Purchasing a home has become more difficult this year with a far tighter lending criteria coupled with rising interest rates.
To compound these problems, applicants now have the anxiety of processing delays and lenders insisting on using their approved lawyers.
When the application is for a purchase which forms part of a property chain, the time period is crucial. It can make the difference between success and failure in securing a home. Clearly some lenders have an inadequate number of trained staff which is naive if they have market leading rates.
Newcastle-based Northern Rock, still using a banking licence under that name, was reported to have taken up to 10 weeks to process applications. No doubt part of this was down to reducing its administrative staffing by 680 just prior to being taken over by Virgin Money.
It now claims to take 29 days “on average” which is still pretty laid-back.
The other two noted offenders for delays are Clydesdale Bank (whose subsidiary is Yorkshire Bank) and HSBC. It can take weeks to even secure an appointment at HSBC. It reduced its panel of approved solicitors and licensed conveyancers – noted for their low charges – to just 43 firms, upped on May 10 to 48.
If an applicant wants to use their own solicitor, HSBC still imposes a fee of up to £192 to have the legal work checked.
Another delaying tactic applied by HSBC is to refuse an online bank statement for proof of income. Instead it requires applicants to submit a paper one which is supported by their own bank’s authorised signatory and branch stamp.
Other lenders who are now concentrating on the residential market have also been unhelpful in their quirky approach. Spanish bank Santander (which took over Bradford & Bingley) has introduced an ‘affordability’ criteria with intrusive questions, such as the amount expended on Christmas gifts.
If applicants say they spend above the regional average, the bank accepts the figures but inserts the higher ONS statistics if below.
If providers cannot offer an efficient timely service, they should either employ more staff or opt out.