A specialist property lender says transactions are being delayed by key staff being furloughed.
Gareth Lewis, commercial director of property lender MT Finance, says: “Lenders still have staff furloughed or working from home, and it is taking them too long to process applications. This isn’t going to change for a while yet as they don’t have the capacity to bring everyone back to the office. With many surveyors only just coming back off furlough as well, this is having a negative impact on turnaround times.”
Lewis makes his comments in response to the latest mortgage approval figures, released by the Bank of England.
These show approvals for house purchase rose to 66,300 in July, a 66 per cent rise on June's figure. This means that approvals for house purchase are, up to the end of July, just 10 per cent below February's pre-pandemic level.
“While July’s numbers show an improvement on June, they would have been better still if transactions weren’t taking so long” insists Lewis.
Jeremy Leaf - the north London estate agent and a former RICS residential chairman - says there could be improved figures to come.
“Mortgage approval numbers always provide a useful lead indicator of direction of travel for the property market in the coming months. Unfortunately, these figures relate to the period when we were emerging from lockdown but before the full benefit of the stamp duty holiday was being felt” he says.
“Contact with mortgage brokers or lenders is not always the first thought of aspiring buyers. As a result, these approvals do not reflect the stronger upsurge we noticed across most property types and price ranges from the beginning of August.”
Meanwhile Simon Gammon of Knight Frank Finance says the furlough scheme holds the key to how the lending and wider housing markets develop over the rest of this year.
He states: “The future trajectory of the recovery will depend on how many people lose jobs at the end of the furlough scheme. Beyond that, the reduced stamp duty rates are due to end in March, and we’re likely to see a bottleneck of transactions build up in the run up unless the government opts for an extension.”
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We are seeing a very late Spring Bounce yet instead of bringing back staff, the agents, surveyors, lenders and solicitors, they have brought back a handful to pick up double the workload just because they want to save some money now on claiming furlough wages. Takes the mickey out of a benefit put in place whilst you cannot operate. We will all have to pay it back later in some way!
Like so many aspects of the property buying procedure a lack of regulation is being allowed to cripple the process. Lenders should be made to handle mortgage applications in a fixed period of, say, 5 weeks. There is currently no incentive for them to chase references & surveyors reports etc & the service the vast majority provide is abysmal.
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