Delays with mortgage approval are causing huge uncertainty for homebuyers throughout the UK, placing further pressure on a long and difficult process. According to insiders, lenders have started to focus very closely on regulations, which adds yet more time to the process of obtaining a mortgage. The lack of inventory means many buyers are forced to wait longer than ever to close on their new home.
Matt Brouard, director of Guernsey estate agent Cooper Brouard, has described the growing scrutiny lenders are placing on mortgage applications. He notes that lenders must now complete detailed affordability checks, conduct tougher property valuations, and perform extensive money laundering checks. “Getting a mortgage today takes far longer than it did 20 or 30 years ago,” Brouard stated. This increasingly long timeframe can add to the stress associated with the overall home buying process.
To add to the misery, Pierre Blampied, managing director of property finders SPF Private Clients, says his clients are facing the same delays. He notes that the issue is systemic across the whole UK. Blampied emphasizes the challenges buyers face, stating that “the knock-on effect of these delays is extra stress for buyers and sellers, while they wait to know if they will actually be moving.”
Worsening the situation, the industry sources say there’s a deficiency of labor in the banking industry that’s focused on mortgages. One local broker noted, “Lenders are now quite often understaffed and there are relatively few individuals specialising in mortgages within the banking sector.” This chronic under manpower plays a major role in the holding up of approval times.
The technology lenders are using is an issue too. For one, many have not modernized their clunky IT systems that might otherwise help automate and simplify the mortgage approval process. One broker remarked, “Due to limited market size, the majority of lenders have not invested in IT systems to speed up the process.” This self-imposed technological stagnation greatly inhibits efficiency at a time when faster approvals are more essential than ever before.
Furthermore, the number of surveyors on the island has greatly decreased. Consumer service impaired. Some surveyors are taking the decision not to offer homebuyers’ surveys, which are absolutely essential for the person buying the property. One agent mentioned, “We’re seeing a lack of surveyors on island sadly, with a number of surveyors not offering a homebuyers’ survey, the desired survey when purchasing a property.”
The conveyancing process has in practice slowed down, with advocates less willing to take risks in their advice to clients. Second, the complexity of transactions has grown. More people are self-employed and making money from a variety of sources. An unnamed source pointed out, “With more people self-employed and earning from multiple sources, the process can be more complex and lengthy.”
