Stricter lending criteria mean more work, say 85% of brokers

The vast majority of mortgage brokers have seen their workload increase over the last three years according to a survey from Legal & General Mortgage Club.

Related topics:  Mortgages
Amy Loddington
18th March 2014
Mortgages

The research found that 85% of intermediaries are spending longer on a typical mortgage transaction from application to completion than they were three years ago. This is largely down to increasing requirements from lenders, who now ask brokers to provide more detailed information on clients, including affordability assessments and rate stress tests. Brokers need to provide lenders with documentation to prove that a potential borrower can meet future repayments before the lender will consider them for a product.

The survey asked 360 brokers how long they spend processing each mortgage application they receive and whether this had increased or decreased over the last three years.

12% said their workload had stayed the same and only 3% said their workload had decreased. The average amount of time spent on an application is now nearly 11 hours.

Jeremy Duncombe, Director at Legal & General Mortgage Club said:

“Since the financial crisis, lending criteria has become much more stringent.  Brokers now have to match a borrower to a lender based on their circumstances and the affordability of the loan.  This is a good thing as it builds a much stronger relationship between the broker and lender and improves the professionalism of the mortgage market. However, it does mean that brokers are not being rewarded, pro rata, as well as they were a few years ago.

“With the average procuration fee at around £550, the average rate per hour for brokers is approximately £50. When compared with other similar professions, this is significantly lower. It is important to make sure that brokers receive appropriate reward for their hard work and to allow for continued investment in professionalism.”

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