"The current service levels offered by some lenders are horrific and, what makes it more galling for advisers, is that this is not universal by any stretch of the imagination."
From the time it pops through your door, or lands on your desk, we’re thinking that – even on a bad day – you’ll open it the day it’s received. Perhaps if you’ve been out of the office it may take a little longer, and of course, if you’ve been on holiday.
So, on average, hours. Definitely not days, and certainly not 10 working days, which is the current ‘service’ standards of some lenders – which frankly beggars’ belief.
Of course, we’re being somewhat flippant here but this is genuinely the situation some lenders currently find themselves in, and you can be the hardest-working, most diligent adviser in the country, and there’s no way these service standards aren’t going to impact on your ability to complete cases and provide the type of service you want to give to your clients.
The reasons given for this state of affairs are somewhat opaque. Would honesty even matter? Well it would be a start. What we do know is that this is a struggle lenders are facing with normal business capacity – what they might be like with any more work doesn’t really bear thinking about.
Even in this situation we have the repeated spectacle of lenders pushing rates higher and higher in an attempt to curb normal business levels. The reality being that, given no-one wants to be last lender standing and since a large number are all struggling with resource issues, then the end of this practice looks someway off.
In the meantime, it is consumers who will continue to be hit hard, and advisers will be left explaining why the rates that were available just a few days ago, are suddenly not there anymore and the price has gone up again.
What is the long-term plan for ending this cycle of events? Ordinarily, you would hope that lenders would be able to bring on enough resource to cope with demand, ensuring they don’t need to change rates three times in 10 days as one mainstream lender recently did.
But it’s easier said than done, and the decision by many to cut resources back significantly during that first Covid lockdown is continuing to bite. Many moved on to other roles and won’t be coming back. Those that will come back, understandably, want better pay and conditions. They don’t want to work in offices five days a week. In short, they have other options.
Are lenders, who are unable to resource up adequately enough, hoping that the cost of living situation makes enough people put on hold their plans for moving, that demand drops, and they can then cope? Perhaps. But, even in the current situation the demand to buy is still there.
That being the case, the one fallback they may be able to count upon, is the continued lack of supply. We’ve seen clients who have put in offers on over a dozen properties and lost out on every single one, so that does have a dampening impact, but recent statistics suggest that the number of houses coming up for sale is starting to inch up. Nowhere near enough to meet demand, but enough to suggest that the number of purchase transactions during 2022 is going to be well over 1.2m.
Lenders will have to cope with this, plus they will have to cope with the burgeoning remortgage market. Rate changes cause borrowers to look at what they have, what they might be coming to an end of, and what they could secure in this environment. They also tend to result in a quest for safety and certainty. Remortgage activity is going to fill the gap left by any drop-off in purchasing – and we’ve barely seen it drop off.
We appreciate that lenders are looking for solutions but putting inexperienced staff in positions which require experience is not a good look. It simply generates arbitrary decisions when you would normally get rational decisions from those experienced in the role. Just recently, we were trying to get a case through a private bank and one individual told us they would have to refer the case as they didn’t understand business accounts and what they said about the customer’s finances.
The current service levels offered by some lenders are horrific and, what makes it more galling for advisers, is that this is not universal by any stretch of the imagination. A number of lenders are on top of this but, of course, they also have to react to market competition, and what those who are not at the races are doing when it comes to rates.
What we can say is that advisers have long memories. We won’t name them but one mainstream lender, who operated a car-crash of a system half a decade ago, is only just regaining the trust of the adviser community. In other words, it takes very little to lose credibility (and business), and it takes a lot to pull it back. This is not a transitory episode that will be forgotten; it’s time to get a grip, open the post and resume normal service.
