What supermarkets can teach the mortgage market about the COVID-19 crisis
Craig Hall is head of broker relationships & propositions at Legal & General Mortgage Club
The past seven weeks have shown just how adaptable the mortgage market is. Automated valuation models have kept the market alive, and mortgage advisers have embraced the latest technology to communicate with their clients in lockdown.
It’s been far from plain sailing, however. Whilst last week’s reopening of the housing market has provided a new impetus to get things moving, it’s clear that the challenging circumstances are likely to be with us for some time.
In these difficult times, it can pay to see how other industries are reacting to the crisis to improve how we support our clients.
Every little helps
An unlikely example has come in the form of supermarkets, which have stepped up in their response to COVID-19. There has been a huge logistical effort to ensure shelves remain stocked, while businesses like Aldi and Morrisons have quickly launched delivery services to support customers in need.
In a recent blog from Savanta discussing Tesco’s approach to the crisis, there were some particularly useful examples on how the mortgage industry could interact with customers.
Tesco’s strategy has been built around compassion. Examples include its support for key workers, from an NHS-only store in the London Nightingale hospital to a 10% bonus for staff working during the outbreak.
This compassion is equally important for mortgage advisers. Many will have key workers on their books, so keeping in touch with them and recognising the valuable work they do is important.
I have even seen some advisers going above and beyond in terms of how they can support NHS workers, even cutting fees, for example.
There is a huge amount of uncertainty for many of our other customers at this time too. While we may see some pent up demand and a return of prospective buyers to the now reopened housing market, we can’t ignore the fact that millions are furloughed and many more have or are likely to suffer financial hardship.
One in seven mortgages is now on a payment holiday. We must recognise these hardships and continue to offer support where we can to help borrowers make the right choices, whether that’s a payment holiday, converting to interest-only or remortgaging to secure more manageable repayments.
At the same time, consumer spending habits have changed rapidly. Legal & General’s Isolation Economy research has shown that while some ‘at home’ sectors have prospered during the lockdown, overall consumer spending has fallen 31%.
More of us are spending less, but advisers should recognise this as an opportunity to guide clients, including prospective first-time buyers who may now be in a position to save more and even bring forward their housing plans.
Open all hours
We all remember the early scenes of empty shelves in our local supermarkets andpanic-buying on the TV. Supermarkets reacted by reducing their opening hours, but Tesco ensured it remained open for longer than its competitors. This concept of ‘increased availability’ is something that advisers can offer to their clients as well.
While we can’t offer a truly 24-hour service, making it clear to customers that we are there to help is vital. Their circumstances could have changed dramatically since the onset of COVID-19, so a quick email or offer of a video call to check-in can remind them that we really do care.
It can also be a great opportunity to demonstrate the valuable role that advisers play by providing advice that could save them money in addition to providing guidance on a future home move.
Just as Tesco has adapted its marketing and communications in response to the COVID-19 crisis, advisers can too. With so much uncertainty about what the future holds, advisers have an opportunity to demonstrate their expertise by taking a nimble approach to communications.
This isn’t just a case of arranging more video calls, but also turning to social media, posting about Government and industry announcements, and providing weekly newsletters that reflect on what these changes mean for customers. There are plenty of tools available to advisers to help them get started and stay connected, including our Marketing Toolkit.
Advisers should be proud of how they have adapted in the face of this crisis thus far, but there is still more we can do to ensure our clients have the support they need at this time.
Looking to other industries as examples of best practice in this area could provide a guiding light for the new normal we find ourselves in.