Delay to get mortgage blamed on home working at banks

Month-long delay to get a mortgage blamed on home working at banks

Home working by bank staff has been blamed for causing a massive backlog of mortgage applications that is hammering first-time buyers and delaying house purchases by up to a month. 

Sources said banks are failing to cope with a sharp rise in applications because so many staff are working from their kitchen tables. 

The number of people buying homes has surged since Chancellor Rishi Sunak announced in July a stamp duty holiday on the first £500,000 of the purchase price. 

At home: Sources said banks are failing to cope with a sharp rise in applications because so many staff are working from their kitchen tables

Industry insiders said banks would have been able to manage the rise in buyer demand in normal times. 

But lenders have instead responded by axeing the low-deposit deals that help first-time buyers. These loans take more time to process because they are riskier for banks and more affordability checks are required. 

Meanwhile, borrowers are waiting an average of 26 working days to get a mortgage offer from Nationwide, the country’s second-largest mortgage lender. 

Santander customers must wait an average of 20 days while at NatWest it is 12 days. In normal times, banks have made these mortgage offers within seven days. 

James Daley, managing director of consumer group Fairer Finance, said: ‘We’re six months into working from home now, so the moment for excuses is running out. There are challenges having large numbers of people at home. But for something like mortgage processing, there’s absolutely no reason why you can’t run at full capacity if you had made the necessary preparations. 

‘They haven’t put the resources into making sure these divisions can run properly out of the office. Now, it means the stimulus from the Treasury isn’t having its full effect.’ 

Nationwide’s average waiting times have risen because it is one of the only major lenders still offering loans on a 10 per cent deposit. It is now providing half of these types of loans in the market. A spokesman said customers submitting simpler applications would not have to wait as long for a loan. 

‘We are determined to continue supporting the market and are asking brokers and buyers to bear with us as we progress cases at what remains an unusual time,’ he said. 

Lenders were battling for mortgage customers before the crisis, coming up with ever-more complex products to lure first-time buyers. 

HSBC had just ploughed billions into the market and sparked a price war that pushed out smaller players such as Tesco and Sainsbury’s Bank. Now the banks have turned off the taps as they struggle to deal with demand that is up by 34 per cent on last year, according to Zoopla. 

Katie Davies, executive director at the Intermediary Mortgage Lenders Association, said: ‘A lot of lenders have still got huge numbers of their staff working from home, which inevitably slows down the system – and it’s having a knock-on effect on the products being offered.’ 

Rob Clifford, of mortgage broker network Stonebridge, said: ‘The lenders face some real challenges restoring their capacity. 

‘They have not managed to restore their normal mortgage processing capability by opening all their offices.’ 

A spokesman for HSBC said: ‘We have seen a significant increase in demand for our mortgages, which has affected service levels, not our colleagues working from home.’ 

A Santander spokesman said: ‘We regularly review our product offering to manage the inflow of applications and ensure we can continue to deliver a high level of service.’