A staggering 1 in 4 deals per broker (23 per cent) have been impacted, new GE Money Home Lending research reveals
Almost 1 in 5 (17 per cent) claim deals are not being honoured after a decision in principle (DIP)
Research shows brokers understand realities of market – a week is considered fair notice by almost two thirds of intermediaries.
“Our latest research shows that not only have 87 per cent of brokers experienced deals that have encountered problems due to lenders withdrawing product ranges or making changes to pipeline dates at short notice, but that a staggering 23 per cent of all mortgage applications have felt a direct impact from the current global credit crunch. During these challenging times there will inevitably be changes to ranges with shorter notice periods, but communication is key and lenders should endeavour to give brokers reasonable notice to alterations in product ranges and changes to pipeline dates,” Duncan Berry, sales director, GE Money Home Lending, stated.
Researchby GE Money Home Lending has shown that 87 per cent of mortgage deals currently being handled by mortgage brokers in the UK have suffered due to lenders changing product rates, criteria, or pipeline dates at short notice. More shocking is that 1 in every 4 deals being handled by an average broker is being effected in such a way.
Since the global credit crunch, brokers have been more familiar with lenders withdrawing products at short notice, as well as amending criteria or revising rates and fees. According to the GE Money research pipeline speed, efficiency and clarity are one to the biggest factors when it comes to the smooth running and profitability of most UK mortgage brokers, with 96 per cent claiming this to be the case.
However, despite the importance placed upon pipeline - and the associated problems it causes for businesses and consumers alike - mortgage brokers are pretty understanding of the need for changes to ranges in the current market. Indeed, a surprising 59 per cent of brokers felt that it was acceptable for lenders to withdraw deals with as little as one week’s notice, with 85 per cent of brokers requesting two week’s notice as a reasonable time frame.
Duncan continued: “Brokers are not a naïve bunch, so have a realistic attitude when it comes to lenders changing ranges in the current market. However, a clear frustration is that some lenders fail to give reasonable notice or fail to communicate clearly to their partners when making fundamental changes to their ranges. Pipeline speed, efficiency and clarity are clearly important to broker businesses, so it is crucial that lenders work hard to keep them well informed when making such alterations. This will help combat the unacceptable number (55 per cent) of brokers who say they are seeing an increase in deals not being honoured even at offer stage.”
