Julian Knight: Can lenders cope with this new mortgage rush?
After shedding staff in the crisis, they are now struggling to recruit fast enough to meet demand
Personal Finance Editor
Saturday 08 February 2014
In these days of journalists tied to their desk for much of their working week, I think more of us rely on our personal experiences for story inspiration.
This week, for instance, I have been in touch with my mortgage provider after a remortgage application – I am coming to the end of my current deal – had been delayed for an inordinate amount of time.
Obviously, I was concerned that my personal details might have been misplaced, so I gave my lender a call. I was told that they were snowed under and that had been the reason for the delay.
This set my news antennae twitching as I recalled that during the property boom of the first half of the last decade, the likes of Santander (then Abbey) had endured tremendous problems fulfilling mortgage applications.
So could my own mortgage provider's problems be a sign that we were in a similar place – that demand was too great, that they simply didn't have enough staff to cope?
It turned out in my provider's case that it was simply a question of the wrong batch of pre-paid envelopes being sent out and they were on the case. In fact they said they were coping with demand just fine.
I then called Andrew Montlake at the financial adviser Coreco, who has forgotten more about mortgages than I have ever known, and I asked him if he had heard of any problems at other lenders in terms of delays to mortgage applications. "Funny you should say that," was his response.
In short, although it is nowhere near as bad as it became on occasions during the last boom, it does seem that some lenders are struggling.
What has happened is that when new mortgages dropped like a stone from around 130,000 a month to just 42,000 at the depth of the financial crisis, lenders shed staff in droves.
That's understandable when you think about it. If you were in a business where two thirds of the custom vanished almost overnight then you'd expect job losses to follow.
However, with the advent of Funding for Lending and Help to Buy, the mortgage market has returned to vigorous health (although interestingly we are still only at two thirds to three quarters of historic norms as far as the number of new mortgages is concerned) and some lenders simply can't recruit qualified people fast enough.
As a result, there do seem to be delays. And, if they are being encountered by the likes of Mr Montlake – who arranges thousands of mortgages for his clients each year – then what hope is there for the rest of us?
There is a very serious side to all this. Whether or not I am delayed by a week in switching from one deal to another is not that important. However, if I were trying to buy the house of my dreams, and against stiff competition from other buyers, then a delay of even a couple of days arranging a mortgage could mean the vendor losing confidence in me and the sale falling through.
In fact, during the last boom I faced that exact situation due to administration error.
I do hope the Financial Conduct Authority is being proactive and ensuring that lenders are putting the support structures in place so they can fulfil the business that comes to them.
Listen to the insurers
Like me ,you have probably been horrified by the terrible images of people's homes and lives being ruined by the inundation of water in the Somerset Levels.
I don't know enough about whether dredging is good or bad to comment, but I do know that for well over a decade the insurance industry has been warning that large swaths of the UK are practically an uninsurable risk such is the likelihood of flooding.
All the time, governments of all persuasions have got away with spending the bare minimum on defences.
Now that we have seen a prolonged flood event – where people wonder if they will ever be able to occupy their homes again – I hope this may prove a defining moment when we collectively grasp the major implications of what rising river and sea levels and the building on flood plains actually mean for our way of life.
In 2014, it is unacceptable that we allow the water to take parts of our country. Flood management and defences have to be moved to the top of our collective national priorities – which is something the insurers have been saying for years.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Weekly Money: Round-up of the personal finance stories you may have missed 24-28 November
Simon Read: Credit card companies are keeping you in debt with tricks like 0 per cent deals
Bargain Hunter: It isn't a deal breaker if you didn't have a retail spree on Black Friday
Simon Read: There may be trouble ahead for cohabiting couples who don’t make a will
10 tips for taking out a personal loan
- 1 School playground evacuated over 'unusually aggressive' grey squirrel
- 2 Hollywood actor Mickey Rourke beats opponent 33 years his junior in exhibition boxing match
- 3 Jennifer Lawrence scores first UK top 40 single with Hunger Games track 'The Hanging Tree'
- 4 Today was a bad day for renters, landlords, and democracy
- 5 'You should come to my house and eat cheeses with me': 4-year-old sends adorable love letter to girl at school
Obama: The only people with the right to object to immigration are Native Americans
Ukip says babies born to immigrants in the UK should be classed as migrants – which would include Nigel Farage’s own children
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
David Cameron sets out immigration reforms: We should distrust Ukip and their 'snake-oil of simple solutions'
Ukip mocked after mistaking Westminster Cathedral – for a mosque
Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
iJobs Money & Business
Excellent Package: Austen Lloyd: EAST ANGLIA - SENIOR SOLICITOR LEVEL ROLE** -...
£Attractive Package: Citifocus Ltd: Prestigious asset management house seeks a...
£Negotiable: Citifocus Ltd: This is a varied role focusing on the firm's mutua...
£90000 - £140000 per annum + benefits: h2 Recruit Ltd: Are you a high achievin...
Day In a Page
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens