2020 has undoubtedly thrown into the light the very different nature of what employment means for millions upon millions of working people active in the UK today.
For every one of those people lucky enough not to have had their working lives impacted unduly by Covid-19, lockdown and the subsequent recession, there will be another person who has (at best) seen their employment temporarily change or (at worst) has seen their working life turned upside down, perhaps resulting in unemployment or severe restrictions on their ability to work.
The fact of the matter is that while some sectors and industries appear to have been left relatively unscathed, others have been decimated with potentially more damage to come. If you’re working in any business which relies upon footfall or people being able to congregate together, then the chances are that 2020 is likely to be a year to forget.
However, while this remains a very uncertain picture, within the mortgage advice profession the ‘job must go on’. People in such circumstances still need places to live, they still need to keep up their mortgage payments, and a whole raft of people who may not have traditional working patterns require the same.
Plus, there will be those who want to move, want to purchase, and need advice and support in order to show they can afford such things albeit with a more complex income picture to present.
In that sense, as mentioned, Covid-19 has struck different people in very different ways, and the changing way we work and the changing ways we get paid, will determine what these borrowers, or potential borrowers, are able to do next.
For instance, while there will be millions of people in the UK with one full-time job, earning the same amount of money every single month under PAYE, there is undoubtedly a whole different type of employment now available.
Whether you are self-employed, or working multiple jobs, whether you are on zero hours contracts, working part-time, or the bulk of your income comes from commission or bonuses, being a full-time employee of a business does not apply to a growing number of people, and as an industry, the mortgage market needs to reflect that reality and, as advisers, lenders, distributors, there is a requirement to work out the right solutions for clients in those circumstances.
It’s not an easy process to achieve though, especially when we have our government talking about ‘viable’ and ‘non-viable’ jobs, and when we have many people still furloughed, or we have people who could be in viable jobs in 12 months’ time but perhaps not in the shorter-term.
Given these circumstances, it’s perhaps understandable that lenders, for example, are erring on the side of caution; however, advisers will still need to work with ‘complex income/working arrangement’ clients and will still need to (hopefully) find that solution or indeed work towards a recommendation as soon as the market allows.
Again, no one said this was an easy task, especially when you are attempting to navigate through a financial ‘jungle’ when even the client doesn’t truly know the route they have been taking. In 2020 it has been easy for clients to get lost or lose track of their finances, and when you add in the fact that an increasing number will have seen income move up and down, may have missed payments they did not even know about, or find themselves having to take government-led support, then the route out becomes even more difficult to see.
Which, of course, is why they have come to you for advice. But you need clarity and the ability to see the wood for the trees in such situations, otherwise approaching lenders is only going to end one way. Credit reports and banking information is not just a ‘nice to have’ for these types of clients but an absolute necessity, because without this clarity, how else can you possibly move forward with a recommendation?
Certainly the advisers who use Credit Assess have expressed the importance of getting fully transparent upfront information for such clients, indeed for any client, because even if (on the surface) the income seems obvious, there may be some outgoings or blips that no-one is truly aware of.
In complex times, and working with clients who have complex situations and needs, having the right information upfront is vital. We would certainly urge all advisers to get this as soon as possible with any client – it will make you (and their) mortgage journey much more manageable.
David Jones is director of Click2Check