A lot has changed in the United Kingdom’s mortgage market during the past few months, the team at Landbay. an online finance platform for buy to let mortgages, has noted in a blog post.
These changes have had a significant impact on all parties involved, which includes brokers, solicitors, valuers, lenders, and borrowers, the Landbay team confirmed while adding that the purchase market in the UK has stalled. There’s also “minimal price transparency, physical valuations are not happening, everyone is working from home and capital markets have reacted by pricing for increased risk,” Landbay reveals.
Although there might be some “green shoots” for a positive recovery beginning to show, like a “softening” in the UK’s capital markets and the “potential for lockdown restrictions relaxing” in the future, Landbay says we’re still seeing “a shift in the demand for the mortgage products available in the market.”
The Landbay team also notes:
“In the BTL sector we have seen the proportion of remortgages increase as purchases fall to record levels, with lower LTV completions now making up nearly half the total market. Lenders who are still in the market today have had to reconsider their exposure to higher LTVs and adjust pricing to reflect risk levels.”
Landbay also noted that in an environment with many uncertainties, it’s been important to stay focused on “tangible actions that steer the organization in the right direction – never confusing the faith that we will prevail in the end with the discipline to confront the facts of our current reality.”
Landbay also mentioned that as we start adjusting to the new environment, it’s worth sharing a few key developments they’re focused on at the moment.
- Implementing new operational processes: On the March 17, 2021, the UK government announced a 3-month payment holiday for mortgage clients impacted by the Coronavirus crisis. This “set in motion a huge amount of work as legislation was interpreted, operational processes put in place with reporting and data requirements mapped out.”
According to Landbay, the challenge here was about new processes and training. And there were also challenges regarding effectively “managing the balance between obtaining an appropriate amount of due diligence information, whilst still giving [their] borrowers a positive experience and putting in place the right data to manage risk through the process.”
Landbay added:
“Thanks to our continual reinvestment in our technology systems, we were quickly able to introduce interview, declaration and data driven processes. We are now in a strong position to efficiently understand our customers’ requirements, make quick decisions and work fairly with them on appropriate structuring to bring their accounts back up to date once we are through the mortgage holiday period.”
- Managing operational risk The “overnight transition to move any company to home working is something that increases operational risk and would never have happened so quickly without the external factors involved,” Landbay noted.
The company added:
“We are lucky at Landbay to be a technology led company with cloud-based systems, VoIP telephone services and a fully online non paper-based process. Therefore, the transition was straightforward and our team has maintained its capacity and level of efficiency.”
Landbay is also a Financial Conduct Authority (FCA) regulated firm. It has to ensure that capital requirements are “maintained, regulatory returns [are being] completed, mandated daily reconciliations managed, and [they] continue to carefully consider customer outcomes for everything [they] do. “C
Landbay also focuses on the “constant monitoring of processes, data and service levels using tools that [they] already had in place has helped ensure we maintain the operational integrity of the organization.”
- Working with our partners We “operate in an environment with many partners involved in the mortgage ecosystem.” It has been “important to regularly check in with each and monitor how they are dealing with the situation, share news and see how we can mutually support each other.”
Landbay also noted:
“With lower volumes across the industry it has been a great time to reach out and make calls to our broker and funder partners to answer questions and share best practices.”
- Remaining engaged with the team At Landbay “we are fortunate to have a team of highly engaged employees. Feedback from them is vital to our management style.”
Landbay reports that it has moved its company “stand up” meetings to the virtual environment “hosting twice weekly whole company Zoom meetings with questions submitted in advance, so that the executive team can address what is on people’s minds.”
- Being future ready We “know that in time the market will recover. At Landbay we are investing in continued improvement to our platform, products, and processes and will emerge stronger than before.” Our development team has “continued to deliver new functionality and we are using our additional underwriter capacity to shape our requirements.”
Julian Cork , COO at Landbay, concludes his blog post by noting:
“Our vision is to be the leading BTL lending platform in the UK, the go to lender in this space and the partner of choice for brokers and their customers wanting to invest in BTL mortgages. Our focus today is keeping us on the right track to reach this goal.”