As I become increasingly intolerant of a general deficiency of fair play, I find myself despairing of the rigidity with which lenders are destroying the mortgage market and simultaneously sowing the seeds for the property value meltdown of 2014.
The architects of current lending policies seem hell-bent on devising rules that bear little scrutiny when searching for common sense.
Never has this been more apparent than my recent experience of dealing with Leeds Building Society. The Leeds can contrive attractive lending propositions but these come with the unwanted baggage of a dreadful online submission procedure and a devotion to process that would make the FSA blush.
I have yet to encounter a more tortuous agreement-inprinciple and application system, which sets the scene for ensuing aggravations. My client is purchasing an exrepossession buy-to-let property and a speedy exchange and completion is a central requirement of such deals.
Leeds advises it requires proof of a minimum earned income of £20,000 as well as proof of identity, latest bank statements and proof of deposit. As the client has an existing buy-to-let, I also provided a copy of the letting agent’s statement and tenancy agreement.
The first problem is there is a five-day delay before post can be assessed. To discover this, one has to wait for 20 minutes in a phone queue.
Leeds advises the bank statements provided are not acceptable because, as online statements, the applicant’s name is not shown. This is fair enough and I explained to them that while this is being resolved would they please send their valuer as a matter of urgency. Leeds refused as its rulebook insists on proof of income and identity being provided first. I explained the applicants are in danger of losing the property because of these delays and they accept the valuation fee will be forfeited if the Leeds cannot make an offer but this was also unacceptable.
Eventually, I am advised they have everything they need and the valuation is carried out. I now anticipated an offer which did not arrive. Another 20-minute phone wait provides the news that further documentation is required. You will recall that the Leeds previously advised that it had everything it needed but it seems they had everything they needed to go to valuation – not to issue an offer. An email was supposedly sent to me but I did not receive it.
Further proof of income and deposit was required, which was provided and finally, almost six weeks after application, an offer was made available. End of story? No. As I write this, the applicant’s solicitors still await their copy of the offer.
Alan Lakey is partner at Highclere Financial Services