The value of personal banking

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The value of personal banking

The financial uncertainty caused by COVID-19 did not sit well with the growing reliance many providers have on ‘tick-box’ mortgage applications. At Hampden & Co, we are supporting the rising demand among clients for personal, ongoing conversations with their bankers, mortgage brokers and other intermediaries.

Spring 2020 will loom large in the history books of tomorrow. As I sit at my desk, making sense of the tremors the pandemic has caused in the property market, 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.

Conversations with brokers

An unexpected plus from the crisis for me was spending more time with my family, but we never took our foot off the pedal at Hampden & Co – far from it. The transition to homeworking and now back to the office has been smooth and we have been incredibly busy.

As well as ongoing business, our mortgage work has remained buoyant. Indeed, the crisis prompted many approaches from mortgage brokers and other professional intermediaries we had not spoken to before. As mainstream lenders struggled to adapt to the challenges, some intermediaries looked 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 can be sporadic and unpredictable in the short term. This was further highlighted as they adapted to the pandemic. 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 situation. Mainstream banks don’t have the time to do that anymore, but we do, and it explains why our incoming enquiries rose during the pandemic and continue to rise today. 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.

A market that is bouncing back

So where is the property market heading now? While the purchase market was strong over most of 2021 it slowed towards the end of the year following the end of the stamp duty holiday and as a further Covid-19 variant emerged. The mortgage brokers that I am speaking with are now seeing the market return to a strong position heading into Spring, commenting that they have both a healthy pipeline of property coming to the market and a pent-up demand of purchasers, including international buyers returning to London. We expect to be exceedingly busy in the second half of the year.

Reflecting on 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 has been a very different crisis. A lot of banks and lenders have been helping their clients through this extraordinarily challenging situation and in the uncertain years ahead, clients are likely to value more of that flexibility and support.

It is, however, still 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, and now working out to help clients through the cost-of-living 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).

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 times.

Matthew Dobson is a Banking Director based in our London office. He specialises in working with mortgage advisers.

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