Threats of violence, swearing, name calling and intimidation tactics are some of the experiences property solicitors have endured since lockdown restrictions were lifted and house sales rocketed. Conveyancers say the behaviour highlights the need for change in the homebuying process and are calling for support from the industry.

All professionals in the property buying process have reported unprecedented levels of activity due to a combination of pent up demand, the stamp duty holiday and a desire to move to a larger home after lockdown.

But conveyancers say, as the last link in the property chain, they are forced to bear the brunt of client frustrations and abuse as they attempt to fulfil their legal responsibilities. Not understanding or respecting the role of conveyancing in the homebuying process, say solicitors, leads to unacceptable client behaviour which mortgage brokers and estate agents could help to relieve.

Heightened abuse

A shocking message posted on the professional networking site Linkedin laid bare the scale of the problem.

It read: “Fat c***, w****r, bunch of sh**s.

“This is language that has been levelled at conveyancers by clients in recent weeks – unacceptable isn’t it? We all know that moving house is stressful and that the SDLT deadlines have made everything worse. But clients must take responsibility for their actions.”

Author of the post, Lorraine Richardson, property solicitor at Adapt Law, said she had been compelled to write the message and host a talk on her YouTube channel, Conveyancing Matters, due to the heightened levels of abuse directed at her profession.

“The stress conveyancers have been under in the last 12 to 18 months is extraordinary,” she told Mortgage Solutions.

“Coal face conveyancers have been subject to a fair sense of rudeness from stressed clients for a long time, but the stamp duty holiday has massively exacerbated the situation.

“There’s not a great deal of respect for what we do. Some conveyancing has become commoditised which doesn’t help. It’s seen as a box ticking exercise. But the client also thinks they own you because they’ve paid a fee.

“Conveyancers are also the ones who have to give bad news, such as sorry you can’t move forward with the purchase because there’s a problem with the title.”

Having to repeat actions such as producing identification and bank statements when they have already submitted these documents to a broker and a lender also incites anger, Richardson added.

Stuart Forsdike, partner at PCS Legal, said his firm has been subject to various threats over the last 18 months which he has put down to the pressure buyers were under to complete purchases ahead of the 30 June stamp duty deadline.

“We had someone leave a voicemail to say they were going to drive to the office and run over the case handler,” said Forsdike. “In the last two months alone we’ve had people threatening to come to the office with a gun and another with a knife.”

Forsdike said while aggressive clients account for a small proportion of instructions, the level of frustration felt by homebuyers which occasionally leads to abuse “demonstrates the radical need for change in the conveyancing process,”.

He would like to see bodies such as the Law Society and Solicitors Regulation Authority produce literature for borrowers explaining how conveyancing works and how long it takes.

Encouraging clients to provide information pre-offer would also help to speed up the transaction, he added.

Broker support

Estate agents and mortgage brokers could play their part by managing expectations and prepping their clients about the documents they will need to provide again to their solicitor even though they have already shown them to a broker and lender said Richardson. Sharing information with solicitors would also help to speed up the transaction, she added.

“Brokers will know if the borrower is receiving a gifted deposit from their parents but lenders rarely indicate on the offer that the source of the deposit is gifted,” she said. “When we find out, we have a responsibility to do ID checks on the parents and then disclose it to the lender even though they know, because it’s not referenced on the offer. If the broker told us on day one, at least we could do these checks straight away instead of finding out three weeks later.”

The Home Buying and Selling Group has begun work to tackle abuse and speed up the homebuying process.

The Association of Mortgage Intermediaries, part of the group, has been involved in the programme. Chief executive Robert Sinclair said the Department for Levelling Up, Housing and Communities was keen to work with the industry to simplify and speed up homebuying. The development of a cross-industry code of conduct to stamp out abuse is also underway.

“The property buying process causes some people to behave irrationally which can lead to unacceptable behaviour towards conveyancers,” said Sinclair. “The industry is aware of this issue and is proactively trying to find solutions.

“We’re doing a lot of work as part of the Home Buying and Selling Group to combat this behaviour. For example, we hope there will soon be communications coming out talking about how vendors need to be sale-ready.

