2020 has certainly been a memorable year, but it’s one most people are keen to see the back of. Like many industries, the coronavirus pandemic has made this year a tough one for the specialist lending and second charge mortgage sector alike, but I’m pleased to be able to say that the recovery has begun.

From a record low in May, FLA figures show that the number of new mortgages has increased month-on-month. The value of new business in October was £68 million. That’s up from £21 million in May and £43 million in August.

We will see an inevitable reduction of business value in December, as this is expected due to seasonality rather than any underlying weakness. Overall, we are moving in a positive direction and I believe we will be achieving a similar run rate to 2019 by the tail end of Q2 2021.

However, while 2020 is an anomaly, it’s important that brokers and intermediaries take the time to analyse and reflect upon how this year has changed business and customer behaviour. There are lessons to be learned that can be used to provide better experiences for lenders and customers.

Embracing change in the second charge mortgage sector

In 2021, I believe that broker behaviour will be driven by consumer expectation. It’s essential moving forward that we reach customers in ways that are familiar and comfortable to them.

Will there be a greater desire to transact online? Has our demographic of consumers embraced technology?

Ordering everything from pints in pubs to kitchen appliances through apps and websites may speed up the adoption of technology by people other than classic ‘millennial’, to whom this technological accessibility is second nature.

Brokers and intermediaries need to look for trends and changes in consumer habits and embrace them. Doing this will help to prolong the market’s recovery.

That said, technology-led operations are only one piece of the puzzle. The rate at which the country can return to normal will dictate the recovery in most sectors and secured lending is no different.

There remains a significant amount of uncertainty around the levels of unemployment that is likely to crystallize as government support is removed.

Therefore, one thing remains paramount for us at Pepper and the sector as a whole in 2021: we must continue to lend as responsibly as we did before and during the pandemic.

The new year at Pepper Money

So what can you expect from us in 2021?

There is no doubt that the competitive landscape has changed and we will again look at the opportunities this presents for us to help a wider range of customers obtain appropriately designed and targeted financial products.

Pepper already has the widest variety of products in the second charge mortgage sector and will continue to evaluate these, as well as reviewing pricing regularly to ensure that our products remain competitive.

2020 has been a challenging year, but my colleagues at Pepper are resilient, adaptable and always strive to deliver exceptional service to our brokers. Given the upheaval of deploying work-from-home we faced back in March 2020 alongside the entire population, the fact our service proposition has remained unchanged throughout these unprecedented times is a credit to the outstanding team we’ve built.

We’re looking forward to delivering this same level of service to you in 2021!