MortgagesOct 2 2017

Major lenders shun paperless mortgage revolution

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Major lenders shun paperless mortgage revolution

Major high street lenders have failed to commit to offering paperless mortgages despite NatWest’s recent decision to provide digital-only loans.

The introduction of the paperless mortgage has been hotly anticipated as more and more consumers – particularly the tech-savvy younger generation – increasingly look to carry out their transactions online.

Paperless bank accounts are now commonplace, allowing people to receive statements online or via a mobile app instantly, and digital-only mortgages promise to speed up the process of getting a home loan significantly.

NatWest, which claimed to be the first lender to offer a paperless mortgage on 19 September, said it could cut the time it takes for a customer to receive an offer by up to 10 days.

But despite the obvious advantages of the paperless process, other major high street lenders are not planning to follow suit immediately – although many already offer a process that is partly digital.

A spokesperson for Yorkshire Building Society said: “We have no current plans to offer a paperless mortgage, however we constantly look to develop our mortgage application process as technology advances to enhance our customer experience.”

A Virgin Money spokesperson added: “Paperless mortgages are in our thinking but we have no immediate plans. 

“Of course, intermediaries can already submit an end-to-end decision in principle and full application through Virgin Money’s online system, and provide supporting documentation electronically as part of our existing application process.”

Jaedon Green, director of products and distribution at Leeds Building Society, said the lender was committed to innovation and the development of its processes.

Halifax has provided the option for customers to upload mortgage documents since 2016 and introduced online product transfers through intermediaries in June 2017.

A spokeswoman for Halifax said: “As part of our ongoing commitment to the market, we are constantly working to enhance the ways in which our customers can interact with us, and will be introducing further options in the coming months.”

HSBC is continuing to work to digitise its process.

A spokesperson said: “The introduction of the new Omiga broker platform, which is going live shortly, will bring about significant improvements and will be predominantly paperless.”

The Co-op Bank has no plans to offer paperless mortgages. Barclays was unable to comment on their plans.

Martin Stewart, director at London Money, suggested the introduction of paperless mortgages should not necessarily be a priority for lenders.

He said: “The client will think ‘oh great, no paper – but have they agreed the mortgage or not?’

"The client is borrowing money because they are emotionally attached to the idea of buying a house and all the warmth and positvity the feeling of home ownership brings.

"If I said to them that they would have to fill out a 50-page paper application to improve their chances, they would do it – they might not like it – but they would do it.

“We tend not to document such things as paperless transaction as a reason for recommending a lender. No, we focus on whether we can get the money and at what competitive price. Anecdotally, we find that most clients don’t read a word of what we send them, so it matters not how the information is conveyed.

“I’d prefer lenders to focus their resource on the things that matter right now – innovative lending solutions – rather than patting themselves on the back for reducing their postage costs.”

Oliver Marley, mortgage adviser and head of research at London-based Independent James, said: “NatWest would find they would be much busier as a result and then therefore not be as quick in reality – this is always an effect of having a great offering. 

“My thoughts on this are that it will have little effect on NatWest’s pipeline – customers and advisers are well prepared for applications, especially remortgages, and are submitting application up to six months in advance to ensure everything is in place to make a seamless transition from one lender to another. 

“The rush is no longer there to be honest - we’re all planning a little bit better to ensure we’re getting the best value.”

simon.allin@ft.com