Brokers are feeling more positive about the future following the stamp duty freeze.
Seven out of 10 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, according to a recent survey conducted by Skipton Building Society.
Some were predicting a potential decline in business following an initial spike, although recent high lending volumes appear to continue to counter those views.
Those brokers with diversified businesses or with a good client bank feel they would be less affected with an increased focus on Protection product sales.
The findings came from a Covid-19 intermediaries survey conducted by Skipton over May and June.
However, since the Chancellor’s announcement of a temporary Stamp Duty freeze, brokers are reporting a more positive view of sustained business volumes over the coming months.
Paul Fenn, Skipton’s head of business development, said: “Over the last couple of weeks, brokers have told us that first-time buyers have continued to increase despite them already had an 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 remains 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 suggest a healthier market that initially feared by many.”
In Skipton’s Covid-19 survey, brokers also revealed that one-third of them expect to see some changes to the type of business that they are placing over the next three to six months and some predicted an increase in remortgaging and product switches.
However, there remains much speculation about the future, dependant on the economic situation, house price fluctuations, customer confidence and possible changes customer priorities. Brokers expect changes but are unsure which way the market segments will alter.
The research, based on 311 online survey responses from brokers active in the last 12 months, also found that there remains much uncertainty about the future economic situation and housing market and how this will affect their businesses.
Brokers say the current crisis has affected their provider selection criteria. They say they will:
- Place business with providers who can provide higher LTV
- Increase use of providers with flexible lending criteria/underwriting to consider clients’ circumstances
- Prefer providers who make the sales process quick and easy
- Show more loyalty to providers who’ve best supported them through the crisis and with whom they have a good on-going relationship.
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 in’s, ‘virtual hotdesking’ and webinars to help broker understanding of the many criteria and policy changes due to Covid-19.
“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.”