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Coventry BS to temporarily close new business range from today

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  • 04/08/2022
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Coventry BS to temporarily close new business range from today
Coventry Building Society will temporarily close its new business range from 8pm today, due to increased application volumes in light of the base rate increase putting pressure on service levels.

The lender said in a note to brokers it had been running a “disrupted service” this week, as heightened application volumes ahead of the anticipated base rate change today impacted its service levels.

The Bank of England increased the base rate by 0.5 per cent to 1.75 per cent earlier today, the sixth consecutive increase from a historic low of 0.1 per cent.

The mutual said it would close new business products so it could “fulfill and prioritise existing applications”.

The lender added that this closure would not affect applications currently in progress and it would keep product transfer and further advance products available.

The mutual apologised for only giving a day’s notice due to the “unique circumstances”.

It continued that it was working hard to manage its backlog and would try to complete existing applications as soon as possible.

Coventry Building Society said it would bring back its new business products next week.

The mutual added that an agreement in principle (AIP) did not secure a closing product and if an AIP refers, the mutual is unable to review it before the product closes.

Coventry Building Society said that in the case where an AIP does refer, the broker should copy the case and click through to the full mortgage application to secure the product, but applications received after 8pm today would not be accepted.

Coventry Building Society is the second largest-building society in the UK, according to the Building Societies Association.

Its gross mortgage lending the first half of the year came to £3.8bn, down from £5.4bn in the same period last year.

Its mortgage balances stayed stable at £46.6bn and its profit before tax rose to £158m. This is up from £124m in the same period last year.

It is the latest lender who has had to briefly close for new business, with Cambridge Building Society temporarily withdrawing residential and buy-to-let product for new business earlier this week.

Hodge also shortly stopped for new business across all mortgage ranges in June due to high business volumes and to maintain service levels.

It recently re-entered the residential mortgage market, offering 50 plus residential, retirement interest-only (RIO) and holiday let mortgages.

According to reports this week the mutual also suffered an internal technical issue on Monday, which impacted its online services and restricted access to systems for its call centre and branches.

In a tweet the mutual said yesterday that systems were up and running but said that some members were still struggling to get through.

Jonathan Stinton, Coventry Building Society’s head of intermediary relationships, said: “In a move to protect service levels we’ve taken a decision to close our new business product range which should return next week. Product transfer and further advance products will continue to be available.

“Of course, this won’t affect any applications that brokers currently have in progress with us. If brokers can get their applications over to us by 8pm tonight, we will process them. But an AIP does not secure a closing product. If an AIP refers, we won’t be able to review it before the product is closed.”

He added: “Thanks to everyone for their understanding. We are sorry that we are only able to give one day’s notice due to these unique circumstances.”

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