Are slow decisions damaging the mortgage market?

“Money loves speed, it hates friction,” according to mortgage broker Saam Lowni (pictured left), who believes that the time it takes for lenders to make a decision on an application is a major factor in what he perceives as a broken housing market. “A big part of what’s slowing it down is the speed of decisions. Too many deals die, or become unnecessarily expensive, because of inertia. Not because they were wrong, not because they were risky - just because the process dragged its heels.”

Lowni, founder and managing director of Merryoaks Finance, cites as an example a client who is on a bridge and needs to re-bridge, or perhaps exit on to a term loan to avoid heavy penalties. “When time really is money, the delay isn’t just inconvenient, it’s damaging,” he said. “The real problem is how underwriting is being done - piece by piece, inefficiently, reactively. That’s where we’re losing valuable time. I appreciate lenders want to lend, and the faster they can deploy capital the faster they too can earn, so the fact we are on the same page pulling in the same direction hopefully is encouragement.”

Lowni urges lenders to deliver a ‘no’ quickly. He suggests a slow ‘yes’ is bearable, but slow refusals to lend are not acceptable, in his view. “We’re on the same side,” he said. “We want good deals funded. We want clients to succeed so they can go again and support the property market. Maybe it’s time to bring AI into the process, perhaps not to replace final judgment yet, but to handle the basics faster, flag issues earlier, and cut through the delays that don’t serve anyone.”

Senior mortgage broker Louis Levine (second from left), from Orton Financial, concurs that there is an issue with the speed of decisions. “The market is staggeringly slow,” Levine said. “I suspect a lot of that is down to lenders being exceptionally large companies, with convoluted processes and limited willingness to step outside of them when common sense is needed. For example, a major lender was recently taking 10 working days when a minor update to a loan size was needed. It is difficult to explain to a client how that is the timeframe the bank have set.”

For specialist mortgage broker Jessica Reehal (pictured second from right), from London Mortgage Solutions (LMS), slow decisions absolutely add pressure to the mortgage market – but she believes the issue runs much deeper. “As a broker, I completely understand the frustration when lenders are slow, especially when all criteria have been met and everything is in order,” Reehal said. “Delays can lead to deals falling through or becoming more costly, which can feel avoidable and unnecessary. However, I believe there’s a bigger issue at play. The UK is an island – we’re dealing with a finite amount of space, and we already have a serious housing shortage. The lack of available homes is a long-standing structural problem that’s being compounded by inefficiencies across the board.” She added: “Faster decision-making will certainly help – but it’s not a cure. The market is already stretched, and unless we address the root causes like supply constraints and planning delays, we’re only applying short-term fixes to long-term issues.”

Eric Miller (pictured right), a mortgage broker at Affinity Group, does not believe, however, that the time to offer or to completion is causing an insurmountable problem for the market. “There are a number of lenders that are able to verify income and spending based on credit reports and open banking,” Miller noted. “This is speeding up the process for the broker, however this only works for the less complex cases. There are still a number of lenders that require all the documentation to be manually reviewed but then they need 48 hours or longer to review. This can be exacerbated by the lack of clarity around what exactly they are asking for.”

He continued: “The biggest delays in any purchase are the searches and the solicitors. In a time where we have so much technology available to support applications. why do so much of their work as a manual process? Why do we have to wait for them to dictate their response to a question so an assistant can then take another day to type out the response? There does need to be more transparency over works required on the property and details of ground rent and service charge not being made available prior to buyers making an offer.”

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What do lenders say about the situation – and how can brokers help speed up the process?

A perceived sluggishness in decision-making is a symptom - not the true driver - of poor performance in the homebuying process, according to Peter Dockar (pictured inset above), chief commercial officer at Gen H. “What we need to focus on is creating certainty as early as possible,” Dockar said. “Whether an offer arrives in 30 seconds, three hours, or three days, the outcome is often the same. Marginally quicker might feel better in those small increments, but what genuinely matters is a strong decision a lender and borrower can rely on. Nearly every party in the homebuying process has faced criticism for a lack of speed. Yet, the very errors causing these delays often stem from haste itself: brokers mis-keying credit commitments in a rush, solicitors firing off contract packs with incorrect property addresses. They're working as fast as they can, but poor systems breed errors and compound delays. These are the real problems that can add weeks or even months to a buyer’s uncertainty.”

He continued: “Consider conveyancing - despite the digital revolution, it somehow takes longer today than 20 years ago. This is largely due to a lack of resources at local authorities, where returning searches can take weeks. The implementation of more powerful systems and tech could improve this. However, despite current efforts, some councils remain notorious.”

Dockar is encouraged that the Financial Conduct Authority will enable firms to experiment with AI using NVIDIA accelerated computing and NVIDIA AI Enterprise Software. “This is a positive step that will hopefully empower firms to create both speed and accuracy in tandem,” he added.

Meanwhile, Leon Diamond (pictured inset above), chief executive officer and founder of later life lender LiveMore Capital, acknowledges that the question of speed in decision-making is fundamental to the health of the housing market, but believes that the greater issue is the time it takes from the offer onwards. “There’s no doubt that inertia, particularly between offer and completion, has become an industry-wide challenge, often due to entrenched processes and a complex, manual document trail,” Diamond said. “This can make transactions unnecessarily lengthy and, at times, costly for all parties involved.  On average, moving from offer to completion typically takes several months. For straightforward remortgages without title changes or chain complications, the process can be quicker, provided there are no barriers such as ongoing fixed rates or probate issues, and customers engage promptly by returning signed offers. However, the weighted average seasoning across portfolios is around 5.9 months, which gives an indication of prevailing timelines.”

There is certainly a need for improvement, in Diamond’s view. “The more efficiently we can facilitate a confident ‘yes’ and smooth the journey from application through to completion, the greater the benefit to both customers and the market as a whole,” he suggested. “While some delays are outside the lender’s direct control - particularly where conveyancers and customers are involved - there is scope to improve, perhaps by incentivising faster completions or reducing manual steps in the process.

“Brokers play an important role here. Their proactive approach in chasing progress and confirming there are no barriers to quick completion can be pivotal, especially in straightforward cases. However, their ability to materially accelerate completions is sometimes limited by external factors - most notably the pace of conveyancers and customer responsiveness. That said, ensuring customer engagement and clear communication at key stages does help to maintain momentum.”

Darren Deacon (pictured inset above), head of intermediary sales at Family Building Society emphasises the importance of the relationship between a broker and a business development manager in the process. “Brokers can assist us by giving us the full story to the case and provide documents for us to look at prior to any case submission,” Deacon said. “There are no fixed timescales but BDMs will generally get back to the broker on the same day or at the very least 24 hours. Normally we’ll be able to tell if it’s a situation that we can support. If that’s the case, we get the broker to send over the required documents and paperwork, to go through them to make sure it’s a solid case. When our underwriters pick up the case, they can see that it's been discussed and pre-agreed by a BDM, thus speeding up the process significantly.

“If we can’t agree a case straightaway, we’ll pick up the phone to one of our two directors of lending and run through the enquiry with them, and they may be able to agree an exception. If so, the broker can go online and complete the application knowing it has our approval. If an exception can’t be agreed, we can relay that message back to the broker and let them know why. This both speeds up the process and adds a human element to the review that is often missed in these situations.”