"There is no pre-requisite to meet with clients face-to-face, indeed all aspects of the client contact process can be conducted on the telephone and via e-mail."
From the Credit Crunch to the recession that followed, from the Brexit referendum through to more specific industry developments like the MMR and now the move towards execution-only, we have had no shortage of market-changing issues and economic situations that require change, adaptation and solutions.
Now, of course, we find ourselves having to deal with an altogether different challenge – one that doesn’t necessarily ‘target’ our sector but has much more wide-reaching and potentially hazardous repercussions for all of us. I am of course talking about the Coronavirus and its potential impact not just from a mortgage perspective but for our society as a whole.
It’s hard to know just how the spread of the Coronavirus will ultimately impact on the UK mortgage market specifically but, as in other sectors, if large numbers of people (perhaps even cities themselves) are quarantined away from work or not allowed to congregate with other people, then there is undoubtedly going to be an impact.
Just how likely this might be is a question that can’t yet be answered. As I write, the numbers of those being tested positive with the virus are going up, but are still in the 10s, rather than the hundreds or thousands.
It’s understandable why there is so much focus on the virus because of the way it can be caught but, at present, the numbers are very small and the impact on our market is minimal.
However, we should not be complacent. It’s important that all advisory firms have plans in place they can draw upon, should they be required. The FCA has already warned firms that there could be a level of impact from the virus and we should all have contingency plans to deal with it.
This isn’t necessarily a Coronavirus-specific warning but one for dealing with ‘major events’ and I suspect for advisory firms this will mean (amongst other things) ensuring staff can work from home, providing client access to staff if they are not working from their normal office, ensuring technology and security is maintained at non-office locations particularly around the back-up of information and the like, and overall continuing to ensure the business functions even if a number of staff are not ‘at work’.
The good news, of course, is that for the provision of mortgage advice, there is no pre-requisite to meet with clients face-to-face, indeed all aspects of the client contact process can be conducted on the telephone and via e-mail. Indeed, technology will ensure that the process can continue even if, for example, large numbers of lenders’ staff are working remotely. In fact, many already do.
Therefore, if the same ‘contingency plans’ can be put in place right across the industry, whether it’s an adviser, or packager, lender or conveyancer, then it should be possible to ensure that the client service can continue and that customers get the mortgage finance they need.
What the impact of the virus might be in a wider sense are also up for debate. I read some recent quotes from Alex Maddox, capital markets director at Kensington Mortgages who talked about the potential impact on mortgage rates. He talked about swap rates dropping recently fuelling the likelihood that rates will remain low; indeed we might also see Central Bank intervention – depending on the economic impact of the virus – which could continue to keep Bank Base Rate low, or even cut further, which might also help subdue mortgage pricing.
These of course are very early days and even with the likelihood being that ‘it will get worse before it gets better’ as Boris Johnson said recently, with the right plans in place and the resilient nature of the mortgage market, we do not envisage the market being unduly impacted by the virus.
