What on Earth is going on with the mortgage market at the moment? Lots of conflicting stories on the news and people claiming banks have cancelled their mortgages and now charging them 10% interest to re-apply. In a change up to our usual blog format, one of our senior mortgage and protection advisors Jade Pinkerton weighs in and shares her thoughts on what is happening with the banks and whether or not we can expect them to cope with constantly changing rates.
“First things first…the banks cannot cope. Well at least, they aren’t coping right now. This isn’t in relation to the volatile market and changing interest rates – but simply in relation to demand of mortgage applications and phone calls they are receiving. And that’s across the board.
The banks and building societies have been cutting back on staff over the years and COVID only accelerated this. It was getting progressively more and more difficult to speak to the right team at the bank. Always with a wait time on the phone of at least 20-30 minutes if not longer. But these last 2 weeks have gotten completely out of hand.
To be honest, it mirrors the COVID-19 times. It could be even worse. Since COVID, the banks have been reducing the number of phone lines in the UK, reducing the teams that us advisers can speak to, reducing the number of people available for clients to call via customer services. Reducing every service they once offered to help brokers really. Lots of banks don’t even allow us telephone access to mortgage underwriters anymore due to high call volumes and staff shortages.
For example. Last week I phoned Barclays and was on hold to speak to an underwriter about one of my cases for 3 hours and the next day it was 4 hours. Another lender Clydesdale’s wait time was 2 hours for one of our mortgage administrators, and another administrator was struggling with NatWest’s telephone line. It seems that they often cut the call off after an hour waiting and then you have to try again. Some lenders such as NatWest do also have a ‘live talk’ option, but this was also taking hours last week and didn’t seem like it was worth the wait.
Mortgage brokers across the country are now getting emails from the banks asking them not to call due to the call volumes being too high for them to manage. This morning we’ve had an email from Birmingham Midshires saying:
‘The current business volumes are driving significantly higher call volumes and so I write to you to urge you not to call our servicing teams. Please allow our service teams to progress cases and contact you where it is needed, so we can continue to deliver the service that you have come to expect from us.’
It’s not just the call times that are slower but their processing of applications also. To be honest, some lenders have struggled with their processing times for quite some time, taking 18 days just to start looking at documents, whereas other were taking only 2 days. However, it only seems like they have gotten worse and unfortunately more lenders are dropping further and further back with their processing times.
Simple assessments for rate changes that would usually be a 2-day job are now taking 5 days at least. As always, some banks are better than others, but there is definitely a significant shift in the wrong direction as of late.
Mortgage brokers are working harder than ever to deal with the incompetency of banks at the moment. I can speak for everyone in our office when I say that we are all working more hours than we normally do just to try and give our client’s the smoothest and best service we can, despite setbacks from lenders.
I know we keep talking about rates rising, but it looks like it is going to continue. Last week, they jumped by roughly 0.8% andwe have been told to expect rises of an additional 1.5% at least next week. That is a huge jump in just 2-3weeks. Accord mortgages have just emailed us to say that they are adding 1.58% to their rates. TSB emailed us saying buy-to-let rates are going up by 1.60% and residential rates are increasing by 1.20%. Metro bank went up by 1.50% this week.
So, that means that for clients that we were talking to last week and gathering their documents or deciding on preferences, this has completely changed what is possible and affordable for them. For one of our clients, their predicted monthly payment rose by £300pm over the weekend costing them an extra £18,000 over the 5-year mortgage period! We cannot stress this more – it is important to be organised and move swiftly in today’s market. The sooner the better for interest rates and cost efficiency. We recommend you look at remortgaging 6 months before your rate is due to expire
I honestly refuse to believe the sub-par service that lenders are currently providing is anything to do with ‘unprecedented demand’ – the service wasn’t great anyway for a lot of lenders, and it was always getting worse, now they have an excuse. Which is exactly what happened when COVID struck. In my opinion, the main issue is that the banks need more staff, for them to be better trained, more phone lines, and access to people that can progress applications. The issues they are having won’t be resolved until they address these key points.
We always want to be able to provide our clients with the best service possible, but it is becoming more and more difficult to provide the same quality when mortgage lenders are delaying everyone’s applications and are unavailable to speak to if anything needs to be clarified or resolved. Thankfully, we are experienced and well-established mortgage brokers so we have access to contacts and resources at the banks that others don’t so we can often get issues resolved a lot quicker than other people.”
If you or anyone else you know is looking for help with a mortgage and are struggling with the banks, give our team a call today to see how we can help.