“Could brokers do more to ease this abuse? Absolutely. Some do this really well, but some could do this better. Brokers should tell borrowers to start the legal process early and spend a little money investing in a solicitor who can start looking into any title issues on the property to reduce delays.

“The abuse often comes because the conveyancer has to tell the buyer there are defects on the title discovered much further down the line.”

October is the biggest month of 2021 for remortgage maturities, with £38.9bn of business up for renewal according to research company CACI.

But January will exceed that, with £39.6bn of remortgage business expected to mature with 2022 forecast to be “one of the biggest product cessation years for a long time”.

Brokers are being warned to make sure their client contact strategies are in full swing so they do not lose out to mortgage lenders that contact their borrowers up to six months ahead of the product term ending.

Analysis of Financial Conduct Authority data last year found that mortgage brokers lose 60 per cent of their clients to direct lender channels when they remortgage.

Alex Beavis, mortgage and later life lending propositions director, Sesame Bankhall Group, said: “After over a year of managing through a purchase boom, the next four months present a significant refinancing opportunity for advisers.

“As the legacy of Covid endures, many clients will find their circumstances significantly altered by the pandemic – increasing the need for advice. Work the back book early and look beyond product transfers where circumstances allow. There are some excellent low loan to value remortgage rates and many clients may want further funding for home improvements and renovations. A good client contact strategy in the run up to maturity is key.”

Martin Reynolds, chief executive, SimplyBiz Mortgages, said: “2022 is one of the biggest product cessation years for a long time, with January being one of the biggest months of the year.

“We are now in October so have all those customers who can move in January been contacted by their broker?

“We know that lenders have a duty to contact the customers, but we need to ensure that when that letter arrives the first thing they do is call their broker. We have all seen the statistics around customer retention at the end of a product term and we can improve on this. The number of technology support solutions now around to help means this level of remortgage business is a positive, perfect storm to make 2022 the best year yet for the intermediary market.”

Mortgage expert Tom Brennan decided to start his own business in May 2018 and was later joined by his former colleague Chris Blackwell, now a company director. The pair decided to start the business from home, offering free, independent and impartial advice to suit each client’s individual needs.

Unlike many other businesses, the pandemic has meant a huge surge in activity for Brennan and Blackwell who have now been joined in the business by two other advisers, also working remotely.

Tom Brennan (pictured) said: “At the start of the pandemic, like many other business owners, we were uncertain how the unprecedented situation would impact our business. However, what we’ve seen is an uplift in demand, partly because this life-changing period of time has prompted people to make different life choices around working from home, where they live and what they want from their lives.”

Ted Mortgages has now reached more than 200 reviews on Google.

Chris Blackwell said: “We are over the moon to have reached this milestone. When we started we were excited to get our first review and ever since then have been determined to keep on doing the best we can for our clients. To have surpassed 200 reviews on Google in less than two years is beyond what we could have expected.”

Brennan added: “The key thing for the Ted team is to ask clients to provide us with a Google review and to send them a relevant link to do it when following up – sounds simple but it is effective and feeds into their after care process. If you know your team are doing a good job and achieving the right result for those seeking the right mortgage for them and their particular circumstances, then this is an effective marketing tool. You have to be confident in your business ethics as a review, by its nature, should be based on real experience.”

In his role he will manage and grow Coreco’s team of brokers in its London and Southend offices and across the country.

This will include technical assistance to brokers, helping new joiners and fostering lender relationships.

Morrey has worked at John Charcol since 2002. He is currently product technical manager and head of the specialist mortgage technical service team.

He supported advisers across its three locations and worked with lenders on policies, criteria, products and approval processes. He also wrote technical guides and blogs for the broker.

Coreco’s managing director Andrew Montlake said that Morrey had had a broad range of experience and was well-respected by lenders and the industry.

He said: “He will be an invaluable help to all our brokers, both new and experienced, as well as to me personally. This will allow me to push forward with our overall strategy and exciting plans we have in store for Coreco.

“We already have a highly respected brand and our Coreco family is packed full of great talent, but we want to cement ourselves as the top brokerage that talented individuals of all backgrounds aspire to work for.”

He added that there would be further announcements in the future as it completed structural changes.

