We need to talk about property

We need to talk about property

The financial uncertainty caused by COVID-19 doesn’t sit well with the growing reliance on ‘tick-box’ mortgage applications. Matthew Dobson explores a rising demand among clients for personal, ongoing conversations with their bankers, mortgage brokers and other intermediaries.

Matthew Dobson, Banking Director
Professional Partners

Like many people, I’m currently working remotely, spending far more time at home than I ever have before. I live in a village near Colchester which, with its ancient Celtic and Roman origins, is said to be the oldest town in Britain. This area has lived through invasions, plagues and natural disasters – and some of them were relatively recent. On 22 April 1884, Colchester and the surrounding villages suffered Britain’s worst ever earthquake, with enormous structural damage and some loss of life.

Spring 2020 will loom even larger in the history books of tomorrow. And as I sit at my desk, making sense of the current tremors in the property market, the timelessness of the surrounding landscape provides a little context. COVID-19 has brought awful suffering to so many people, plus worrying financial and mental health consequences. And for those involved in the property market, it has been a very difficult time. But just like the River Colne flowing quietly through our village, markets have a way of moving on, even if it takes a little time.

Conversations with brokers

An unexpected plus from the crisis for me has been spending more time with my family, but we haven’t taken our foot off the pedal at Hampden & Co – far from it. The transition to homeworking has been smooth and we’ve been incredibly busy.

As well as ongoing business, our mortgage work has been relatively buoyant. Indeed, the crisis has prompted many approaches from mortgage brokers and other professional intermediaries we haven’t spoken to before. As mainstream lenders struggle to adapt to the current circumstances, some intermediaries are looking further afield to help their clients. Many now realise that we can help in situations where complex financial backgrounds fail to satisfy the tick-box processes of high street lenders. For instance, many of our clients own businesses where revenue is strong over the long term but sporadic and unpredictable in the short term. Other clients have wealth and assets, but no consistent source of revenue, so again fall foul of the algorithms.

It’s only possible to see if we can help clients such as these by having proper conversations to get a full picture of their financial wellbeing. Mainstream banks don’t have the time to do that anymore but we do, and it explains why our incoming queries continue to rise, even during this crisis. At a time when even some private banks are moving away from true personal banking, our ability to help clients navigate life’s challenges on an ongoing basis will remain very much at the heart of what we do.

Looking for the bounce back

So where is the property market heading? There has been some movement in the new homes market, with technology being used to enable remote viewings (something we will see more of) but, clearly, COVID-19 has had a huge impact, particularly on the mass market. Potential buyers haven’t been able to view properties and surveyors haven’t been able to gain access. And this has all happened at what is usually the peak season for property transactions.

The mortgage brokers that I’m speaking to see a lot of pent-up demand in the market and expect to be exceedingly busy in the second half of the year. There could well be a decent bounce back but it remains to be seen how much the shrinkage of the economy will dampen down demand over the next year or two.

For those working in property and banking – and just about everyone – it’s a time for reflection and adaptability. And the COVID-19 crisis is only part of the picture. As well as slowly feeling their way back from the global banking crisis, mainstream banks have been having to adapt to the potential implications of the environmental crisis and the rise of successful challenger banks (of which we are one).

A very different crisis

When the global banking crisis created its own seismic tremors in 2007/08, I was working at the Royal Bank of Scotland. Whatever level you worked at then, and however insignificant your ability to have influenced anything that happened, all bankers were tarred with the same brush. This is a very different crisis. A lot of banks and lenders have been helping their clients through this extraordinarily challenging situation (with mortgage holidays etc.) and in the uncertain years ahead, clients are likely to value more of that flexibility and support.

In our sector, a move towards more personal conversations with bankers, mortgage brokers and other intermediaries may well be one of the positive outcomes to emerge from this strangest of springs.

Matt Dobson
Matthew Dobson, Banking Director