This has led to record sale periods, with property being snapped up within 33 days of being on the market on average, with intermediaries left to shoulder the burden of securing a mortgage for their client before another buyer swoops in.
So, this week Mortgage Solutions is asking: Has the pressure on buyers to secure a home quickly had a knock-on effect for brokers?
Dina Bhudia, CEO at P2M Asset Management
We are 100 per cent having to shuffle cases due to the pressure from urgency, and the rates ever increasing means the speed and efficiency of the application is paramount. If business development managers (BDMs) or lender telephone desks are not efficient then they are losing the applications to competitors.
The level of lending seems to outweigh the rate, buyers are needing higher income multiples to meet the higher offers to secure a home. Estate agents don’t help, many are not allowing clients to view the properties unless a decision in principle (DIP) has been evidenced, or even the clients are being cherry picked by the estate agent’s preferred advisers.
Consequently, we are having to get sellers and buyers to ensure they have provided all the documents and make decisions much quicker. Sole trader brokers who don’t have administration support may not be able to meet the increased expectations of speed, as they are having to deal with the whole process on their own.
I really wish lenders could make it easier by requesting less documents, automating initial document checks, and instruct surveys earlier on in the process, this way it keeps the estate agents at bay.
I have a great team, and we are having to prioritise and delegate, however capacity is definitely there, as using CRMs and fintech to assist with managing the process and client expectations. However some cases still need to be discussed more in the specialist world.
The difficulty is more in the remortgage process with lender solicitors, clients find the automated process very frustrating, and the legal process does not seem to be very client user friendly.
Alex Winn, mortgage team lead at Habito
The housing market for buyers feels fraught. We have most contact from customers, but many estate agents and brokers working in those agencies often put pressure on buyers to secure their home quickly.
We regularly hear from buyers who’ve felt pushed to use in-house broking services that work from a limited panel and charge fees, which may not be in their best interest. But, if the agent is saying speed is key in the transaction, buyers might feel like they have no time to shop around, or they’ll risk losing their dream home.
Selling quickly isn’t usually an issue; it’s finding the right property and being ready to proceed. That said, there are still limitations that we have to work with, such as solicitor or lender timescales, which typically sit outside of a broker’s influence. I’ve noticed agents can then shift their focus to the next property instruction, so because it’s a seller’s market, the amount of chasing from agents on completing sales has actually declined.
Speed is certainly the name of the game for borrowers when it comes to getting lower rates. Rapid rate changes and product withdrawals are making timings a little more challenging – lenders giving more notice on product withdrawals would be very helpful.
However, with rising product interest rates I’d expect the ‘frenzy’ may start to slow for new lending.
For brokers, remortgaging will continue to be really important as homeowners look for ways to save money on their household bills. For us at Habito, anything that makes the process slicker and removes friction for customers, as fintech does, can certainly help with speed to mortgage offer.
Dee Ganesharajah, senior associate at Mesa Financial
We’ve felt the knock-on pressure immensely. Nowadays, most clients expect everything to have been done yesterday. The fear of not having their offer accepted or being gazumped seems to push buyers to offer over the odds and stretch the realms of affordability.
The knock-on effect to me as broker means coming up with a suitable option as quickly as possible. With so many brokers competing for business at the moment, speed and efficiency is everything. This means being flexible with working all hours, being clued up with lender’s service levels as well as criteria and most importantly, always managing clients expectations.
The lack of supply of houses has also affected work load, as clients keep going back and forth with different scenarios, like property values and borrowing, not to mention rates constantly changing not helping matters. This all results in us re-broking cases numerous times prior to offer.
We have seen a slightly quieter period post-Easter, with clients waiting for new properties to come on the market. I don’t think this will help the frenzy, in fact I think it will exasperate things. However, I feel that volume levels may level off, due to people’s hesitancy around the economy and geo-political issues to sell their property.
