"Technology has not only become integral within the mortgage market but also across all sectors and in our personal lives."
Amid social distancing measures, Financial Reporter held a digital round table to discuss how Covid-19 had impacted the mortgage market, as well as what the 'new normal' might look like and what positives the industry can take forward from its response to the pandemic.
Participants included Jeremy Duncombe, director of intermediary distribution at Accord Mortgages; Peter Joseph, CEO of The Moving Hub; Mark Lusted, managing director of Dock9; Phil Rickards, head of BM Solutions; Neal Jannels, managing director of One Mortgage System (OMS); and Dale Jannels, managing director at Impact Specialist Finance.
FR: What has been the biggest impact of Covid-19 on your business?
Jeremy Duncombe, Accord Mortgages: "It feels obvious to say, but the biggest impact has been on our people and not having our team out and about. The majority of our sales team are field-based and they thrive on meeting with brokers, getting a sense of what the market is doing and how best we can provide the services they need. Although the number of ‘meetings’ has dropped, the number of interactions hasn’t. If anything, the support and guidance they can offer has meant they are even more busy than they were before!
"The other main impact has been on the type of business we’ve been able to do since lockdown. With the housing market effectively on hold, we’ve seen a lot less purchase business coming in and instead the majority of lending is remortgages and product transfers. The good news is that, with the return to physical valuations, we’ve moved back into many of the areas we had to pause - such as new build and 90% lending, so we’re looking forward to seeing the purchase market return."
Dale Jannels, Impact: "Firstly, let’s just say that I think the vast majority of firms in the mortgage market acted responsible and correctly to this threat, but there were understandable repercussions from these actions. The lack of lending was a clear result of this, largely driven by restrictions on valuations amongst other things. Changing client circumstances have also proved to be a major issue throughout this period and is something we constantly need to be aware of, and adapt accordingly, moving forward."
Mark Lusted, Dock9: "As a technology focussed business, we are lucky to be well set up for remote working. We’ve had a pretty busy time; our clients have made rapid changes to their websites and rolled out new digital journeys in reaction to the pandemic."
Neal Jannels, OMS: "The biggest thing we’ve seen as a business is a huge increase in demand for our CRM system. The past few months has really underlined the importance of intermediary firms being in full control of their business, their data and maximising the value of their client bank. And I expect this to continue in the foreseeable future."
Phil Rickards, BM Solutions: "It’s very difficult to narrow down the single biggest impact of Covid-19 especially as we are still living through this.
"The safety of our colleagues and customers is a top priority, so we’ve taken things like social distancing in call centres etc very seriously and made sure those who can work from home have been doing so."
FR: How well has the market adapted to the outbreak and what measures do you think have been the most successfully implemented?
Neal Jannels: "I’m sure I won’t be the only one to say this, but I believe the industry has coped pretty well on the whole. Working from home has become the new norm. Many firms, and employees within these firms, are realising that remote working is now a valid and workable option. Although having a suitable system in place to cope with all their business needs is crucial in making this work effectively and efficiently."
Phil Rickards: "In terms of the mortgage market, I think it has adapted incredibly well in an extremely challenging set of circumstances. A great example of this is in the widespread use of remote valuations and automated valuation models (AVMs). Although there has still been the need for some physical valuations, that had to be delayed, we’ve seen some excellent success rates using the other methods. With physical valuations now starting to take place again, we can look forward to at least some degree of normality once surveyors are able to work through the backlog."
Jeremy Duncombe: "We work in a very resilient market – we’ve been through tough times before and I’m confident we will come out again stronger the other side this time. Things have changed a lot in a very short space of time, but I’ve been impressed with the speed of response from the industry, whether that be brokers, networks, mortgage clubs, lenders or valuation companies. Everyone has been working together to find a solution to the problems faced. As a result, there’s been some great progress made in the way we do things and new processes which will still be in place once we’re over the worst of the pandemic. Take for example AVMs and desktop valuations – working closely with our valuation partners, we were able to ensure we could support as much lending as possible with physical valuations unable to take place."
Peter Joseph, The Moving Hub: "I sadly don't think that our industry has coped well at all with the outbreak which is understandable. Most of the property market is led by a perception that it needs to be face-to-face; viewings, floor plans, seeing your estate agent and sitting in front of a conveyancing solicitor to handle the legal side. I'm not saying all of this shouldn't be face-to-face, but so much can and now should be done online to save time, money and improve efficiency. Our conveyancing platform not only saves our clients money, but its fully transparent in showing our clients exactly what's happening on their instruction but also speeds up the process; which will mean in sme cases will hold a chain together that would otherwise fall apart."
Mark Lusted: "Those firms which embraced digital technology and adopted nimbler processes prior to Covid-19 have seen the benefits of that recently. There are some great examples of lenders rapidly rolling out self-service payment holiday request processes, using chatbots to manage massive peaks in customer enquiries and embracing AVMs to keep some areas of the market moving throughout. I think on the whole the industry has stepped up and adapted remarkably quickly."
FR: How has the pandemic highlighted the importance of technology in the mortgage market?
Peter Joseph: "I think I have highlighted this in the previous two questions. Basically in my view, it is vital. Lets not forget and rely on it solely, but like I have always said: online and on-hand."
Dale Jannels: "Technology has not only become integral within the mortgage market but also across all sectors and in our personal lives. Good systems and solutions have risen to the fore over this period and are being recognised throughout the industry to aid the seamless transition from the office environment to being able to successfully operate from home. A factor which has been crucial in keeping the industry and economy moving."
