Several lenders have reported increased remortgage activity in recent months as homeowners on variable rates have moved to the safety of a fixed rate.
But more remortgaging means greater competition between lenders on price, and this has led to mortgages increasingly being sold with free legal services thrown in.
These may be popular and free legals are a great idea in principle, but the increased volume is putting pressure on the people doing the paperwork to move faster and faster, be it lawyers, lenders or valuers.
In a nutshell, time is money in our industry and therefore the mortgage approval process needs to be faster.
Agility is key
While homebuyers often have months to wait before a property moves to completion, remortgaging requires agility. The longer a deal takes to go through, the longer a borrower can be paying a higher variable mortgage rate.
We have been aware of this pressure for some time, and it’s why we’ve developed our Risk Hub to help valuers with faster decisions based on data and technology.
But the industry needs other tools to achieve greater speed during the mortgage approvals process.
One is that we need more streamlined, factory-style legal services to handle remortgaging, rather than relying so heavily on the thousands of family conveyancers who currently handle much of the volume.
It’s a tough thing to say, but for the industry to achieve the efficiencies needed to make lending faster and more cost effective, combining valuation, conveyancing and lending together into one lean machine is the future.