Go back to a time pre-Covid pandemic, and we might all have had a few issues defining just what a ‘Key Worker’ was, and did, within UK society.
Little did we know just how vital these individuals, and the roles they carry out, were going to be, and how central they are to how all our most-trusted and valued services continue to function, not just in a ‘normal’ situation but in a totally – and hopefully never to be repeated – unprecedented time such as during the various lockdowns we had.
It is difficult to envisage how that period might have gone without those individuals in the Armed Forces, the NHS and other emergency services, and indeed teachers, police and prison officers. All made a contribution that we might never truly be able to thank them for.
According to the last Office for National Statistics (ONS) data we have on key workers in the UK from back in 2019, 10.6 million people – that’s a third of the entire UK workforce – were employed in key worker occupations and industries.
The largest group, as you might expect, worked in health and social care (over three million people), with the second biggest group being in education and childcare (over two million).
What is also interesting here is the gender and regional split within key worker occupations. Three-fifths of all UK key workers are women (58% to 42%), while the split for non-key worker roles is exactly the opposite.
Plus, depending on where you are in the country, you’ll see a different split of key workers. That seems particularly pertinent and of interest to mortgage advisers who might rely upon local business the most, because if, for example, you work in West Somerset then 51% of the entire employed population are key workers, while Wyre is up at 48% and Hambleton is at 47%.
Move into areas such as South Bucks (22%) or Epping Forest (24%) and that proportion is much different, over half of what you might find in the areas mentioned above.
So, as an adviser, if you are active in a region of the country where key workers are more prominent, then you’re likely to be looking to be working with them more and looking for the most suitable mortgage options. And, if we’re being honest here, the options available to Key Workers have not always been as plentiful as you, and they, might have wished.
In a very true sense however, Key Workers should be looked at as a unique borrower demographic by lenders, and – they should be able to access a set of products and solutions specific to their unique circumstances and needs. Foundation’s recently launched Key Workers proposition sets out to address those needs.
For example, Key Workers historically tend to be on lower salaries. We’ll all be acutely aware of how a lot of people view this, with recent strike action taking place across many areas of the public sector, but conversely they tend to have jobs which are more stable and generally not impacted as badly in terms of redundancy, etc.
That, in itself, can help change the way we as a specialist residential lender support Key Workers, hence why we are able to offer them 5.5 times Loan-to-Income (LTI), much in the same way we offer a higher LTI option for Professionals. And we can offer loans up to a higher loan-to-value (LTV) and maximum loans up to £1m at 75% LTV.
And, as mentioned, it’s also important to recognise that Key Workers are not just those working in education or the health service, but also those who work in the Army, Navy or RAF, plus those who work in the UK Fire Service, University lecturers, as well as those in the Police and Prison Service.
All fit the bill in terms of the importance of the job they provide, and we believe can be looked at differently in terms of potential borrowing given that job security tends to be a lot stronger, and can therefore be relied upon when making the lending/underwriting decision. Not forgetting of course that these individuals are less likely to be out of work for a considerable amount of time without any income, because of the roles they fulfil.
As a final point to make here, and tied in with the importance of ensuring Key Workers get the mortgage finance they want and need, is the significance of the need for these individuals to be able to live within the areas they serve.
We’ve heard many tales of Key Workers being priced out of the local areas, forced to travel long distances into work, and this clearly has an impact not just on them as individuals, and their ability to keep doing this work, but also in terms of the quality of service delivered locally.
It’s therefore of great value to those local communities to have Key Workers owning homes within them, and we believe our new proposition will be able to provide a further range of product options for advisers active in this space and working with these individuals.
Grant Hendry is director of sales at Foundation Home Loans