Mark Lusted: "It is well accepted that the mortgage industry is largely behind other financial services industries in its digital capabilities. While momentum for change has been steadily building over the last 18 months the pandemic has the potential to be the trigger for an inflection point. From the conversations that we’re having at Dock9, with our clients and prospects, we’re seeing the pandemic is accelerating decision making around the roll out of new technology."
Neal Jannels: "In a word – massively. The vast majority of consumers utilised tech in many forms even before this crisis, but some intermediary firms did not. This landscape has now changed forever, and it’s important to have access to the right systems, solutions and platforms to better engage with clients and run your business more effectively. Solid and robust lender integration, plus partnering other software providers, has ensured a smoother customer journey and these will continue to improve to make this process faster and even more efficient in the future."
Phil Rickards: "Technology has also been a huge help, and it’s safe to say that if the pandemic had hit us 20 years ago then the challenges would have been a very different to the ones we’re facing at the moment. Certain critical functions of the mortgage process have been able to continue, such as the use of electronic ID verification, video conferencing and 'virtual' meetings or conferences. Being able to work from home has also meant that most of the market has been able to carry on."
FR: The property market is likely to look quite different as things slowly return to normal, what changes do you think we can expect to see?
Jeremy Duncombe: "I think many of the things that have been made possible online will stay online, which can only help speed up processes and make us more efficient. Customers have shown that they’re happy to deal over the phone, online and via video calls. Social distancing measures will mean that face-to-face meetings will be less prevalent, so brokers need to set up their businesses to capitalise. Whilst none of us know how the next few months will play out, I think it’s key that brokers take a holistic view of their clients’ situation. Looking at how priorities may have changed as a result of this crisis will pay dividends for future relationships with them."
Mark Lusted: "From a lending perspective I think usage of AVMs will increase, and digitisation will continue at an increased pace."
Phil Rickards: "It’s no secret that the majority of economic forecasts point to a drop in house prices and slower demand than we would have otherwise expected to see and it may be some time before we return to what many would consider normal. That said, the fundamentals underpinning the market remain sound. We have to hope that some of the different ways in which we’ve been able to work, including the increased use of remote valuations and AVMs, will still be used in the future to make it as smooth as possible for people to buy and sell properties."
FR: What is the main thing you’ve learnt since the lockdown period was implemented?
Neal Jannels: "Be prepared. Lots of people have come to us since lockdown as they didn’t have an appropriate system in place, or their current system was not adaptable. This should be the number one priority moving forward for all intermediary firms, no matter how big or small."
Mark Lusted: "The quote “necessity is the mother of invention” has been proved a truism. Incredible things have been achieved very quickly when hands were forced, which begs the question, could some of the momentum continue apace to deliver longer-lasting change?"
Jeremy Duncombe: "Look after your people. Whilst this experience has demonstrated the value of contingency planning and having a robust business continuity plan, it’s also highlighted how people are fundamental to the success of your business. Whether you have a team of 500 or are operating on your own, the strength and character of us all really comes through most in difficult times."
Dale Jannels: "The main lesson has been how things can change so quickly and how better prepared we need to be for all eventualities. One thing intermediaries can certainly control, and implement now, is ensuring that they have a robust and stable CRM system in place. This can prove a real differentiator in times like these."
FR: What positives can the industry take forward from its response to Covid-19?
Dale Jannels: "I always like to look for the positives, and we can always learn from operating in even the most testing of times. The biggest thing I’ve taken from this is that change can be good. The use of platforms such as Zoom or Microsoft teams can save hundreds of miles in the car and hours of travel time. And from an advice perspective, clients need us more than ever."
Phil Rickards: "We’ve reacted swiftly in introducing support initiatives, providing payment holidays and supporting vulnerable customers whenever they have needed support. The industry as a whole can be hugely proud of just how resilient it has been during this period."
Mark Lusted: "It can take pride in the resilience and innovation shown in testing times and I think the true value and power of digital solutions in the sector has been proven beyond doubt."
Neal Jannels: "We need to realise that the only constant is change, and that change should not be a chore. The world is changing, the mortgage process Is changing. So, make sure you have the systems and processes in place that can change with it."
Peter Joseph: "Lockdown put the shutters up very quickly on the property market but transversely; and positively, it was also one of the first industries to be pushed to re-open by the government demonstrating the importance of our industry. We need to look after it and our clients who are buying and selling. For those of us who go that extra mile in their exciting journey, we will and are bouncing back quickly."
Jeremy Duncombe: "As we’ve discussed today, there are many positives that have come out of this crisis and so it’s important to be optimistic about the future. The speed at which we’ve adapted to the changes forced upon us has demonstrated the passion people in this industry have to make it successful. Within a week of physical valuations re-starting, Accord relaunched products at 90% LTV, new build and Help to Buy. Our enquiry levels went through the roof, showing that people want to buy homes and so we need to ensure that we all work together to facilitate that and help re-build confidence in the market.
"For brokers, the key to success over the next few months is to be more proactive than ever. Your clients need you and want help and reassurance. Work out how you can adapt your business if needed, and how the efficiencies these changes create can be used to allow an increased focus on your existing clients. And ask for help from your BDMs and lenders – there are so many resources available – make sure you get the support you need to do the best job you can for your clients."