When will mortgage levels recover to pre COVID-19 levels?

With the Bank of England forecasting the worst recession in 300 years, just when will mortgage lending recover to pre COVID-19 levels? We asked 467 mortgage brokers to find out what they thought.

Perhaps surprisingly, given the rather apocalyptic economic predictions, most were pretty optimistic. 77% of brokers told us that they believe mortgage lending will recover to pre COVID-19 levels within 9 months. 51% believe that this recovery will happen within 6 months.

467 brokers shared their thoughts as part of the fourth edition of our Mortgage Lender Benchmark which is due to be released in June (we’re working on this now…with a potent mix of coffee, green tea and Diet Coke keeping us rather well caffeinated)! Interestingly, appointed representatives proved to be significantly more optimistic than directly authorised brokers, with 59% of appointed representatives predicting that lending levels will recover within six months, compared to just 37% of directly authorised brokers.

The Prime Minister’s speech to the nation on Sunday made it clear that tentative steps are being taken to get the economy moving, and on the mortgage front, many lenders are talking loudly about their appetite to lend. That said, with job security likely to be a concern for many consumers, and predictions that house prices may decline by up to 13%, it’s really hard to see customer appetite for new mortgage lending returning until 2021 at the earliest.

Brokers focused on the equity release market proved to be particularly sceptical of any V-shaped bounce back. While 51% of all brokers completing the survey believe that lending levels will recover within 6 months, just 19% of equity release-focused brokers agreed. 28% of equity release-focused brokers predicted that lending levels would take more than 12 months to recover.

The fourth edition of the Mortgage Lender Benchmark, which is a bi-annual independent research study that helps lenders to understand what brokers really think about them and how they compare with other lenders, will be released in early June. Brokers are asked about lenders’ criteria, speed, eligibility, communication and relationship managers. They are also asked to share what they like about each lender and what could be better.

For the first time, this research also asked brokers to rate the technology they use, including criteria and sourcing systems. Alongside league table data, the study will publish in depth SWOT (strength, weaknesses, opportunities and threats) analysis on 42 individual lenders, providing unique insight across banks, building societies, specialist and lifetime lenders.

If you’d like to find out more about this research, please do get in contact.