What will the 'new normal' be after the Covid-19 pandemic?

Bob Young | Fleet Mortgages
17th April 2020
Bob Young Fleet
"Without too much crystal ball gazing, it’s likely there will be a significant amount of pent-up demand for mortgages particularly for professional buy-to-let borrowers"

To start, as this is my first article since the full impact of the Covid-19 pandemic and lockdown were realised, I hope that you are keeping well, that you and your families are safe and that you are working through this period as best you can.

I think we all understand the current difficulties, particularly in the sense that they impact all our businesses, but it is health and well-being that has to come first, and I think most people recognise what needs to be done, and that by doing it, we will hopefully get through to the other side as quickly as possible.

Clearly, it’s been a tumultuous time in the mortgage market. For Fleet as a non-bank lender, in common with similar lenders, we do not have the same lifeline from the Government available to us as deposit-taking specialist lenders. That, unfortunately, is a fact of life and it has necessarily informed our approach.

Fleet Mortgages is however still open for business at a 60% LTV level, with a slimmed-down product range. We have to apply the revised criteria to pre-offer cases we’ve received and are working through these cases with borrowers and intermediaries.

As you would imagine it is not where we want to be but until the RMBS markets come back to some sort of normality there isn’t a great deal of choice.

I’m very pleased that the vast majority of advisers and the distribution partners we’ve spoken to over the course of the past few weeks have been very understanding not just about the current situation but also what we’ve tried to do as a lender to keep cases moving where possible, and where not, to keep them fully informed of the situation and the rationale for the decisions we’ve had to make.

We are, of course, not alone in this; Fleet Mortgages‘ situation is far from unique. Recent statistics from Moneyfacts reflect this in terms of the number of buy-to-let mortgages which were removed from the marketplace during March – a drop of 1,304 products over the course of the month, which is not far off 50%.

The need for any business to act, and act quickly, is always critical in an emergency such as the one we all now face. For safety reasons it was understandable that valuers stopped all physical valuations, but these are an absolute requirement for specialist lenders. Like you we are waiting for the crisis to ease so that we can move forward with valuations.

In the meantime our focus has predominantly been on existing borrowers with their requests for mortgage payment holidays, working on post-offer cases, reviewing the pipeline to see how we can help cases progress, and ensuring we have open communication lines between intermediaries and where appropriate borrowers so everyone understands what’s happening.

It’s clearly been a tricky time for all, but it’s obvious that with every day we move closer to this current lockdown situation being over. When that might be is still unknown - we will have a changed environment and possibly a new normal to cope with.

However, I am perhaps more positive than others. Without too much crystal ball gazing, it’s likely there will be a significant amount of pent-up demand for mortgages particularly for professional buy-to-let borrowers who will see an opportunity to increase their portfolios.

To that end, we continue to be here for advisers and to provide the help and support they need. We appreciate your understanding and are working hard to deliver what we can, where we can for you.

It is another difficult period and there have been many in my forty-plus years in financial services; the market will return and if we make the right calls we’ll all be here next year.

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