Majority of lenders believe seven day switch is bad news

November 14, 2016 by Brendan O'Neill

Lenders

According to the Intermediary Mortgage Lenders Association (IMLA), more than half of all lenders believe that a seven day switching time may be a bad idea.

A seven day switch may soon become a possibility, despite doubts over regulatory checks being compromised and delayed. According to a report by the IMLA, 66% of brokers and 81% of lenders didn’t feel that the policy could be put in place without delays and risks occurring. However, the research discovered that the remortgage market is indicating strong growth for the remainder of 2016, overtaking the market for first time buyers.

The Council of Mortgage Lenders has backed up the prediction, saying that the last 12 months has seen a 41% increase in remortgage lending. However, the IMLA revealed that 78% of lenders believed that delays in obtaining valuations would impact on the seven day process, while 70% thought that regulatory requirements would be responsible for delays, and 44% thought that the affordability checks would cause problems.

In May this year, the Department for Business, Innovation and Skill revealed that it wanted to shorten the time it took to switch mortgages as part of the Digital Economy Bill. The executive director of IMLA, Peter Williams, stated that the report indicated that the industry had significant doubts about introducing a seven day switch for mortgages.

Consulting a mortgage adviser who has taken a CeMAP training course may help prevent any delays when switching to another mortgage deal, as they have the facts required to ensure a smooth process.