"The millions of people whose income and future job security has been affected by the pandemic will need all the financial advice they can get."
We’re all seeing examples of how some lending propositions are tightening their criteria across certain product types and struggling to cope with increased demand in other areas. Attitudes to risk, access to funding and logistical demands – both from an internal and external perspective – are continuing to impact lenders and their ability to meet the changing needs of a variety of borrowers. Although it’s fair to say that most lenders are doing a great job of overcoming these ongoing challenges.
One impending obstacle for the UK will be the fall-out as the furlough scheme comes to an end. According to the latest figures from the Office for National Statistics (ONS), around one in eight workers remains on furlough as the job retention scheme is wound down. The report also revealed that two-thirds of furloughed staff - 67% - were receiving top-up payments to their wages from their employers as well as the 80% contribution from the government.
The process of winding down the scheme is already under way with employers having to start paying National Insurance and pension contributions for their staff from 1 August. In September, the government will only contribute 70% of wages, with this reducing to 60% in October, before the furlough scheme ends at the end of that month. There are concerns the ending of furlough will lead to a sharp rise in unemployment with official figures revealing that 730,000 jobs had already been lost since the coronavirus lockdown began.
But how will this affect intermediaries?
The millions of people whose income and future job security has been affected by the pandemic will need all the financial advice they can get. Whilst the ending of the furlough period is obviously not good news for many individuals, the intermediary market does need to sit up, take note and step up to the advice plate. Although this does come with its own fair share of issues.
We’ve recently seen NatWest make changes to its income assessments for borrowers who are currently on furlough or have been furloughed during the coronavirus pandemic. And I imagine that other lenders are also approaching this issue on different ways. Changes in lending conditions, criteria and policy – not to mention backlogs when it comes to surveys and conveyancing - continue to add to intermediary workloads which have already become increasingly admin and compliance heavy in recent times. Then there is the potential impact on credit scores.
Given how quickly circumstances have changed in the current economic landscape, it’s more complex and time-consuming than ever for advisers to keep fully up to date regarding an individual client’s full financial picture. Thankfully, help is at hand. By utilising technology, there are now many ways to improve the intermediary and client journey.
A range of cost-effective online tools and services can add real value when it comes to streamlining/managing important links in the mortgage chain and delivering quicker, more accurate outcomes. Helping consumers and intermediaries to access the right financial information in a simple, transparent and timely manner is something we, here at Click2Check, are extremely passionate about. And with the mortgage market finally waking up to the true benefits that technology can offer, this will enable advisers to combat more admin and compliance burdens and allow them more time to do what they do best - offering advice and generating more business.
