David Sheppard, managing director of Perception Finance, said that service levels had got worse “with a lot of lenders” during April and May, which he said may be down to the amount of holiday that gets taken during this period as people look to take advantage of bank holidays.
He continued: “This directly impacts service and then there is the catch up period thereafter which does take a few weeks to happen. I have seen most lenders now get back to normality and offers will speed up due to the downturn in purchase applications while the World Cup is on as happens every time.”
He suggested Metro Bank and Barclays were lagging behind their competitors.
Sheppard noted both lenders were ahead of the pack in looking at income as well as rent on buy-to-let cases, which may have played a part in service issues. He added: “They are also quite good on lending affordability figures on resi too so that will be a contributory factor.”
A spokesperson for Metro Bank said: “We closely monitor our service levels and are always looking at ways to further improve our customers’ experience.
“Our SLA is currently 48 hours, and in some fully-packaged cases, we’ve able to turn around applications within 24 hours.”
A spokesperson for Barclays said they were sorry to hear of brokers who were not happy with the lender’s service and encouraged them to speak to their local BDM on the matter.
Lenders should adjust when they are struggling
Andrew Montlake, director of Coreco, said that a few lenders had “let service drift recently” and questioned whether this may be down to a mismatch between the competitive rates on offer and the number of staff available to deal with incoming cases.
He continued: “It always perplexes me why some lenders are reticent to increase their rates when they have such backlogs as this seems to be a sensible way of slowing down the numbers of applications to deal with the backlog. Anyone taking more than seven days to look at a document sent in should really be analysing where they are going wrong.”
Montlake also argued that frustrating issues, such as policies around offer extensions, would be entirely avoidable if lenders employed more common sense.
He said: “For some reason it does seem a little more difficult to get cases through some lenders at the moment and the phrase ‘pushing water uphill’ springs to mind.”
Why do product transfers take so long?
Rachel Lummis, mortgage adviser at Xpress Mortgages, said that one area where service levels clearly need improvement is on product transfers, noting that on a number of occasions the transfer has only taken place a week or two after the existing deal ends, even if the application has been submitted months in advance.
She added: “Clients get quite distressed that they go on to the standard variable rate, whether for a few days or up to a month, and while the lenders do back date it so the client is not out of pocket the situation is not ideal.”
Small and nimble
James Mole, independent financial adviser at Gingko Independent, praised smaller lenders for their service levels, particularly Tipton & Coseley Building Society.
He explained: “You never have to wait on the phone and you can actually speak to someone who is dealing with the case. It’s refreshing. I’m a fan of Skipton too – although they are a fair bit bigger than the Tipton. If you want to speak to the underwriter, you can. It’s a nice touch.”
Lessons to learn from Halifax
Greg Cunnington, director of lender relationships and new homes at Alexander Hall, said there were some service issues with lenders “which are causing frustration”.
He praised Halifax for maintaining consistent service levels and timescales, despite being one of the highest volume lenders, noting that this was the case no matter the complexity of the case or loan amount.
He continued: “For a lender that actively seeks to take market share from the first time buyer and new build market, meaning they get a lot of purchase applications, the consistency of their service timescales is seen as key to advisers.”
Sheppard agreed that Halifax were delivering for brokers.
He said: “There are some lenders that maintain good service levels at all times with Halifax being the best. The ability to send documents and then call through to get them looked at straight away sets them apart and that did not falter during the previous two months.”
Adopting a regional approach can help
Cunnington also welcomed moves by some lenders to set up region-specific teams in order to maintain service levels.
He explained: “We have seen some lenders, such as Santander and Precise, set up specific London-based teams which takes into consideration the urgency often seen with purchase transactions in the London market and this has been a huge plus.”