Special Features

Covid-19 is creating a two-tier housing market – but how can technology help brokers manage this?

Cloë Atkinson | Mortgage Engine
|
2nd December 2020
Cloe Atkinson Mortgage Engine
"The development of technology which can help mortgage brokers manage the current challenges is accelerating. "

Since the start of the Covid-19 pandemic, thousands of workers have been furloughed or made redundant, businesses across the UK have had to shut their doors, and several industries have been faced with huge financial losses.

The housing market has also been hit hard, having endured an unprecedented six-week closure soon after the pandemic hit, followed by a period of near-unmanageable activity, driven by policies such as the stamp duty holiday.

However, while a slow return to normal has rallied the market over the summer and coming into the autumn, another concerning trend is starting to emerge – the housing sector is being split into two camps. One half is made up of ‘secure’ borrowers who have been able to capitalise on favourable market conditions, such as the government’s stamp duty holiday. The other half, however, is made up of ‘insecure’ borrowers, whose finances have been impacted by the ongoing economic uncertainty and who are now in a more precarious position than they were pre-crisis. As a result, the time spent by brokers on client management has gone through the roof, as they juggle the competing demands of these two camps.

For advisers, managing a divided market alongside both new and existing cases presents several challenges. And if nothing is done to address this, then the current state of play could remain for some time yet, further exacerbating the problem for advisers, as well as end-customers, in the long-run.

Technology holds the potential to change this for the better, though, and it’s time that brokers get on board.

Brokers bearing the brunt

The stats tell us just how detrimental the coronavirus pandemic has been to consumers’ financial wellbeing. ONS figures show that there are approximately 782,000 fewer people in employment since March, with this number expected to rise further once the furlough scheme closes next March. Furthermore, research collected by Online Mortgage Advisor reports that a fifth of homeowners are worried about meeting mortgage repayments and 1.9m people were granted a mortgage payment holiday during the pandemic.

Brokers managing this uncertainty are facing an almost insurmountable challenge. Indeed, for advisers, the split in the housing market is applying pressure on one key resource: time. For example, mortgage approvals for house purchases hit a 13 year high in September. Add these new applications to the number of cases which were put on hold during the housing market’s hiatus, and brokers are faced with significantly more applications than in normal, pre-pandemic conditions.

On top of this, customers whose financial positions have been damaged by the crisis are increasingly looking for reassurance. And more often than not, this is where brokers come in, providing support to those who most need it. However, this is also demanding much more of advisers’ time.

Consequently, the balance between processing cases and maintaining customer service is becoming increasingly strained for many firms. So, what can be done to help this?

Getting technology on board

Fortunately, the development of technology which can help mortgage brokers manage the current challenges is accelerating. Ongoing developments in platforms such as two-way open application programming interfaces (APIs) are capable of streamlining the application process to make it significantly quicker for all parties involved. Such application connectivity enables the flow of information from brokers’ systems to that of lenders, or multiple lenders if the case is a multi decision-in-principle (DIP). As a result, brokers can receive DIPs in seconds, with the case automatically populating the full mortgage application if the response is positive. This confines laborious rekeying of data to the past and brokers are given back time to spend managing the evolving demands of clients. What’s more, rather than needing to call individual lenders or log onto their systems to see how cases are progressing, brokers can benefit from automated tracking that sends updates direct to their own platforms.

Getting technology like APIs on board is not only a way to future-proof a brokerage, but it will enable advisers to adapt to the most pressing challenges of the moment. Delivering a quick but tailored client service has never been more important in today’s increasingly divided and uncertain market – and it’s time to let the technology do the work.

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