Sourcing platform Twenty7Tec said five of the 10 busiest ever days for mortgage searches took place in March reflecting the recent surge in demand.
Last month was also the highest ever monthly total for mortgage searches, surpassing the stamp duty rush in 2021, according to the platform.
Buyers are rushing to secure mortgage rates before expected rises, anecdotal sources suggest.
Eleanor Williams from financial research firm Moneyfacts said there has been a “busy period of re-pricing as lenders have reacted to three back-to-back base rate rises and continued wider economic volatility”.
But the surge in activity is taking its toll on lenders, advisers report.
Craig Parkinson, partner at adviser firm Continuum, said: “In 18 years this is the worst I have ever known lenders be at the moment – usually one or two have a wobbly few months but this seems to be across the board at the moment.
“Timescales, underwriting and updates to name are but a few things seriously lacking.”
Greg Cunnington, chief operating office at LDN Finance, said he empathised with lenders “as they are being inundated with applications”
He added: “We have met some of the larger lenders recently who have reported that on days of rates changing the volumes of applications received is five times their daily targets, which naturally can then have an impact on service levels.”
Service is getting dire
Jane King, mortgage and equity release adviser, said an example of “shabby service” is lenders taking 12 working days to assess an application.
She added that lender staff still working from home is part of the issue: “When I try to speak to someone at some of the lenders I can hear toddlers screaming in the background, dogs barking, and have been put on hold while they answer the front door. All the time this goes on standards will remain a total shambles.
“There are one or two exceptions but on the whole it’s dire out there.”
Ian Hewett, founder of The Bearded Mortgage Broker, also reported a “total lack of service levels” at the moment with “lenders leaving you on hold daily for an hour at a time”. He also bemoaned lengthy queues on live chats “that you know probably won’t answer your question” and urged lenders to improve processes.
Mark Dyason, owner of Edinburgh Mortgage Advice, agreed the pandemic and its aftermath “have shone a light onto the creaky parts of the mortgage process” and that lenders need to pull it together.
He added: “Currently, we have a top five lender unable to respond to a new application in the first 12 working days, another lender whose service level agreement (SLA) for sending an email is five days, and a third whose SLA for loading the offer to the legal system is eight working days.
“We need the industry as a whole to invest in the technology that makes any manual turnarounds a thing of the past. The legacy systems need replacing and a new wave of innovation brought in.”
UK Finance said they were not aware of an increase in complaints around service levels.
The majority of big lenders contacted by Mortgage Solutions either said they could not comment, or that service levels were not an issue at the moment.
A Santander spokesperson said: “We continue to work hard to ensure we offer the best service for our mortgage partners and their customers, but high demand for housing and remortgages during recent weeks have meant we are slightly outside our usual servicing timescales.
“We will look to improve our position over the coming weeks, and we update our service position on our website on a daily basis.”