Lenders are putting too much effort into improving their remortgaging processes which is having a detrimental effect on straight mortgage business, according to MyHomeMove Conveyancing.
The conveyancing firm has questioned the logic of encouraging borrower promiscuity through streamlining the remortgage process, when they could save themselves money by trying to make borrowers stay with them by offering value-added services.
The claim follows research conducted by MyHomeMove among lenders to determine conveyancing strategies.
It found that 16 out of 17 lenders said they offer free conveyancing and/or cashback contributions as part of their remortgage deal, and 12 out the 16 said they offered free conveyancing. However, only two lenders in the survey currently get involved with conveyancing for mortgages ‘ and even this was on a small scale.
David Harbour, sales director of MyHomeMove Conveyancing, said: ‘Understandably lenders are cautious about becoming involved in the conveyancing process for mortgages ‘ history has taught them that things can and do go wrong.
‘But, if the sheer volume of applications, driven by market conditions, means delays in mortgage approvals ‘ shouldn’t the focus be on finding ways to speed up the whole process? Perhaps lenders should rethink their strategy in this respect and, rather than focus on adding value purely on remortgage business, provide a service which will bring a level of certainty to the mortgage process.’
However, Matthew Cape, public relations and corporate affairs controller at Chelsea Building Society, disagreed that this is detrimental to purchase business.
‘We seek to support both purchase and remortgage business by undertaking the standard legal work associated with remortgage business without cost to the borrower, and offering £200 towards the cost of legal fees for purchasers who choose their own solicitor.’