MortgagesJul 8 2014

Mortgage woes post-MMR: 85% advisers cite delays

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UK advisers have claimed it is harder for their clients - many of whom have good credit history and enough deposit money - to get onto the housing ladder since the Mortgage Market Review.

According to Chris Little, managing director of BEP Financial Systems which conducted the research, “hundreds” of mortgage brokers and IFAs have claimed their lives have “got much harder” since the MMR was introduced on 26th April.

Although initial troubles were expected as the FCA’s new rules on mortgage lending bedded down, research from the lending consultancy showed that 85 per cent of advisers have been finding it “longer and more difficult to get a mortgage case through”.

Mr Little added: “This has been clearly reflected in recent statistics from both the Council of Mortgage lenders and the Bank of England showing a continuous drop in mortgage approvals.

“While the mortgage application process will inevitably continue to take longer than it did before the MMR, it should start to get easier as everybody becomes more familiar with what is required of them and it will be interesting to see if the results of our survey in three months’ time show this to be a reality.”

Some advisers surveyed commented that “lenders are taking forever to look at cases”, while many spoke of big delays with no flexibility. Some reported that lenders’ staff were unfamiliar with the new procedures and were no longer underwriting, just following procedures.

Some 78 per cent of respondents also said that lenders’ affordability rules differed either slightly or significantly.

One said that “affordability seems to be a haphazard practice with different lenders having completely different rules”.

According to the research, 66 per cent of advisers said that it now took them over an hour to conduct an initial mortgage interview, double the 33 per cent who said that it took over an hour before the MMR, with some saying that it now took three hours to conduct the initial mortgage interview.

An additional 25 per cent of advisers and brokers cited the MMR as having a “substantial impact” on their business, as lenders do not keep them adequately informed and 57 per cent have not provided them with enough information on regulation and best practice.