Having spent a decade in the Swedish market, Torpey said that the UK has a homebuying journey fettered by paperwork which could be vastly improved by taking the Swedish example in digitising and centralising data.
Swedish lenders have immediate online access to the relevant data to approve a mortgage – ranging from the property register and income information to defaults and marital status.
The consistency and accessibility of consumer information means a borrower can have a loan approved in minutes online – something that Torpey said the UK is lacking.
Torpey said: “In the UK, you’re asked to provide three month’s bank statements, or if you’re self-employed you’ll need two years’ worth of accounts and credit card statements – you’re asked for a multitude of paperwork.
“In Sweden, you’re not asked for anything. If I know your national insurance number, I can go online and check your salary for the last two years.
“It’s super data rich, so it makes the underwriting process really efficient, and there’s much less information needed from the consumer because the lender is in a much more knowledgeable position.”
Indeed, the homebuying process is so efficient in Sweden that intermediation is “almost non-existent” – with brokers responsible for only about one per cent of cases.
But Torpey stressed that the large number of lenders, products, and complexity in the UK mortgage market means digitisation could only enhance, and not eradicate brokers as some might fear.
Madness
Torpey also argued that the UK is burdened with an inefficient conveyancing industry and an increasingly complex regulatory landscape.
“Fundamentally it’s a very inefficient market. Every time you buy a property in the UK, it gets more and more complicated.
“The solicitors are saying you need this certification around your window, your doors, or electrical installation.
“But nine times out of ten the buyer or seller doesn’t really care whether you put an extra socket in your bathroom. The solicitors would say they’re protecting the lenders and the buyer of the property, but to me it has become grossly inefficient.”
To change, Torpey said mainstream lenders need to push for more efficiency and regulatory simplicity.
For instance, most of the conveyancing in Sweden – such as certification and warranties – is completed by the seller and lender before a property is put on the market.
As such, if a buyer makes an offer on a property, they then sign a legally binding document and place a 10% deposit by the end of the day.
“In the UK you can walk into an estate agent and put a house on the market tomorrow. In Sweden, there’s a much more rigorous process.”
With initiatives such as Open Banking and Land Registry’s digitisation effort, Torpey said the UK is beginning to head in the right direction, but these issues still need attention.
“Is it getting simpler? The answer is no, it’s getting more and more complex every time you buy and sell a property in the UK, which to me is madness in the current age.”
