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Specialist BTL lenders lack speed, say brokers

Specialist BTL lenders lack speed, say brokers

UK brokers have praised specialist buy-to-let lenders for their “flexible” mortgage applications, but said the speed at which they process them is still lacking compared to high street lenders.

Whilst complex buy-to-let lenders were rated 96 per cent for their flexibility by brokers, compared to 87 per cent for high street lenders, they ranked just 29 per cent for their speed, compared to their larger counterparts which bagged almost double the rating at 55 per cent.

The findings, published by Smart Money People this month and representing 597 brokers, highlight the technology gap facing specialist buy-to-let lenders.

“Complex buy-to-let lenders still have room for improvement in their backend processes,” said Jacqueline Dewey, Smart Money People’s chief executive.

Brokers told FTAdviser the slower backends were the “flipside” to greater flexibility.

“It’s almost part of the job description for a complex buy-to-let lender to be able to apply flexibility as they will regularly be coming up against cases that won’t neatly tick all the boxes,” said David Hollingworth, an associate director at L&C Mortgages.

“However, the almost inevitable flip side to that is that there’s often likely to be more questions that need answering and the more complex the cases the longer they can take to process.”

On balance, Hollingworth favours the specialist lenders’ “range of choice to suit a wide customer profile” over the “more defined approach” taken by mainstream lenders which “can result in efficiency at high volume”.

But not every broker agrees. Aaron Strutt, product and communications director at Trinity Financial, told FTAdviser: “Our brokers prefer to use the bigger lenders which don’t keep coming back with questions.”

Ultimately, Strutt said brokers just want applications to go through as quickly and easily as possible. 

“Bigger lenders rely on online systems to produce fast mortgage options for less risky clients - so those with more equity, low loan-to-value, and good credit score. Here, the computer is valuing the property.

“If you ask our brokers who got a fast buy-to-let offer via Barclays, and a day later the mortgage offer is issued - they’ll say that’s the fastest, most efficient process.”

Some argue onus lies on the broker, as well as the lender, to make this process efficient. Dominik Lipnicki, director at Your Mortgage Decisions, said brokers "are often stuck in the middle, hence managing the client's expectations in terms of any potential delays and complications is key here."

Lipnicki continued: "Brokers can also help here, ensuring that cases are submitted to the lender only once they are 100 per cent complete."

How long a lender takes to produce a mortgage application also depends on their service standards and individual risk departments, as well as their technology. 

“More borrowers are opening up their conversations with us with ‘it’s complicated’,” said Strutt. “There’s not as much straightforward stuff out there as there used to be.” 

As a result, Strutt thinks high street lenders have over time developed their criteria to suit this new landscape.