It joins other existing schemes such as Help-to-Buy, Shared Ownership and the First Homes Scheme in helping sustain the market, particularly among first-time buyers.
Eventually, though, we can expect the market to slow. The tapering and then removal of the stamp duty holiday will mean less frantic activity.
As we move to the latter half of the year, attention is likely to shift to remortgaging as borrowers look to lock in low interest rates. Advisers will also start to look to the future and a post-pandemic normal.
Two themes are likely to prove important: increasing focus on the specialist lending market, and innovations powered by technology.
Special considerations
The focus on specialist lending is likely to receive a further boost from economic uncertainty (bad credit and complex situations due to the pandemic). To date, much of the economic impact around the Covid crisis has yet to be felt.
Mortgage holidays have been extended to July and furlough to the end of September. About 5m people are still on the scheme, according to the latest government estimates.
As government support wanes, and with the Office for Budget Responsibility warning that unemployment could grow to 6.5 per cent by the end of the year, we could increasingly start to see cases requiring specialist advice. This also reinforces long-term trends, particularly the rise in self-employment.
In the short term, the pandemic has hit many self-employed workers' incomes, emphasising the importance of advice for those remortgaging or trying to buy for the first time.
Longer term, though, the pandemic may result in a rise in the number of those working in the gig economy, just as the financial crisis a decade ago saw a sustained boost in the numbers of self-employed.
That, again, points to the need for an increasing role for specialist lending to cater for our changing society. Advisers need to be prepared for this, whether through in-house expertise or by referring them to third-party specialists.
A golden period for product innovation
Similarly, partly by coincidence and partly in response to increasing pressures on first-time buyers and others due to the pandemic, the crisis has seen a sustained period of mortgage product innovation.
For many buyers, these new products could provide an interesting avenue to explore. Again, if their clients are to benefit, advisers need to fully understand the latest products to offer appropriate guidance and answer their questions.
A few of the key developments are worth exploring in more detail.
Perhaps the most interesting are the new options for low or no-deposit borrowing powered by technology from the likes of Proportunity and Generation Home.
