Why the impact of the furlough scheme will not disappear in April

This is obviously something lenders and intermediaries have been dealing with for many months now. However, as time passes by, demand from borrowers on the furlough scheme appears to be increasing. Recent data from Legal & General Mortgage Club highlighted that searches for mortgage products suitable for furloughed borrowers increased by 230% between October and November. In October, Legal & General’s SmartrCriteria tool, which helps advisers quickly determine which lenders would consider a particular mortgage applicant, recorded 175 searches for furlough-friendly products. A figure which subsequently increased by 230% to 577 searches in November.

In addition, the latest figures from Knowledge Bank showed that ‘furloughed workers’ reappeared in November’s top five most searched terms by brokers in the residential mortgage market. It also outlined just how quickly lenders reacted, with over 30 updates to criteria in just two days recorded by Knowledge Bank in its ‘furloughed workers’ category. Unfortunately for borrowers, most lenders tightened criteria for those who had been furloughed at any time, making it harder for them to buy or remortgage.

This data highlights the growing number of borrowers affected by lingering uncertainty across a variety of market sectors and their ability to access a range of solutions to meet their ongoing housing needs. This was nicely summed up by Kevin Roberts, director of Legal & General Mortgage Club, when he said: “Following the chancellor’s announcement last month confirming the government’s commitment to extend the furlough scheme, we are seeing more borrowers turn to the expertise of mortgage advisers to find furlough-friendly mortgages. Furloughed workers still need access to mortgage products and they shouldn’t assume that their circumstances mean they are locked out of the mortgage market.”

I couldn’t agree more with these sentiments and it really does underline the value of good, professional impartial advice for anyone who is currently considering any property-related decision. It’s also vital for intermediaries to be aware of the types of solutions which are out there for clients who may have been forced onto the furlough scheme.

Lenders will have their own individual approaches to criteria, policy and product availability when considering these types of scenarios. And this is where BDMs and lending support teams – backed by personalised underwriting routes – can play such an important role in being able to outline lending capabilities for intermediary partners and their clients.

The impact of the furlough scheme will not disappear in April and working with specialist lenders who have solutions in place to support a variety of property-related aspirations will prove vital for a growing number of intermediaries and their clients over the course of 2021.