"Homeowners and first-time buyers of all ages are far from immune to financial constraints placed on them in such a testing period for businesses and the UK economy."
We operate within an industry which is sometimes swamped with data and statistics, some highly relevant and some not so relevant. Focusing on the positive, these can often prove vital in outlining trends and gauging market performance to generate a better picture of how-to better service a variety of client needs moving forward. With that in mind, let’s focus on one piece of recent data and how intermediaries should be reacting to it.
Comparethemarket.com’s latest weekly Household Financial Confidence Tracker outlined that more than a third (35%) of young people (18-24-year-olds) expect to either be made redundant or take a pay cut due to the Covid-19 pandemic. A quarter say that they have already experienced a reduction in their take home pay since the pandemic began.
Across all age groups and demographics, 16% said they found managing household finances difficult over the last seven days, down from 18% a week before. Equally, 17% said they are worried about struggling to pay bills in the coming weeks, down from 20% a week prior. Families with children living at home demonstrated a higher level of financial anxiety, with 24% saying that they will struggle to meet financial obligations in the coming weeks – although this is a slight improvement from 26% the previous week. A concerning 12% of the general population expect to ultimately be made redundant as a result of Covid-19, with 14% anticipating a cut in their pay or hours.
None of these statistics are hugely surprising but they do help demonstrate the increased financial pressure being experienced by much of the UK workforce. Data from this ‘young people’ age bracket signifies the growing concerns of the next wave of potential homeowners. However, homeowners and first-time buyers of all ages are far from immune to financial constraints placed on them in such a testing period for businesses and the UK economy.
As we see activity levels rising across the mortgage market, this raises many questions around how circumstances may have changed for borrowers who were property hunting earlier in the year, at the initial application stage before the ‘closing’ of the housing market or have been prompted into property-related action due to lockdown. And if any changes around their employment status or income generating opportunities have been communicated to their adviser.
Of course, intermediaries are not expected to be notified of every incoming and outgoing, but with lenders naturally becoming a little more cautious in their attitudes to risk and affordability, every client’s financial history and credit rating will be put under closer scrutiny than ever.
Collating client’s up-to-date and relevant financial information has long been a difficult, time-consuming and thankless task for intermediaries. Fortunately, technology is generating a raft of solutions which work to offer clients easier access to, and better control over, their finances. Importantly, they can also work hand-in-hand with the all-important advice process.
Solutions such as Credit Access can help intermediaries and clients to bridge this financial information gap in a cost-effective and timely manner. And with more and more homebuyer enquires emerging over the summer months, intermediaries should be looking to maximise their time where possible to write more business and replace any lost income experienced over the past few months.
