Even for those of us who have been in the mortgage market for a considerable length of time, this most recent few weeks has felt very different to many previous ‘unprecedented’ periods.
The incredible pace of change we have all witnessed since the ‘Mini Budget’ has of course been very difficult to get a handle on, and I have nothing but admiration for advisers who have been working incredibly long hours trying to get their clients the mortgages they want and need, at the best rates possible.
Busy markets are nothing new of course, nor indeed does this feel truly ‘unprecedented’ in terms of busy activity fuelled particularly by borrowers attempting to secure their deals as quickly as possible.
There have been a number of periods like this over the last decade, I’m thinking specifically of stamp duty holidays, plus of course the post-lockdown market which resulted in a considerable surge in demand and activity.
But clearly this latest environment has a very different ‘edge’ to it, particularly for lenders seeking to get a handle on current and future mortgage pricing, set against the backdrop of very changeable rates/price of funds.
And, of course, for advisers and their clients who may be coming to the end of special mortgage deals with rates which appear very different, and more expensive, when compared to the level they would have previously mortgaged at.
We have perhaps, all of us, become accustomed to a low-rate environment over the last 10 years or so, and while an increase in rates and pricing was anticipated, I suspect few of us believed it would happen in such a short space of time and at such a swift upward trajectory.
As a lender active in both the specialist residential and buy-to-let markets, purely through the intermediary sector, it has been fairly obvious to us at Foundation that our ongoing focus has needed to be on transparency and communication when it came to our product ranges.
Clearly, as I hope you will know, we have needed to reprice in recent weeks but I hope that in providing a fair amount of notice of these changes, and in also allowing additional days to allow advisers to convert DIPs to full applications, we have given the intermediary sector as much time as possible to secure clients mortgage finance at our original pricing.
What I can also say is that our service levels have been appropriately high in recent weeks and months to allow the processing of cases in, what we believe is, a very quick timescale. As I write, for example, turnaround times for our residential and buy-to-let cases are one day for DIP referral, and application and underwriter review, and (at the moment) we see nothing changing this.
It’s also been important to us that, while we have repriced, we have also sought to launch new products where appropriate at rates we believe are competitive. This has particularly been the case with our Green product range, because we’re acutely aware of the importance of energy-efficiency and the fact that properties with an EPC level of C and above are going to be increasingly in demand.
Our ABC+ products provide a price ‘reward’ for those borrowers purchasing or remortgaging properties with EPC ratings of C and above, and we were recently able to launch some 65% LTV Special Edition discount products with no early repayment charges, which again we believe are price competitive and allow borrowers to remortgage in the future without any penalty.
Overall, while this is unlikely to be the market any of us envisaged when we came out of the summer months, it is the market we currently have to deal with, and I’m aware of just what advisers are doing on behalf of their clients in order to keep them calm and to ease the understandable stress and worry many will be feeling.
Foundation remains here to support advisers and their clients, and we have the resource and appetite to do so. Please make use of us during this period and we’ll continue to provide you with all you need to keep doing the best for your clients.
Mark Whitear is director of commercial development at Foundation Home Loans