85pc of brokers think MMR stifles business
Of the 251 brokers and IFAs surveyed common comments were “lenders are taking forever to look at cases”, with many citing big delays with no flexibility and lenders’ staff being unfamiliar with new procedures.
Nearly eight in 10 (78%) said lenders’ affordability rules differ either slightly or significantly, as one respondent said: “Affordability seems to be a haphazard practice with different lenders having completely different rules.”
Two-thirds (66%) of advisers said it takes them over an hour to conduct an initial mortgage interview compared to one third (33%) before MMR, while some even said it has taken them three hours.
Chris Little, managing director of BEP Financial Systems, said: “The survey which was answered by hundreds of mortgage advisers and IFAs revealed that life has got much harder for them and their clients since the Mortgage Market Review was introduced on the 26 April.
“While some comments may reveal initial teething troubles as lender staff get to grips with new rules and systems, it is worrying that 85% of advisers now find it longer and more difficult to get a mortgage case through.
“This has also been clearly reflected in recent statistics from both the CML and the Bank of England showing a continuous drop in mortgage approvals.
“While the mortgage application process will inevitably continue to take longer than it did before the MMR, it should start to get easier as everybody becomes more familiar with what is required of them and it will be interesting to see if the results of our survey in three months’ time show this to be a reality.”
Advisers often feel out of the loop, as 57% said lenders undersupplied them with information on regulation and best practice, prompting them to turn to their network or mortgage club, trade press or to the FCA direct.
Of the survey respondents 37% were IFAs, 29% were directly authorised mortgage brokers and 36% were appointed representatives.