Impact of COVID-19 on Intermediaries

21/09/2020

Throughout May and June we conducted a survey to help us get a broader view of how brokers felt about the impact of COVID-19, what could be expected over the next six months and how well they felt we have supported brokers' business so far in the crisis. Our research was based on 311 UK brokers who had been active in the previous 12 months.

Our research found that seven out of ten brokers across the UK were worried about the impact of the COVID-19 crisis on their business prior to the post-lockdown surge in business volumes. Many were predicting a potential decline in business following an initial spike, although recent high lending volumes reported by some brokers appear to continue to counter these views.

However, brokers with diversified businesses or with a good client bank felt they would be less affected with an increased focus on Protection products. Since the Chancellor’s announcement of a temporary Stamp Duty freeze, we’ve found brokers are reporting a positive view of business volumes over the coming months.

We asked Paul Fenn, our Director of Business Development to share his views:

Paul Fenn

"Over the last couple of weeks, brokers have told us that First Time Buyers have continued to increase despite them already having had a stamp duty exemption up to £300k. And brokers are keen to see if there is a significant increase in the ‘next time buyer’ segments, due to the benefit of zero stamp duty on those larger property transactions between £300k – £500k.

"Whilst there remain some challenges for First Time Buyers due to the increase in initial deposits, with lenders still cautious around offering higher LTV products, the recent changes and sustained lending volumes may suggest a healthier market than initially feared by many."

Paul Fenn, Head of Business Development

Further findings from our survey reveal that one-third of brokers expect to see changes to the type of business they’re placing over the next 3-6 months, with some predicting of an increase in re-mortgaging and product switches.

There’s still much speculation about the future, depending on factors such as the economic situation, fluctuations in house prices, customer confidence and a possible change in customer priorities. Changes are expected but it’s still unclear as to which way the market segments will alter.

Key findings from the research show that the current crisis has affected many brokers' criteria when it comes to selecting a provider. Many brokers are now looking for lenders who can provide a higher LTV, a quick and easy process, provide flexible lending criteria & underwriting, and who have supported them throughout the crisis and built a good on-going relationship.

Paul Fenn added “We’re delighted that the vast majority of brokers think Skipton has responded well to the crisis, praising our team for keeping them informed, with clear, concise communications. They have found us easy to deal with and, for some, their experience from lenders during the crisis will influence where future business is placed.

"There is much uncertainty about the future economic situation and housing market and how this will affect their businesses. Communication is key to supporting brokers right now; updates through all channels need to be relevant, concise, show empathy and acknowledge the uncertainty. Relationships with BDMs remain important and there is more emphasis on what additional support BDMs can provide, such as regular ‘virtual’ check-ins, ‘virtual hotdesking’ and webinars to help broker understanding of the many criteria and policy changes due to COVID-19.

"At Skipton we need to ensure we continue to take a flexible approach to lending and underwriting, particularly for clients experiencing financial change. Feedback from our ongoing broker experience research continues to help us understand brokers’ needs and how individual cases have been handled throughout the COVID-19 period. This research helps to get a broader view of how brokers are feeling, their predictions for the future and the support they need from Skipton both during the COVID-19 crisis and beyond.”

To find out more what Skipton have been doing to support brokers during this time visit our Coronavirus hub.

All information correct at time of publish.

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