Morrey said: “I am very excited to be joining Monty and the rest of the Coreco team, some of whom I have known for years. Coreco are a terrific company with a great reputation. They have mortgages and customer service at the heart of their DNA, and I am very much looking forward to being a part of the projects to come.”

However, technology for technology’s sake can be a problem as well. Some networks can sell potential AR firms a system which on the surface looks like it has all the bells and whistles, but in reality offers very little. ARs must be fully aware of this when weighing up any network decision.

This should all be about the tangible benefits – not the parts of a system which are never going to deliver anything for the adviser or firm, but those that provide real efficiencies, that make the adviser’s job easier, and add up to provide the saving of resource cost and deliver additional income.

From my point of view, that focus should essentially all be about adviser productivity. How much more efficient can an upgrade to our system make you? What about a new portal? Where is the time-saving in using sourcing system A and its elements over sourcing system B?

At its core level, how many more cases can you do as a result of using the technology we provide to you? Years ago, without the quality of the technology advisers have at their disposal now, carrying out a handful of cases a week made you an efficient adviser.

But that’s not the case now and nor should it be. So, we are trying to develop the technology we offer AR firms to provide continual marginal gains.

A customer-facing portal that allows the customer to check on the status of the case, we believe saves one of our AR advisers at least one hour a day, primarily because they’re not having to field calls and emails from that client asking them for an update. They can see it right in front of them on the portal.

ID verification also used to be a highly labour-intensive part of an adviser’s case work as did re-keying data and information which has often been described as the bane of most advisers’ lives. Especially when it comes to producing multiple DIPs. But thanks to developments in technology, advisers can now save on average 15-20 minutes of re-keying time.

Add that up across the large number of cases most advisers will be working on, and you can clearly see the time-benefit for advisers in having access to this technology and using all that it offers. Provide further functionality like criteria and affordability hubs, where advisers can quickly get to the products that meet their client’s requirements and swerve lenders with poor service levels, and you’re saving both time for you and the client.

Not forgetting there’s the systems and tech functions that are available for protection, general insurance or conveyancing work, which again will all shave much-needed time off what was previously required to complete it.

These are the benchmarks AR firms and their advisers should be using when looking at the network technology offering. What efficiencies can it deliver and what time and cost can it save? Choose on this basis and you won’t go far wrong.

Average annual case volumes rose from 89 in quarter one to 95 in Q2, marking the most borrower applications ever processed by brokers replying to the Intermediary Mortgage Lenders Association (IMLA) quarterly survey.

Between April and June, 67 per cent of cases handled by advisers were for residential mortgages, 26 per cent related to buy-to-let borrowers and seven per cent were specialist deals. The mix of cases remain similar to the previous quarter. Advisers did experience a quarterly rise in the proportion of first-time buyer cases they handled rising from 20 per cent to 23 per cent which IMLA said could reflect the growing availability of low deposit mortgage products.

The average number of Decision in Principles (DIPS) processed by intermediaries reached a two-year high in Q2, increasing from 28 to 31.

The conversion rate from DIP to completion was stable quarter-on-quarter at 43 per cent in both Q1 and Q2.

The conversion rate from offer to completion also reached its highest level since the start of the pandemic reaching 77 per cent. Application to completion conversion rates also edged up to 67 per cent in Q2 2021, compared to 64 per cent in Q1 2021. Roughly two-thirds of applications resulted in a completion in Q2, a slight increase on the previous quarter.

Kate Davies (pictured), executive director of IMLA, said: “The positive findings of our latest report clearly reflect the strong recovery seen by the housing and mortgage markets in 2021.

“This buoyancy has driven activity and helped to provide confidence to consumers and the intermediary community. As a result, we have seen advisers’ confidence levels and average business volumes increasing to some of the highest recorded.

“Of course, we may see a softening in purchase activity in the second half of 2021 in line with slowing government support, but advisers should feel spurred by the sizeable refinance market at play and a growing reliance on mortgage advice among those who have seen their financial circumstances complicated by the pandemic.”

Families placed in a financial squeeze over the last 18 months have been forced to make tough choices between paying the mortgage or rent over other household bills.

The result, say brokers, is a rising number of households falling outside mainstream mortgage criteria forced to reassess their borrowing options.

