Cloë Atkinson is managing director at Mortgage Engine
To say it’s been a strange year would be an understatement. Since March, thousands of workers have been furloughed or made redundant, many businesses have been forced to close – some for good – and the country faces additional uncertainty following the UK’s exit from the EU’s single market.
Looking at these factors alone, you would be forgiven for assuming the housing market would be in peril too. Not necessarily so.
Over the summer, house sales rocketed reaching record levels of activity and boosting prices. While it might seem unimaginable for the market to boom through a crisis, even after it endured a six-week closure at the start of the pandemic, government intervention such as the stamp duty holiday has been a key driver.
With an economic fallout and a housing boom running in parallel, a concerning trend is starting to emerge – the mortgage market is being split into two camps, between ‘secure’ and ‘insecure’ borrowers.
Secure borrowers are those who have been able to capitalise on the stamp duty holiday and can be seen as the primary drivers of the present activity rates; buy-to-let sales, for instance, have been pushed to a four year high as landlords have still been able to cash in on the tax break, despite continuing to pay a 3% surcharge on second homes.
However, the other camp is made up of ‘insecure’ borrowers, whose finances have borne the brunt of the pandemic’s economic impact and who might now need greater support from brokers.
The split has sent brokers’ client management time through the roof, as they seek to cope with the demands of both camps. While this may not be entirely beyond capabilities for all advisers, for many it’s a matter of treading water rather than smooth sailing. This is an issue that needs addressing quickly – and that’s why brokers must look to technology to help manage the tide.
Finding time in technology
If 2020 was the year the mortgage industry came to realise the benefits of technology, 2021 should be the year in which they fully embrace it. While existing technology such as video conference platforms have been crucial to keeping operations running, new technology can enable brokerages to build better ways of working.
Developments such as two-way open application programming interfaces (APIs) are enabling advice firms to speed up and simplify the mortgage application process, which is also promising great benefits for their clients.
One way APIs work is by enabling the seamless flow of information between the system of brokers’ and that of lenders, or multiple lenders, through a plug-like connection. This has the potential to make the application process significantly quicker for all parties involved. Why?
Because as a result, brokers can receive decision in principles (DIP) in seconds, with the case automatically populating the full mortgage application (FMA) if the response is positive. This makes rekeying data unnecessary and gives brokers back that essential time needed to manage client demands. APIs also enable automated tracking that sends updates direct to brokers own platforms, doing away with the need to spend timing checking individual cases.
Technology like this can put brokers in the driving seat. Today’s market is defined by uncertainty and with the furlough scheme and the stamp duty holiday set to end in March, demand for advice among consumers will only rise further. To get to grips with this, brokers must embrace technology – or risk sinking.