'Mortgage lenders do not want our business'

'Mortgage lenders do not want our business'

Mortgage lenders cannot cope with the volume of business coming their way amid rising interest rates, advisers and brokers have claimed.

Speaking to editor Simoney Kyriakou, on the latest FTAdviser Podcast, Jane King, chartered adviser for Ash Ridge Financial Services, said lenders had told her they were "swamped".

She said this was partly due to the difficulties of navigating hybrid working but also because of having to cope with ever-changing base rate rises.

King said: "They're telling me they don't want a lot of business right now. I talk to lenders and their business development managers. 

"Turnaround times right now are an utter shambles. When they get to the top of the buy lists they panic because they're swamped so they pull their rates - usually at short notice - to get to 6th or 7th place."

King said this meant she was often "up til midnight" trying to get applications through.

"I've got banks telling me if I submit an application for a first assessment for a borrower it will take four weeks. Four weeks.

"It used to be 48 hours."

At least four lenders have temporarily stopped processing new mortgage applications, citing “intense backlogs” as service levels are stretched further by a rapidly changing interest rate environment.

Fellow panellist Almas Uddin, founder of Revolution Brokers, said: "We need the market to be creative. That's the main thing.

"But the market is still uncertain. Nobody wants to change their stress tests and be more aggressive or give more money out there."

But Rachel Springall, financial expert from MoneyFacts, who was also participating in the debate, said being creative meant lenders had to think more widely. 

She said the data was showing that mortgage lenders are also being much quicker in terms of ending certain products or changing the rates.

She said: "We are seeing a short shelf life on products at the moment. This may be a case of repricing on interest rates or withdrawals but this could also mean incentives. 

"For example, you could be getting cash back incentives or legal fees and free valuations. This is a good all-round package, for a borrower so there could be different ways that a lender could entice business. 

"If we have to get used to higher interest rates, then there will have to be other ways that lenders can push their deals."

But, ultimately, she said the problem was the lack of available properties, with not enough housebuilding happening in the UK.

Also on the podcast, FTAdviser intern Sophia Massam provided a short report on the state of the UK mortgage market after the latest base rate rise.