Last week the Government revealed it could introduce proposals that would allow borrowers to switch mortgage lender in just seven days. This is what our readers thought of the idea:
Seven-day switching? Why does Govt never think of practicalities?
The reality of checking documents and underwriting alone takes longer than seven days.
I suppose the question here is: at what point does the stopwatch start ticking? If it is only once a lender has the application, documents and valuation, then seven days is still a push given the legal issues.
Many lenders require five days’ notice for funds to be released and others take longer than that to issue redemption statements. If you ask the ‘free legals’ solicitors to do anything quickly, a blank look is often followed by a reason why it cannot be done.
The Government can introduce anything it wants but rarely does it have the full practicality considered when it does make such changes.
Business secretary doesn’t know how the mortgage market works
The business secretary should think before he opens his mouth and makes a ridiculous statement like that. It can take some lenders seven days to look at a payslip that has been sent to them. He really has no clue how the mortgage market works.
Another ill-thought-out idea – regular switching could harm credit ratings
It is fairly typical of this government to have another ill-thought-out idea that, as Mark Harris points out, will be almost impossible to implement and may work against the consumer in the long run. Switching frequently could damage a borrower’s credit rating if numerous credit checks are done.
‘Pinch, punch, No more gazumps.’ Hasn’t that Hip sailed?
‘Gazumping is dead. Long live the upfront, legally binding acceptance of an offer, which would take the seller and buyer through to completion.’
When I read this, I could not help thinking of the rhyme: ‘Pinch, punch, first of the month, and no return.’ Effectively, once you have agreed your sale it is agreed, and there are no ‘returns’ with higher offers. At least, that is the message that came through earlier this month as it was revealed the Department for Business, Innovation & Skills had apparently been discussing with estate agents the potential to outlaw gazumping.
For those who do not know, the BIS is about to issue a ‘call for evidence’, which is focused on consumers’ experience of the homebuying process in an attempt to make it simpler, quicker and less costly, and ensure fewer transactions collapse before they reach their conclusion.
Apparently, 200,000 transactions do this every year.That is a big number and the BIS has a job on its hands because, as we all know, the system of buying property in England and Wales can be, shall we say, messy.
So what can be done? More information upfront for purchasers? More transparency between all parties? An undertaking to get important aspects done before the house is even on the market? We have been here before, haven’t we? And it was called the Hip – although I suspect a government that withdrew the packs would not want to reintroduce them.
Talking specifically of the conveyancing process, what can be done? After all, when it comes to a chain, the fastest can work only as quickly as the slowest. Perhaps, therefore, transparency on key performance indicators for individual conveyancing firms would help, as would, of course, some advice to consumers on who to use and who to steer clear of.
Overall this is a huge challenge for the BIS because it is trying to pull together so many disparate parts. I therefore suggest that, post-‘call for evidence’, it narrows the scope of its work considerably. Try to improve a few areas a lot, rather than try to improve all by a small margin. If it opts for the latter, I suspect we will not move far forward at all.
Harpal Singh, Broker Conveyancing