IMLA supporting members to build new dialogue with mortgage market on capacity challenges

24 September 2020

  • IMLA will be surveying members over the coming weeks to identify the specific challenges lenders face that are putting a strain on service levels
  • The trade body wants to use these insights to draw possible solutions and work together with intermediaries to address the capacity challenges currently experienced in the mortgage market

The Intermediary Mortgage Lenders Association (IMLA) is reaching out to its members to gather new information on the practical impact of COVID-19, with the aim of identifying and addressing the specific issues that have affected service levels in the industry. The Association hopes to draw on these insights and work together with industry stakeholders, including intermediaries, to identify possible solutions to the current challenges that are causing bottlenecks and delays in mortgage applications and help manage the expectations of borrowers and all those involved in the process.

The mortgage market has experienced unprecedented levels of demand since reopening after the COVID-19 lockdown earlier this year. Ongoing high levels of activity are a positive sign that the market remains resilient despite the country facing its most significant economic, health and social crisis since the Second World War. However, this demand has also presented challenges for lenders.

While lenders are trying to manage these record volumes of business, they have also emphasised their commitment to acting prudently and responsibly. High levels of uncertainty over both the economic climate and individual applicants’ incomes or job prospects have led lenders to take a more in-depth look at applications to ensure customers can afford their mortgage in the future. This has meant that more applications have been individually assessed by expert underwriters who have in some instances needed to ask more questions to probe a borrower’s specific circumstances. This has inevitably served to lengthen the time it takes to complete mortgage applications – but with the aim of making sure that borrowers are served responsibly and well.

However, each lender has been impacted differently by the COVID-19 crisis and IMLA will survey its members in the coming weeks to understand exactly how each business has been affected and the main influences affecting their service levels. The Association then hopes to draw together these perspectives in a bid to identify possible solutions by working together with industry stakeholders, including the Association for Mortgage Intermediaries (AMI).

Kate Davies, Executive Director of the Intermediary Mortgage Lenders Association, said:

“We are currently seeing very high levels of demand from borrowers, prompted by the pent-up demand created during the initial stages of the COVID-19 crisis, and further fuelled by the temporary Stamp Duty holiday. This demand is inevitably creating huge challenges for lenders and intermediaries.

“The focus of lenders remains, as it should, on acting prudently and lending responsibly within their regulatory commitments and – ultimately – to protect borrowers. However, the current situation is clearly continuing to impact service levels and we need to identify the main reasons for this, and try to find ways of alleviating the logjams. We also need to be clear about what is realistically achievable and try to manage borrowers’ and intermediaries’ expectations in terms of what lenders can deliver. The COVID-19 crisis has emphasised the need for borrowers to be given good advice about their mortgage options, and I believe that most borrowers will understand and appreciate that good advice and responsible lending may take a little longer in these exceptional times.

“We now know that we all face further restrictions on our lives – probably for another six months. But we also know, from the way the industry has coped so far, that we are up to the challenge. We owe a lot to the valuers, who started getting straight back out into houses and flats when the market re-opened in May, and to the intermediaries who have responded to enormous demand from borrowers, and helped smooth the process for lenders by continuing to package and present cases excellently, despite the difficulties of working from home. There will inevitably be further bumps along the way during the next few months – but I’m confident that we can work together to improve service levels and support our intermediary partners whilst maintaining responsible and prudent lending.”

Robert Sinclair, Chief Executive, Association of Mortgage Intermediaries, said:

“We have an incredibly busy mortgage market at the moment. While the strong levels of activity we are seeing is certainly a positive sign of the sector’s resilience, it is continuing to present difficulties for lenders as they battle demand.

“Whether we are advisers or lenders, we are all in this market together and it is vital that we work in partnership to find ways of overcoming these difficulties. This is a welcome step from IMLA towards highlighting and resolving factors that are impacting service levels for customers and we are eager to work jointly with its members as they evaluate their findings and identify solutions to the current challenges we are all facing.”

Nick Seymour, Rostrum
Tel: 07551 129 500

Notes to Editors

About IMLA

The Intermediary Mortgage Lenders Association (IMLA) is the trade association that represents mortgage lenders who lend to UK consumers and businesses via the broker channel. Its membership of 43 banks, building societies and specialist lenders include 18 of the 20 largest UK mortgage lenders (measured by gross lending) and account for about 90% of mortgage lending (91.6% of balances and 92.8% of gross lending).

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