The Mortgage Practitioner sole practitioner Danny Lovey has warned that the whole UK mortgage system could seize up in the next month as a result of poor service from lenders.
He says lenders’ service to brokers has become so appalling that only straightforward cases with high credit scores, those that can be fasttracked, are being completed. He says brokers with more complicated cases “do not stand a chance”. Lovey points to Scottish Widows Bank and Halifax as two lenders that he feels have struggled recently, although he says the problem is widespread.
He says: “Brokers are like a nut in a nutcracker at the moment. We are reaching a stage where I can see the whole system seizing up in a month or so. Every day, lenders are dropping out of the market and certain parts of the market. I can only see it getting worse.”
Last week, Scottish Widows Bank closed its mortgage processing unit phone lines from March 11 to March 17 due to high volumes of mortgage applications. It withdrew its two, three and five-year fixed-rate products at less than an hour’s notice. It has also stopped accepting new business applications for its graduate, keyworker and buy-tolet mortgages.
Scottish Widows Bank head of product development and marketing Richard Clark says: “We have experienced unprecedented levels of business over the last couple of weeks. We took the decision to suspend our phone lines to allow us to get through the applications.”
A Halifax spokeswoman says: “Over the past few months, we have recruited heavily into our support areas and helplines. All of our colleagues receive an induction and training prog-ramme but, as you can appreciate, it takes a bit of time and on the job experience to truly get up to speed.”