The new normal, a much coined phase, what does it mean for us at McLean Financial Services?
When lockdown happened Lenders reduced loan to values immediately, in some cases to 60%. We couldn’t predict how business would go as we came out the other side. In fact, we were pleasantly surprised that as soon as property viewings were allowed again business rocketed.
The pent up frustrations of home owners and first time buyers post lockdown had driven interest in moving or buying a first home. Whether that be due to lack of space or the need to finally flee the nest, enquiries soared and still do on a daily basis.
Is it a bubble? Who knows but for now we’ll continue doing what we do; giving our clients the best service. Our clients can depend upon us through their journey and beyond.
So what has changed for us?
We already worked flexibly and in some cases remotely. The COVID/Lockdown restrictions on office work have posed no implications for day to day business at McLean Financial Services. Our team keep in regular contact due to Microsoft Teams and Zoom. We feel we were a step ahead due to our flexible contracts and adaptable staff.
Face to face meetings still happen with clients who prefer this manner of communication (all compliant with current Scottish Government guidelines). We do however generally conduct business by telephone, email and zoom in the first instance. We can quickly and accurately establish clients affordability and options.
What’s changed for the Lenders?
Loan to value is still a maximum of 85% with most lenders, we do have two lenders still hanging in offering 90% loan to value for First Time Buyers. There are many caveats and not on new build properties at this time. Given the wealth of business we have written since July it’s not deterring people enquiring and proceeding to full application.
For First Time Buyers we have the First Home Fund that we can use, they need to have moved into the property by 31st March 2021 to qualify. Then we have Help to Buy (this scheme is not just for First Time Buyers) available on purchase prices up to £200,000. The funding for this has been extended to March 2022 which will help some of our clients with smaller deposits or where the First Home Fund can’t. As always we will look at all options for clients including any incentives involved in buying a new build property.
Thanks to the media clients have heard that they will need larger deposits to buy. Most clients now come to us with this expectation. Of course, we still have a list of clients who require the higher loan to values. As soon as we have access to this we’ll be the first on the phone shouting from the rooftops.
The question on that is how long will it be…The truthful answer is who knows? Lender capacity is struggling at 85% loan to value. We need more confidence in the market coming out of COVID-19. We are given indications it may be the end of the year but even then it’s an estimate.
This leads me on to my next point; lender capacity. It’s slower than we’d like, many lenders have up to a 20 working day turnaround on new business at the moment. Some are still working well within their usual 3-5 working day timescale. It’s frustrating for us as a company who put our service and our time to mortgage offer at the forefront of what we do.
We are using all avenues to push applications through. When we make the application for clients we are upfront about service levels and what to expect. At no point in the journey do we want clients to be left wondering, worrying or getting restless not knowing what is going on. Communication, even if it’s just an update to say that the lender is still to review, keeps our clients informed.
What are we doing?
We have also welcomed a new addition to our admin team, Zara Coner. We have dedicated case administrators pushing cases through, chasing lenders, ensuring all cases are on track. This has been invaluable at times when advisers are busy giving advice to clients to get deals done.
Our daily team meetings allow us to keep abreast of the latest changes from lenders. Our advisors are informed about product changes and more so their knowledge is always up to date.
In the lead up to Christmas we hope to see the usual Autumn burst of enthusiasm for moving home pre-Christmas. Speaking to local surveyors and solicitors it seems that there is still plenty of interest in the market, lots of properties going up for sale and values holding.
Life as we ease out of the lockdown frustrations is certainly different. We remain positive, optimistic and hopeful that we will ride out the storm that is 2020.