Impact Specialist Finance has recorded a 28 per cent rise in adverse credit mortgage enquiries in the last six months compared to the same period last year.

Online mortgage broker Mojo said it had also received an increase in applications from applicants with credit issues.

Between June 2019 and June 2020 the broker saw the proportion of mortgage applicants it could not place with mainstream lenders rise from 16 per cent to 28 per cent, with its proportion of high street-worthy clients falling from 84 per cent to 72 per cent. This split remained the same between June 2020 and June 2021.

Meanwhile, Habito has recorded a slight increase in clients with a poor credit history between quarter one and two this year. The broker said the proportion of applicants answering yes to either incurring CCJs, being made bankrupt or repossessed in the last six years, or those who have taken out a payday loan, defaulted on a mortgage payment or made a late mortgage payment in the last two years rose from around 4.5 per cent to 6.5 per cent.

Dale Jannels, managing director of Impact Specialist Finance, said: “We’re receiving a lot of enquiries from clients who want to move home or buy for the first time but have incurred some sort of adverse credit and want to know how much they can borrow in six to 12 months time.

“There are lots of reasons people have struggled during the pandemic. The loss of a job may mean they have had to prioritise paying the mortgage or rent over other bills.

“It’s good that people are planning ahead to find out now what their borrowing options are.”

Jannels says it is often small bills such as a parking fine or a catalogue bill that get overlooked or not taken seriously but wind up as a default marring a borrower’s credit history.

Director of mortgages at Mojo, Cassie Stephenson, said it was not just the impact of furlough or unemployment that led to an increase in families being shunned by the high street banks.

Lenders’ reaction to the pandemic has been to tighten criteria so that only those with high levels of equity and income are guaranteed to get a mortgage.

“Credit risk committees play an integral role in how lender criteria is managed and it’s clear these groups have had to tighten rules significantly to minimise the amount of ‘bad debt’ on their books over the past few months,” she said.

“This is also the reason why initiatives such as the newly-introduced government backed mortgages [for high loan to value deals] and products specifically designed for those with impaired credit are so important to supporting first-time buyers.”

Metro Bank launched its near prime mortgage range in February and is currently the only high street lender openly offering loans to those with a less-than-perfect credit history.

Supporting the bank’s decision to launch the range were findings from accountancy firm PWC that suggested there could be up to 14 million people in the UK with a less than perfect credit history.

In partnership with YouGov, the bank conducted a survey that revealed more than eight in ten people with adverse credit history thought banks and other lenders weren’t interested in helping people like them.

The survey also showed that more than four in ten of the respondents have been prevented from getting a mortgage or remortgage as a result of their credit history.

Charles Morley, director of mortgage distribution at Metro Bank, said: “It’s easy to feel let down or cast adrift when you’re a borrower with historic credit issues. However, there are still options out there for those looking to get on the housing ladder, remortgage their property or move home.

“So if you have a CCJ or missed payments against your name it’s worth assessing your options in the market – there are opportunities out there to get a mortgage that’s right for many customers.”

Until 30 September, the relief will only apply to properties of £250,000 and under, before returning to the standard threshold of £125,000 on 1 October, alongside the previous duty exemptions for first-time buyers.

With average property prices at an all-time high and now surpassing the new threshold, activity in the market is expected to tail off as savings become less likely. 

So this week, Mortgage Solutions is asking: Will the housing market be noticeably affected by the tapering of the stamp duty holiday? 

Cloe Atkinson, managing director of mortgage technology solution Mortgage Engine 

The stamp duty holiday was introduced and then extended to boost demand following the almost total shutdown of the housing market and this policy seems to have been a clear success.  

There is some concern that a small number of purchases might fall through, and overall demand and transaction levels will drop.  

Certainly, some buyers who might have benefited from the tax holiday might re-think their options, but any idea that we will see a huge fall in activity ignores the fact that the market simply hasn’t been operating as normal for the past year and a half.  

The longer-term economic and societal impact of the pandemic, as well as how the industry continues to respond, will likely play a far bigger role in influencing the future of the housing market. 

As lockdown restrictions continue to ease, more pent-up demand will be released as buyers and sellers who have sat tight come to market. Additionally, the future of where and how many of us will work post-pandemic is becoming clearer and more definite.  

