Craig Hall is head of broker relationships and propositions at Legal & General Mortgage Club
Few could have predicted how quickly the housing market would respond after reopening from lockdown earlier this year. Pent up demand was always an expectation, largely stemming from buyers and sellers who had seen their plans affected by the closure of the housing. Yet, that demand has been further incentivised and expanded by the Chancellor’s stamp duty holiday.
These record levels of activity are a positive sign for the housing sector, but in recent months we have all clearly seen the impact of this demand on lenders. Many have been forced to withdraw products and take new approaches to protect service levels. Now, as consumers behind these mortgage applications move towards exchange and completion, attention is likely to turn to conveyancers, who face an uphill struggle to manage a wave of activity – all while coping with the ongoing implications of COVID-19.
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For advisers, this means they’ll need to give even more consideration to the conveyancers they refer to, and whether these firms have embraced technology to adapt to the new normal.
Hard hit sector
The conveyancing sector has been hit particularly hard by the COVID-19 crisis. In part, this is because many firms had simply not embraced technology before the crisis.
Prior to the pandemic, conveyancing firms across the UK were relying on outdated processes, with some still using filing cabinets or requiring face-to-face document signing. This approach simply isn’t practical in our new normal of social distancing, and despite the impact of the virus on our working lives it still persists in some firms. The consequence is likely to be further delays for buyers who are now approaching exchange and completion.
At the same time, conveyancers have also been impacted by other external delays beyond their control. The effects of lockdown, as well as the surge in housing transactions, have caused a significant delay in turnaround times for searches through local authorities, for example. Other conveyancing businesses have only been able to partially operate due to social distancing restrictions.
These pressures are unlikely to be eased over the coming months either. Legal & General Mortgage Club recently reached out to the market to estimate the average homebuying timeline, and we found that it could take buyers as much as 17 weeks to complete on a purchase.
Current demand in the market could therefore peak for conveyancers in the early months of 2021, just as we all face a potential cliff-edge moment with a combined deadline for the current phase of Help to Buy and the end of the current stamp duty holiday. Demand is only expected to surge in the weeks before these changes take place on 31 March 2021.
Fortunately, there are conveyancers that have adapted and which have embraced technology to streamline their processes.
At Legal & General Mortgage Club, we have been working with several conveyancing providers through our SmartrRefer panel who have integrated technology to eliminate delays and ultimately speed up the homebuying process. From remote identity and verification to portals that can keep customers and advisers updated 24/7, these providers have helped homebuyers to save valuable time in today’s busy mortgage market. One provider, Digital Move, even claims that digital efficiencies lead to an eight-day reduction in the average time it takes on a completion.
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Eliminating delays to the conveyancing process is just one piece of the puzzle, though. Advisers also have a role to play in helping to bridge the gap between these technology-led providers and customers.
It starts by asking ourselves a question about who we refer to. Many of us will have a ‘go-to’ conveyancer that they refer clients to – the question we need to ask ourselves as an adviser is whether that firm has adapted to the new normal, or whether they still relying on filing cabinets and paper-led processes? If the latter, it might be worth considering whether there are better service partners on the market to help clients. For example, borrowers who need a quick answer or who want round the clock support form conveyancing firms might be better suited to conveyancers that have embraced technology and offer 24-hour support.
And, where delays are present, we need to set expectations with our clients. The homebuying journey is taking longer than ever and the timeframes our customers are used to no longer apply. Managing expected timelines and encouraging customers to remain patient will help to avoid unnecessary chasing and prevent disappointment.
These are unusually busy times in the mortgage market. This might be a positive sign of the sector’s resilience, but this demand has already produced its own challenges for lenders. Now, that backlog of unprecedented activity in the housing market is set to fall on the shoulders of conveyancers who face an uphill challenge moving hundreds of thousands of buyers to exchange and completion.
Technology is helping conveyancers manage this demand, but as advisers we must also identify the right businesses, those that have adapted to our new normal, to secure the best possible outcomes for our customers.