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

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

PROMOTED VIDEO
News
The data shows that the number of “unlawfully” large infant classes has doubled in the last 12 months alone
i100Mike Stuchbery, a teacher in Great Yarmouth, said he received abuse
Arts and Entertainment
The starship in Star Wars: The Force Awakens
filmsThe first glimpse of JJ Abrams' new film has been released online
Sport
Rio Ferdinand returns for QPR
sportRio Ferdinand returns from his three-game suspension today
News
The Speaker of the House will takes his turn as guest editor of the Today programme
arts + ents
Arts and Entertainment
St Peter’s Seminary in Cardross. Argyll, has remained derelict for more than 25 years
arts + ents
News
people

Watch the spoof Thanksgiving segment filmed for Live!
Sport
Billy Twelvetrees will start for England against Australia tomorrow with Owen Farrell dropping to the bench
rugbyEngland need a victory against Australia today
Arts and Entertainment
The cover of The Guest Cat – expect to see it everywhere
books
Sport
Tyson Fury poses outside the Imperial War Museum in south London ahead of his fight against Dereck Chisora
boxingAll British heavyweight clash gets underway on Saturday night
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Austen Lloyd: Company Secretary

    Excellent Package: Austen Lloyd: EAST ANGLIA - SENIOR SOLICITOR LEVEL ROLE** -...

    Citifocus Ltd: German Speaking Client Specialist

    £Attractive Package: Citifocus Ltd: Prestigious asset management house seeks a...

    Citifocus Ltd: Performance & Risk Oversight

    £Negotiable: Citifocus Ltd: This is a varied role focusing on the firm's mutua...

    h2 Recruit Ltd: Sales Director - SaaS (SME/Channel) - £140,000 OTE

    £90000 - £140000 per annum + benefits: h2 Recruit Ltd: Are you a high achievin...

    Day In a Page

    Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

    Christmas Appeal

    Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
    Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

    Is it always right to try to prolong life?

    Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
    Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

    What does it take for women to get to the top?

    Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
    Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

    Knitting pretty: British Christmas Jumpers

    Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
    French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

    French chefs campaign against bullying

    A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
    Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

    Just what you need on a New Year hangover...

    Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
    Cuba set to stage its first US musical in 50 years

    Cuba to stage first US musical in 50 years

    Claire Allfree finds out if the new production of Rent will hit the right note in Havana
    Christmas 2014: 10 best educational toys

    Learn and play: 10 best educational toys

    Of course you want them to have fun, but even better if they can learn at the same time
    Paul Scholes column: I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season

    Paul Scholes column

    I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
    Lewis Moody column: Stuart Lancaster has made all the right calls – now England must deliver

    Lewis Moody: Lancaster has made all the right calls – now England must deliver

    So what must the red-rose do differently? They have to take the points on offer 
    Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

    Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

    It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
    Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

    Sol Campbell cries foul at Labour's mansion tax

    The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
    Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

    Sarkozy returns

    The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
    Is the criticism of Ed Miliband a coded form of anti-Semitism?

    Is the criticism of Miliband anti-Semitic?

    Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
    Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

    Ouija boards are the must-have festive gift

    Simon Usborne explores the appeal - and mysteries - of a century-old parlour game