While much of the financial services sector is becoming faster and more automated, the property industry appears to be falling behind.
According to a story in the press earlier this year, mortgage transactions are now taking one-third longer than pre-pandemic levels1. This seems surprising, especially considering the significant technological advances made in recent years.
With the rise of online application software and artificial intelligence (AI), one would expect the trend to be going in the opposite direction. Processes should be quicker, and deals should be closing faster.
But that’s clearly not happening. Sales data from 2024 shows that the time between instruction and completion now takes an average of 160 days, which means there was a 0.6% increase in the average time to complete between 2023 and 2024.
While a less than 1% increase may not seem substantial, a longer-term comparison paints a more concerning picture. In 2019, completions took an average of 119 days.
That means the timeline has increased by 34% – an increase that could be resulting in many investors and buyers missing out on key opportunities.
So, what’s going wrong? And how can we fix it? Let’s take a closer look at what’s happening.
WHAT FACTORS ARE CAUSING DELAYS?
One major factor is the complexity of affordability assessments, which have become significantly more stringent in recent years. Since the Bank of England began raising interest rates at the end of 2021, mainstream lenders have required borrowers to provide increasingly detailed documentation.
These requirements often lead to longer processing times as applicants scramble to meet evolving criteria, or even rejection after weeks of waiting.
Valuation and conveyancing processes are another common source of delays. While valuations are typically instructed early in the mortgage journey, surveyors and solicitors are in high demand, creating bottlenecks that lenders can’t avoid.
If a property raises any red flags, such as being located above a commercial unit or because it requires conversion from HMO or buy-to-let use, then additional checks and approvals are needed, further slowing the process.
A less visible but more easily addressed issue is the reliance on outdated systems in the lending markets. Some lenders still operate on legacy platforms that don’t integrate well with brokers’ technology or even with their own internal systems.
Tasks like ID verification, document upload or case tracking are often handled manually, with email and phone calls still playing a central role. This lack of automation can lead to duplication and errors – both of which add delays.
THE IMPACT ON BROKERS AND BORROWERS
For borrowers, such delays can lead to significant stress. Earlier this month, data from the HomeOwners Alliance2 found that one in five homeowners thought about moving in the last two years but ultimately decided not to proceed with their plans.
For 35% of respondents, the moving process was cited as a barrier to them moving, leading to the HomeOwners Alliance’s CEO calling for the government to make the “process less of a Russian roulette game and more certain and streamlined” for potential buyers or sellers.
But the impact isn’t only felt by borrowers. Government figures from earlier this year show that conveyancers, estate agents and other property professionals lose four million working days each year to transactions falling through, which is equivalent to £1 billion3.
Now, this data doesn’t directly relate to brokers, but it does show that the market is not performing as it should – and it tallies with the general feeling of brokers that I’ve spoken to.
Not only will this be frustrating on a personal level to brokers, but it will be causing significant damage to brokerages’ business models. As such, it’s clear that more should be done to improve processes and ensure that deals can go through in a timelier fashion.
IMPROVING PROCESSES
The first place to start is to stop pointing at the delays and start acting on them. The sector has been dealing with additional checks for a few years now, so there’s no reason why processes can’t be streamlined to make them quicker.
For many lenders, it’s systems and processes that need updating, but it’s not about reinventing the wheel. By moving the application process online, lenders can automate some of the basics, such as document checking or ID verification, and give their teams more time to deal with the complexities that a case might present.
But it’s not just about tech. Brokers need to know where their case stands, and radio silence or vague updates when a deal is in the pipeline only adds to the stress and uncertainty the current environment is creating – especially when a client is chasing and fees are already on the table.
As such, providing clear guidelines for when processing will take place is key, as is maintaining open lines of communication via a broker support or underwriting team.
None of this is groundbreaking. It’s simply about getting the basics right. If lenders can tighten up processes, modernise their tech and keep brokers properly in the loop, then deals stand a far better chance of getting over the line without unnecessary delays.
If we want to restore momentum in the property market in the current climate, improving processing times is a very good place to start.