This could mean the ‘race for space’ accelerates. There are also serious challenges looming over the future of the market that go far beyond the end of the tax holiday.  

The end of furlough later this year and the withdrawal of government lending from businesses could have serious ramifications for the finances of potential buyers. As the economic impact of the pandemic becomes clearer, issues of affordability and vulnerability look set to come to the fore. 

The property industry needs to look beyond the end of the stamp duty holiday and ensure that it is prepared to meet these challenges, by investing in the right tech and people, refining capabilities and examining procedures. 

Kevin Roberts, director of Legal & General Mortgage Club  

The mortgage market will certainly be impacted by the tapering of the stamp duty holiday. However, the extent to which it changes the market is still to be seen.  

We know that demand for property is currently being driven by a real range of factors and that means people will still be keen to move, even after the tapering takes effect next month. Many still wish to upsize and relocate and there is also significant demand from international buyers.  

Last month, our SmartrCriteria data showed that advisers searched for mortgages suitable for buyers with visas more than almost any other criteria point. 

It’s also important to remember that we have not seen any significant changes to housing supply or how our housing stock is utilised since the stamp duty holiday began.  

That means competition for homes remains high and at a time where housing availability remains unchanged. We must remain positive that the UK’s levelling up agenda will help to change this, but for now, unless there is a big shift in housing supply or usage, stable price growth looks set to remain. 

Many have been quick to predict cliff edge disruption when the stamp duty holiday draws to an end, but we’re more likely to see a more gradual return to normal market conditions.  

For now, while mortgage rates remain extremely competitive, it continues to be a great time for people to borrow. 

Jonathan Stinton, head of intermediary relationships at Coventry Building Society  

It’s unlikely that the 1 July will bring as big a ‘cliff edge’ as many in the market previously feared, thanks to the taper. 

However, there will undoubtedly be many disappointed borrowers who are unable to complete ahead of the deadline and whose tax bill will be higher than planned – the cliff edge was simply moved and a different set of purchases are now affected.

It’s worth noting though that what we’re seeing is a gradual return to a normal level of stamp duty, so any discount is an added bonus. 

For intermediaries, it’s vital that they continue to plan ahead to help their customers both in the short-term and after the tax break ends – the Covid-19 pandemic has changed working patterns for many, and their housing requirements have changed to match, with many now able to look further afield than before.  

Brokers who have maximised alternative streams of business, stayed in touch with existing clients, and who haven’t relied on stamp duty holiday-fueled activity to survive will be best placed to carry on their success through the rest of the year and beyond. 

The remortgage and product transfer market in particular could offer a strong source of business for many this year, due to a high volume of product maturities on the horizon.  

Being there to advise clients and help them get the best deal will mean that a broker’s services remain in demand. And we shouldn’t forget that house purchases will continue, even if at a lower level. As ever, advice will be crucial, especially for first-time buyers and the self-employed, and it’s there that brokers can really make a difference to borrowers. 

Pepper Money’s latest adverse credit study revealed that 52 per cent of adults with poor credit fear it will stop them from buying a home.

However, these fears have been dampened since last autumn when 69 per cent said their credit history would hold them back.

The study also found that only 6 per cent of homeowners who did have adverse credit before buying their current property said they were turned down for a mortgage.

Pepper Money says borrowers incorrectly believe that once they have experienced a credit issue they will ineligible for a mortgage for many years.

Three quarters of respondents said they knew what a County Court Judgement (CCJ) was, however, almost a quarter said they thought they would have to wait longer than five years to apply for a mortgage after being registered with a CCJ.

Some mortgage lenders will offer deals to borrowers who have been registered with a CCJ six months ago, however, the further in your past the missed payment, default or CCJ is registered, the lower your interest rate will be.

Paul Adams (pictured), sales director at Pepper Money, said: “This research is a mix of good news and bad news. It’s great that customers with adverse credit are generally more positive about their chances of getting a mortgage. There is, however, still a significant perception gap and areas of misunderstanding about the opportunities that are available for customers with more complex circumstances.

“The good news is that this presents an opportunity for mortgage brokers to help raise awareness and understanding about the options available, and this can help them to reach more customers and build trust.”

