Contingent workforce helps mortgage underwriting departments with increased demand
Mortgages processing times have increased significantly in the last few months as homebuyers in the UK were able to re-enter the housing market once lockdown restrictions were eased. This has led to homebuyers waiting excessive amounts of time for their mortgages to be approved. Understaffed banks have been overwhelmed with increased applications at the end of lockdown as pent-up demand was released. Remote working has also placed additional issues on the application process, as many internal systems are not equipped to process applications remotely. One of the biggest impacts has been on valuations: surveyors/valuers have not been able to visit properties, especially flats due to social distancing – and it is debatable if it is the greater reliance on desktop valuations or fear of a drop in property values that has driven lenders to reduce the number of high LTV products. Simple application processes that usually take a few days to reach the offer stage are now taking several weeks, leaving banks to struggle to provide for the increased demand and their consumers not being able to move forward with their financial plans.
Many contributing factors have led to an increase in demand for loan applications. One of the leading contributing factors has been the removal of SDLT (“stamp duty”). With the stamp duty holiday announced, homebuyers at all levels are using this opportunity to hop on or to hop up the property ladder, especially for first-time buyers who now need not worry about this substantial cost. Another key reason is that rates have also fallen. According to Moneyfacts, the average two-year fixed-rate mortgage was available with an interest rate of 2.07pc at the end of July, compared with 2.48pc a year ago.
The Telegraph reported that it was clear that lenders needed additional support to cope with increased demand, and gave an example of a bank who had experienced its two busiest days in 17 years of business and that other lenders offering 90pc loans, could not process applications in time . The FCA reported that the value of new mortgage commitments (lending agreed to be advanced in the coming months) was 6.1% higher than a year earlier, at £67.6 billion . Managers at four of the nation’s 15 biggest mortgage lenders anticipated hiring thousands of employees this year to keep up with what they expect to be a flood of demand for both purchases and remortgages. Borrowers have been urged to review available mortgage options as early as possible to avoid the extended turnaround times.
With lenders working at full capacity and remotely, the contingent workforce has been called in to help underwriting departments with additional demands. Current working conditions mean banks are needing to stand up additional capacity remotely and at speed. Sourcing, vetting, and onboarding even small teams capable of being managed remotely have brought new challenges during the pandemic and the contingent workforce has stepped in to solve the issues at hand so that service levels can be reestablished at BAU levels as soon as possible.
If your underwriting team is under pressure due to the increase in demand contact us today to see how we can assist you in your resourcing requirements. Contact us today.