Housing market re-opens as restrictions lifted
The housing market has effectively re-opened for business after the Government lifted lockdown restrictions which have been in place for the past eight weeks. Buyers can now view properties, surveyors can conduct valuations, and removals firms can operate, as long as social distancing rules are observed.
This is a real positive step towards a return to ‘normality’ within the market. Some valuers have already started visiting properties, enabling the log-jam of mortgage applications to get moving again. Desktop valuations can be a risky business; as a lender, it is vital that we cover ourselves adequately which means getting a valuer out to take a look at the property.
Unlike 2008, this is not a financial crisis. Banks are eager to lend, being highly liquid with solid foundations. The challenges lenders have had to address over the past few weeks are those presented by third parties, such as solicitor documentation and getting valuations done, not one of funding.
Since restrictions were lifted, the phones have been busy with a reasonably good level of enquiries. There is definitely a sense that people are fed up and ready to make that move.
Learning lessons from lockdown
While lockdown hit some lenders hard – perhaps those who weren’t as prepared as we were – it undoubtedly helped that our systems are cloud-based so it was relatively easy for staff to log-in from home. Subsequently, we are in no rush to put our staff under pressure by returning to the office immediately, earmarking a possible return in July. Much will depend on what the government comes out with before then. We have worked well working from home and have been able to comfortably do so.
Of course, working from home has its challenges and some tweaks have been necessary. Before lockdown, new enquiries would come to three of us on the team – this might work when you are in the same office but not when working from different locations. Three people emailing back and forth is a huge waste of time. Trying to streamline the touch-points within transactions so the right people are dealing with them at the right time has been a positive development.
Continuity in decision-making is also important. Early on during lockdown we found it highly beneficial for the management team to talk every evening, covering off the issues of the day, whether we had the capacity to deal with them, and where the market was at from a risk perspective – as a lender, you don’t want to put your head too far above the parapet. We don’t have to do that every evening now but it was necessary at the time.
As a smaller lender, we have been thankful that we can make quick changes. We have evaluated the risk profile of every product line. Flexible thinking is important and if Covid-19 has taught us anything it is that we need to move with the times.
Some of these developments will stick around in years to come, such as risk appetite around deals. Electronic ID verification, which was something we looked at in the past but was never urgent to introduce, will also become the new norm for ease of use.
Stamp duty holiday?
While it is hugely encouraging that valuers are going back to work and viewings will once more be allowed, we are still hopeful that the government will provide further stimulus with some kind of stamp duty relief or holiday. Stamp duty has probably been the most decisive factor in the slowdown of the housing market over the past few years, and with the current climate, a holiday would provide a real boost to the market.
How MT Finance could help
If you are a property investor and need to complete a transaction very quickly, a bridging loan from MT Finance could help.
A bridging loan is a short term loan that can be secured against a property and is designed to “bridge the gap” and access funds quickly, giving you the time and space needed until longer term finance can be arranged or the security is sold. If you would like to discuss your requirements, do get in touch by calling us on 0203 051 2331 or fill in our contact form and someone will call you shortly.