In Focus: Vulnerability  

Ongoing support for mortgage clients in 2021

This article is part of
In Focus: How Covid has left the mortgage market exposed

Vikki Jefferies, proposition director for Primis Mortgage Network, provides some practical tips: "Revisiting the fact find is often a good place for brokers to start if a client is facing financial hardship, as this can often help to identify potential solutions.

"For example, there are several product transfer and remortgage options available to customers right now, and one of these solutions may suit customers who would benefit from reducing their monthly repayments.

"It’s also important for advisers to remember that lenders are incredibly keen to work with customers to arrange alternative payment plans if they are struggling financially. Repossession is always a last resort. Lenders remain committed to offering customers solutions that align with their specific circumstances."

And she encourages advisers to check in with clients to make sure their finances are adequately protected throughout this time, calling protection policies a "lifeline" for people in a financially vulnerable position.

Looking ahead

Is there more the government and/or industry could or should do to protect buy-to-let landlords, tenants and residential mortgage borrowers? 

Mr Stewart says there are always improvements that can be made and tweaks to help with affordability and protecting people's living space.

For example, on January 7 the government announced it would give leaseholders the right to extend their lease by up to 990 years at zero ground rent. A leaseholder who chooses to extend their lease will no longer pay any ground rent to the freeholder.

The government said the changes will benefit 4.5m people, who could save "thousands to tens of thousands of pounds".

It is a step in the right direction, for sure. But there is a wider piece, too, Mr Stewart says, about how lenders, brokers and even regulators think about demographic and socio-economic change, not just in 2021 but for the years ahead.

He explains: "[We need to consider] the ever-levelling up of demographics, whereby 65 isn’t old any more and more flexibility with generational debt needs to be thought through.

"That said, there is only so much we can do. We have moved away from 'caveat emptor' over the years to the point whereby the consumer cannot fail anymore.

"To me, that is as dangerous for the economy as going too far the other way. A return to individual responsibility is something that could benefit us all."

David Kennedy, chief lending officer at Masthaven, is clear there is "no established playbook" when it comes to Covid-19. He acknowledges the "difficult task of balancing continued support against this unpredictable virus timeline", a task which falls on the industry, regulators and the government.