over half (55%) of intermediaries surveyed expect mortgage rates will remain largely the same this year as interest rates are unlikely to change. Re-mortgages are expected to make up the majority of business for brokers in 2021 (60%), as they expect demand for new house purchases to be dampened.
More information about the newly launched BDM team can be found at: https://intermediaries.virginmoney.com/find-your-bdm/
 Survey of 183 brokers conducted by Virgin Money in January 2021
 Survey of 200 brokers conducted by Virgin Money in October 2020