Mortgage intermediaries believe overwhelmingly that lenders’ service standards have dropped over the last year, with slow turnaround being the main culprit.
Nearly two-thirds (61%) of intermediaries replied ‘yes’ when asked if standards had dropped, while responding to Future Mortgages’ Future 500 survey.
Just over one-third (35%) had thought service either remained the same or improved.
Brian Pitt, sales and marketing director at Future Mortgages, said: ‘Intermediaries are clearly saying lenders’ drive for market share is at any cost with service suffering as a result. Service, as highlighted in the September Future 500 survey is more important than headline rates, and this should not be forgotten.’
Over half of respondents said slow turnaround was their greatest service standard problem, followed by 34% who claimed they found it difficult to speak to the right person. Only 10% complained of accuracy problems.
Steve Smith, operations director at Hamptons International Mortgages, believes the finger should not only be pointed at the lenders and that intermediaries could also play a part.
‘It has been a busy year, but lenders’ criteria have reduced. There is a lot more self-cert business about and lenders do not ask for as much information and documentation as they did previously. So you would think turnaround times would be quicker. Brokers need to look at themselves ‘ if you are filling in documentation correctly, at the early stages, then it saves everyone time and the process will be quicker,’ he said.
On a brighter note, the research also highlighted the average level of increases in professional indemnity (PI) insurance has not been as high as many feared them to be. When asked how much the cost of PI insurance was to change as a percentage of last year’s premium, 24% said less than 5% and 30% expected to pay rises of less than 10%.
Pitt said: ‘The impact should be kept at a minimal level. However, brokers will have to find this extra money somewhere and if transactions drop as the housing market slows this could be increasingly demanding.’
He pointed out the survey also revealed that 16% anticipate that their PI insurance will rise by more than 40%.
‘How they plan to factor this into their business plans and profit margins remains to be seen. Perhaps this will be the final straw for many of them to leave the industry,’ he said.
The survey also revealed a third of brokers thought the Financial Services Authority (FSA) will do a worse job than the Mortgage Code Compliance Board, with 55% saying it would do no better.
However, the FSA said: ‘We do not comment on individual surveys. We are only proposing to take on what the Treasury has asked us to in 2004.’