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Delays in handling mortgage applications explained by lenders

A number of factors have been blamed for the delays – namely, new complexities resulting from COVID-19 and strong demand, while difficulty scheduling surveyor visits to properties with tenants has often been a stumbling block in buy-to-let purchases. 

As of mid-October, buy-to-let applications being handled by Santander were taking around 26 working days to go to offer via a broker. 

Meanwhile, Nationwide’s buy-to-let branch The Mortgage Works has been taking around 25 days to process a standard buy-to-let application, and both portfolio and limited company cases have been taking around 34 days. 

Elsewhere, while the time taken to process residential applications remains relatively slow, it does usually move slightly quicker. Indeed, NatWest typically takes 22 days to handle purchase applications and 21 days for remortgage deals. Nationwide spends 23 days on standard residential and 24 for referred, while Santander takes 21.3 days.

A Santander spokeswoman said: “We’re sorry that the processing times are slightly higher than we would normally work to, and can assure customers that our team is working hard to process the high volume of mortgage applications we’re receiving across both residential and buy-to-let mortgages.”

A Nationwide spokeswoman has explained why there have been such lengthy delays, suggesting that the stamp duty holiday has seen demand increase. Moreover, the lender has received more applications than many of its competitors, as it is one of only a few lenders that handle 90% of LTV cases.

Unsurprisingly, the delays have also been attributed partly to COVID-19, which is said to have made some cases more complex than they would otherwise have been and has meant that these applications have been subject to a thorough review by underwriters.

Elsewhere, Nationwide and Santander have pointed out that buy-to-let applications are often delayed due to restrictions on surveyors being able to enter the property in the current climate. 

Nudim Akhtar, mortgage & protection consultant at Contractor Mortgages Direct, said: “20-plus days for an initial underwriting is a failure in my opinion, and not fair on the borrower.

“Simply increasing rates to deter borrowers is not the answer. Where they cannot service the application in a fair timescale, maybe the lenders should stop lending.

“Either that or they could have a senior underwriter look at the application at the beginning to ensure the documents underwriters require are in order.

“Underwriting understandably has become more complex, but triage teams could become more widely available to go through the application at the submission to ensure it has the best chance of acceptance on the first underwrite.”

However, Akhtar’s assessment wasn’t all negative, and he was particularly impressed with how two lenders, in particular, were handling the situation.  

He added: “Halifax, in my opinion, is way ahead of the game. They have case managers who are so helpful on the application that no other lender can really catch up with them in terms of service delivery.

“Then you have Coventry Building Society, who have the most pleasant telephone manner one could ask for.

“Other lenders really need to have the customer at heart rather than filling their boots. It is the usual suspects who are delivering a shoddy performance now. Humans make a lender – not systems and processes.”

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