Reflecting on 2020
Rameez Zafar is chief executive and co-Founder at eligible
Well, that was a strange one… The year brought a range of challenges, from working-from-home and a complete dry-spell in March, to a surge of inquiries and cases after the stamp duty holiday; overwhelming both intermediaries and lenders.
As the dust settles and we reflect back – we should be grateful, and we should be proud. Our industry showed a level of resilience that very few enjoyed last year. Last March, most advisers were braced for results well-behind their targets. By year-end, most met or even beat these same targets.
The bounce-back was a literal ‘V-shaped’ recovery. For context, V-shaped recoveries are usually the best-case scenario post-recession. So, while the rest of the UK is in for a longer, harder, slower recovery; the mortgage market is a positive outlier and has outperformed.
What made the mortgage industry an outlier?
In short – the property market enjoyed a mini-boom in 2020. The heightened activity was driven by a combination of pent-up demand, built up during the UK’s first lockdown, and purchasers keen to take advantage of the government’s stamp duty holiday.
Housing market activity was strong and importantly, consistent in H2-2020. Month-on-month, chartered surveyor estate agents reported increases in new buyer enquiries, new instructions, agreed sales and house prices. Demand from potential buyers increased for six months in a row by December, as people rushed to find a property and complete their purchase ahead of the end of the stamp duty holiday for homes costing up to £500,000 on 31 March 2021.
The number of properties being put up for sale also rose for the sixth consecutive month – the longest uninterrupted sequence of growth in fresh listings since 2013. Despite this increase in sellers, the average number of properties that estate agents had on their books remained close to record lows.
Unsurprisingly, the high levels of buyer demand, combined with the shortage of homes for sale, continued to push property values higher in October, with surveyors reporting price gains in all areas of the UK. Wales, the South West, the West Midlands and Yorkshire and the Humber all saw exceptionally strong house price growth.
While transaction levels look set to remain elevated for the rest of the year, both activity and house price growth are expected to slow in 2021 in the face of economic headwinds and the withdrawal of government support, according to the Royal Institution of Chartered Surveyors’ (RICS) monthly survey of its members.
Swamped intermediaries and lender bottle-necks.
In many ways – the flying property market bordered on ‘too much of a good thing’. For lenders, this meant juggling payment holiday offerings, supply/demand management of high LTV products and trying to ease bottlenecks which put a huge strain on their SLA.
Meanwhile, intermediaries were swamped – the 6-month property surge meant advisers were up to their eyeballs in leads. This coupled with each case taking longer due to lender backlogs – meant advisers had to be ‘head-down’, ‘flat-out’ and every other sales phrase for working their socks off.
What happens in Q1-2021
Without looking too far ahead, there are reasonable predictions we can make for 2021.
1. More New Leads
Firstly, until the stamp duty holiday ends, we can expect more of the same. Much like we saw in 2015, when stamp duty increased; there is going to be a surge of new purchase leads trying to get their completions done before the cut-off (we’ll leave potential extensions for another time). It also means that some of the leads in 2020 will come back around.
2. More Remortgage opportunities from the client-bank
Many lenders say that Q1-2021 will be some of their highest volumes for product expiries in years. For lenders, this is a chance to gain more ground on execution-only PTs. Over the past 2 years, the trend has been consistent: lenders are contacting clients earlier and making the execution-only PT process easier.
Advisers need to be wary of this and proactively stay in touch. It will be very easy for an adviser to be ‘head down’ to close all the new leads before the deadline and miss out on an entire quarter’s worth of remortgage business (because these clients will have already gone direct).
3. If you’re an adviser and the above makes you think: “I can’t be in two places at once.”
Yes, you can. If you know, you know… Retain by Eligible keeps in regular contact with all of your clients for you – and most importantly as you. Without advisers lifting a finger, it sends branded and personalised emails from advisers to their clients – to keep them warm, loyal and more likely to give the adviser more business.
This means as far as your client is concerned, you are the most helpful adviser out there: sending them market/news updates, sending them helpful content, reminding them about their product expiry and even wishing them a happy birthday. When the client wants to do business, the adviser is notified via email.
Just imagine that for a sec, it’s Monday at 11am and for the last 2 hours you have been on hold to a lender and been staring a loading screen on their online portal. While our system is quietly working away in the background, chasing down all of your clients for you.
A final thought…
Thanks to all those that contributed to the success of the past year… 2021 will be no different for us, we will continue to dedicate our time to servicing our customers and partners, both old and new.
My piece of advice for 2021 is don’t forget those who saved your bacon, like back in March 2020. Existing clients are your lifeblood, remember how quickly things can change.