Following the impact of coronavirus lenders are reviewing their mortgage products, but for borrowers, the good news is that banks are awash with liquidity. Funds are available; there are other issues driving this.

The first is a processing one – banks are not all set up for staff to work from home. In England the big processing centres are closed and they are operating with a skeleton staff. Those staff that are working are focusing on arranging payment holidays for customers that genuinely need it. Clearly in the offshore centres we don’t have big processing centres, but a number of lenders are dealing with high volumes of payment holiday requests and the staff are still prioritising these enquiries.

There is also an issue with valuations. If lenders can’t get a valuer out to inspect the property, it is impossible to process a mortgage application to offer stage. Skipton International are not currently accepting new applications as surveyors are unable to gain access to properties to undertake valuations.

So what does this mean for you?

If you already have a mortgage

Lenders are rightly throwing all their resources into dealing with payment holiday requests. But in the same way that people are stockpiling food they don’t need, there are borrowers who are asking for payment holidays when they don’t need them, and this is blocking enquiries for those who do.

Ask yourself ‘Can I pay the mortgage this month?’ And if the answer is ‘yes’, then please carry on as normal. This will not only free up enquiry lines for those who genuinely need a payment holiday to arrange one, but it will also help the industry and the economy as a whole get back to normal quicker.

If you were looking to arrange a mortgage

There is little lenders can do until valuations and application processing approaches normality. Lenders are adapting as swiftly as they can and as there is no issue with liquidity it is hoped that this will be a short-term issue.

The coronavirus and lenders’ response to it is all still very new. We trust that it won’t be long before the necessary adjustments have been made so that they can get back to ‘business as usual’ or as close to it as possible. In the meantime, your broker at SPF Private Clients is on the end of the phone or on email if you need any advice.