When questioned on the most important elements of an effective lending decision, 82 per cent of brokers cited speed and nearly three-quarters (73 per cent) said it was a bespoke app-roach based on clients’ personal circumstances. Nearly four in ten (38 per cent) agreed that affordability-based lending enabled them to write more business.
Overall, more than half (58 per cent) of those who said affordability-based decisions helped them increase business said it was because it enhances their client’s confidence in their ability to afford a mortgage. Nearly a third of the same group of brokers (30 per cent) said it also enhances their confidence in lenders.
Online capability is high on the brokers’ agenda as three in four (75 per cent) said getting a decision online is one of the most important elements of an effective lending decision. Two-thirds (67 per cent) of brokers said it is the ability to offer greater flexibility and higher loans to customers who can genuinely afford them.
Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester, said: “The independent research supports our own feedback from brokers that they prefer affordability-based lending decisions because they offer greater flexibility for their clients and in some cases enable them to afford homes that were previously deemed out of their reach.”
James Cotton, mortgage specialist at London & Country, commented: “Increased speed of processes are of great benefit to brokers as long as quality of advice is not compromised. Affordability-based lending is the way the industry is moving and I expect other lenders to follow suit.”
