27 December 2023

Is a human approach the new alternative?

By Laura Sneddon, Head of Mortgage Sales at Hinckley & Rugby Building Society

The mortgage landscape is rapidly changing. Today’s average mortgage borrower – and more importantly, tomorrow's – is a very different person from yesteryear’s. Indeed, from recent studies and surveys it is clear that non-standard is fast becoming the new normal.

The consensus seems to be that within the next six or seven years, the UK specialist residential mortgage market will increase by around 300%. It’s a huge shift, which has been influenced by several factors. In no small way, one of those factors is how working patterns changed during the Covid pandemic.

The need for flexible working during the lockdown period evolved to become a desirable feature of employment for many, and economically desirable for many employers. And a new army of remote and hybrid workers began turning spare bedrooms into dedicated working environments – something permanent and well-equipped rather than making do with the kitchen table.

Now, a room suitable as a home office is high on many homebuyers’ shopping lists. Often, that means a bigger house or with a space that can be converted. Paying for that, as well as meeting cost-of-living challenges, has led to changes in employment patterns; in turn leading to a need for much greater lender sympathy for non-standard income streams.

It all adds up to the need for a fundamental change in lender attitudes.

Not all lenders need to change, however. Hinckley & Rugby already applies an open-minded manual underwriting process to all complex mortgage cases. We feel that only through a human approach can common sense be applied to individual circumstances, and to deserving cases that fall foul of many other lenders’ dispassionate algorithms.

Our Mortgage Referrals Committee (MRC) meets daily to manually review such cases, and provides same-day decisions that brokers can rely on. MRC meetings include our CEO and Director of Lending: the highest mandated individuals in the society. They make solid and reliable decisions, not just ‘it looks good, send it in and we’ll consider’. The committee is able to assess individual needs and adapt to them, applying flexibility to our criteria and overcoming barriers wherever possible – to reach ‘Yes!’.

Additionally, we invite brokers to attend our online event – MRC Live – every month. It’s a drop-in clinic where brokers can discuss their most challenging cases direct with the people who make decisions. MRC may officially stand for Mortgage Referrals Committee, but for our monthly ‘live’ events we like to think of it as Making Real-time Commitments.

Feedback from brokers for this monthly event has been fantastic, with comments including:

“When it’s done as a drop-in discussion with the relevant people answering the queries, there is nothing better.”

“Very refreshing to see that commonsense lending still works.”

“Makes a huge difference! Everyone got to ask about specific cases, and got to know the people at Hinckley & Rugby who actually make the decisions.”

Upcoming dates for our MRC Live events are provided here: https://intermediaries.hrbs.co.uk/the-society/mortgage-referrals-committee/

Brokers who just want to observe and get a feel for the process are very welcome to join us – and to submit challenging cases at any time for same-day review.

For adviser use only. Please note this content has been supplied by our lender partner and as such, is their responsibility. No party shall have any right of action against Legal & General in relation to the accuracy or completeness of the information in this article.