Many lenders do offer an extension on a secured offer, but this does not necessarily lessen the workload for a broker or mean the extension is sufficient.
James Blackler, managing director of Oakstead Finance, said: “Rebroking and chasing extensions are now part of the job, not the exception.”
A client’s offer on a buy-to-let (BTL) purchase with a specialist lender expired after the 90-day validity period; Blackler said: “We had secured 5.95% just over three months earlier; the rate had moved to 6.45%.
“That is what happens when lenders reserve funds against a hedge: the price you were promised has a shelf life, and once the hedge is gone, the lender has no obligation to honour a rate it can no longer fund at that cost.”
Oakstead Finance “did everything we could to extend”, but Blackler ended up recommending a two-year tracker at 5.47% to avoid locking the borrower into a rate and leave room to refinance when pricing improves.
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Sonya Matharu-Coxill, founder of The Mortgage Atelier, said her concern was that if a “purchase drags on long enough for the mortgage offer to expire, the client could lose the rate they’ve secured and potentially face higher borrowing costs when they reapply”.
She added that her firm was “seeing more transactions delayed by property chains or hold-ups in the legal process”, which was “frustrating” for clients who had done everything asked of them.
Matharu-Coxill said that while this was out of an adviser’s control, advisers were doing a lot of work to keep things moving, such as monitoring expiry dates, speaking to lenders about extensions and looking at alternative options, so the mortgage was not another obstacle.
Samantha Lindsay, mortgage adviser at My Mortgage Angel, said a few more chains were breaking, “mainly because chains are taking longer to complete as clients are struggling to find affordable properties that they want to move to”.
Conversely, Aki Suthakar, mortgage and protection broker at Landmark Private Finance, said offer expiry was “less of a headache”, with purchases “thin on the ground” and remortgages completing when a current deal ended, rates were usually secured within the six-month offer window.
He said leasehold cases were an exception as “slow management companies and leases needing to be revisited can drag legal work on. I’ve had to extend or reapply offers, with the longest taking 11 months to complete”.
Ken James, mortgage and protection specialist at Contractor Mortgage Services, said securing a suitable rate early was not necessarily the end of the story, as cases needed to be revisited when lenders changed products.
However, “with rates generally moving upwards recently, we’ve had fewer opportunities to rebroke,” James said, but the responsibility to do review a case remained.
Down valuations becoming a ‘growing issue’
James added: “We’re also seeing property transactions fall through, although from what I’ve experienced, down valuations have been more of an issue than buyers simply changing their minds.
“When a property comes in below the agreed purchase price, it can mean going back to the drawing board, reassessing the figures and exploring what options are realistically available to the client.”
Suthakar said he had not seen many buyers pull out of transactions, likely because purchases were low, but agreed that down valuations were a “growing issue, with some properties coming in £25,000-50,000 below expectations”.
Keeping on top of product changes
Suthakar said the “real pressure” came from product changes, as lenders raised rates by a significant margin with only a day or two’s notice, which created urgency among remortgage clients, particularly those coming off 1-2% rates.
James said that as the market was subdued and transactions took long, frequent product changes did not mean longer working hours, but “in some respects, that has given us a little more breathing space”.
However, as a smaller firm, he raised concern over how advisers would cope if “things move in the other direction” and falling rates mean advisers “suddenly have a substantial back book of existing clients and mortgage offers to review, while still trying to keep new business moving”.
James said: “That could create a considerable amount of additional work in a relatively short space of time.”
He said many were not aware of the work that went into arranging a mortgage, which was just “one part of the job”, while managing it, keeping an eye on the market and protecting the client’s position throughout the process was another.
James added: “The challenge is that this workload can change very quickly. A quieter market might give advisers more breathing space today, but a sustained fall in rates could see that capacity disappear as we work through existing cases and try to secure better outcomes for clients.”
Lindsay has not seen many rate drops that benefit her clients but said the extra checks and reassurance that they had the best rate went “a long way while there is so much media hype about the higher rates”.
Matharu-Coxill said she always reviewed rate cuts to see if a better option was available, meaning revisiting an application or repeating work.
“Remortgages are a good example, as we might secure an offer six months before a client’s existing deal expires, then review their options again when their current lender opens its product transfer window,” she added.
Matharu-Coxill sometimes finds that staying with the lender is the better choice, which can mean “doing the work twice and occasionally earning less” to secure the best outcome. She said she has a responsibility to constantly review options and take stress away from clients, which can involve working longer hours, especially when lenders announce increases with “very little notice”, leaving brokers “working against the clock to secure the rate before it’s withdrawn”.
Matharu-Coxill said this made it difficult to plan the working day and sometimes meant working late or over the weekend.
She added that no adviser expected the job to be straightforward, but the work that went on behind the scenes was “the value of having a good adviser”.
The right lender support
Shuthakar said there was more engagement with business development managers (BDMs) and underwriters, with cases going to mutuals such as Accord and Coventry “whose underwriting is more flexible than the high street banks’, particularly for company directors and clients with multiple income sources”.
James said: “In my experience, getting meaningful input from BDMs isn’t always straightforward, and even when you do get through to someone, their ability to influence a case or help find a practical solution can be limited.
“When you’re trying to keep a complex case on track, that can be frustrating and adds to the time involved.”