With multiple bids on the table, negotiations for a lower purchase price in line with the surveyor’s report are not being accepted by estate agents leaving buyers to stump up the extra money themselves or walk away.

Meanwhile, some estate agents have been reported to be restricting sales to cash-only buyers to sidestep the valuer’s opinion.

The number of properties selling over the asking price has reached a record high, according to NAEA Propertymark. Last month, one in three homes sold for more than its listed price as supply fell to its lowest level since 2002. The trade body reported there were now 16 buyers for each property.

The hot market has led to mortgage brokers in the West Country reporting extreme buyer behaviour with one London purchaser gazumping a Cornish resident by £250,000 and first-time buyers bidding more than they can afford and asking parents to give bridge the gap between their offer and mortgage finance.

Valuation reports

Emma Hamilton, mortgage and protection adviser, Blackdown Financial said she has seen three instances in the last two months where surveyors have returned valuation reports of between £10,000 to £15,000 less than the purchase price.

“One of my buyers had quite a big deposit so they were able to go ahead but it affected their loan to value and they ended up with a higher interest rate,” said Hamilton, who advises in areas including Taunton, Bridgwater, Devon and Somerset.

One of her clients as just been asked to put in a sealed bid for a property that has Japanese Knotweed, usually a deterrent to new buyers because of the destruction it can cause to the structure of a house. But after receiving four full asking price offers the vendors have asked for sealed bids leaving families to blindly guess how much their rival bidders are prepared to pay.

“The fact that we have sealed bids on a property with Japanese Knotweed in close vicinity to the property shows just how desperate people are,” she added.

Clare Coode of buying agents Stacks Property Search in Cornwall said several estate agents have reported mortgage valuations coming in significantly under asking prices in Cornwall and have used that as their excuse for only accepting cash offers in quite a few cases this summer.

In one case, Coode said they were able to supply enough research that backed up the amount offered by her clients such as comparable sold properties and the reasons why the price was unlikely to go down in the next five years. The valuer agreed with the research and backed up the bid.

‘Intense buyers’

Sami Bickford, managing director of The Mortgage Girl, who also advises families in the West Country and nationally, said estate agents are reporting having to manage “intense buyers,” and low stock levels.

“My client had an offer accepted of £350,000 and was gazumped by a London cash buyer, downsizing to Cornwall, who threw in an offer of £600,000. That’s the most extreme case of gazumping we have ever seen.”

Bickford said she’s also seeing cases of young buyers who fall in love with properties and are prepared to pay anything to secure them.

Her young couple clients had been offered a decision in principle of £140,250 and a maximum loan to value of 85 per cent. The saw a property on the market of £155,000 and ended up placing an offer of £165,000. The surveyor returned a value of £160,000 which mean the borrowers could now only raise £136,000 in mortgage finance and had to come up with the additional £5,000 they offered over the asking price, making them £9,250 short. Bickford searched for a 90 per cent LTV option but the interest rates were too high. The couple were able to proceed with help from their family.

“It goes to show people will do anything and everything to get the home they want, despite there be nothing extraordinary about that particular property,” she said. “There were no amazing views and they weren’t near the sea but they had fallen in love with the house and that was the end of it.”

Bickford said as part of her advice she goes through all options with her clients, including letting the property go and looking for a cheaper home.

Hamilton said in her experience buyers should try to renegotiate either by asking the vendor to reduce the price to the valuation amount or to meet them in the middle of the lower valuation and the offer but as the market demand for property is higher than the supply at the moment this was proving challenging.

Price correction

Buying agents are already warning that there are likely to be some house price corrections in the future so those who don’t need to buy now are being urged not to.

James Greenwood, managing director of Stacks Property Search, said: “We’re operating in unprecedented times so there can be no certainty around the future of this market.

“Some of the price rises we have seen were due. Country prices had lagged well behind London for years and some re-balancing was required. Buyers need to reset their expectations about what their budget will buy, and they need to be determined and serious.

“We could of course plunge into a post-pandemic recession. Current predictions point towards a period of inflation, so buyers who are paying a little over the odds in today’s market should be protected.

“There will undoubtedly be some corrections. I wouldn’t talk the bears out of holding tight and seeing what happens in a year or two but if your life requirements involve buying now hold tight and get on with it.”