Let me take you back in time to almost 19 years ago when there was an announcement made within the specialist mortgage market which remains, for me at least, one of the most memorable. I’m talking about the launch to the One Minute Mortgage by BM Solutions.
There may well have been similar offerings come to market swiftly on the back of this but with BM proclaiming itself to be the first lender to offer virtual, online offers across its full specialist lending product range – sub-prime, buy-to-let and self-certification – this is something which certainly stood out for me at that time.
Moving swiftly on from the terms sub-prime and self-certification, this offered brokers the ability to submit mortgage applications online and receive a ‘virtual offer,’ subject only to valuation, in less than one minute.
Let me reiterate that this was back in 2003 when technology within the mortgage market was still in its relative infancy, so how far have we actually come since then?
For many years, technology was the buzz word across the mortgage market. The influx of technology providers helped make it easier for intermediaries to source, place and track applications. It has evolved greatly to aid in the streamlining of back-office requirements, compliance procedures and in better managing and protecting client data, amongst many other positive features.
Sadly, there has been little in the way of any dramatic digital progress in the homebuying journey. Although some encouraging news recently emerged from the HM Land Registry with the launch of a new strategy to deliver a more efficient, fully digital property market via the delivery of digital tools and automation to speed up the homebuying process.
The Land Registry admitted that the current homebuying process “does not meet some basic expectations for a modern, professional service” and says the main aim of its strategy is to “urgently build [its] resilience to volatility in the property market which is the leading cause of application backlogs”.
Currently, one in five applications to HM Land Registry (more than 3,500 applications every day) require it to follow up with the applicant to resolve an issue in the application. This increases to around two in three for more complex applications. Under the new strategy, many more land registration processes will be automated to significantly improve service speeds and allow more focus on complex applications.
An investment to automate most changes to the land register by 2025 will result in the end-to-end automation of up to 70% of all updates to the register. It estimates that by 2025, automated applications will be completed within one day – many of them in seconds.
A lack of upfront information can cause up to 8% of property transactions to fall through, costing the buyer up to £2,700 per transaction. Therefore, Land Registry plans to digitise the information conveyancers need most and allow people to access information on ownership, location, mortgages, local land charges and more in real time.
One telling comment around this launch came from chief executive of HM Land Registry, Simon Hayes, when he stated that “with property transactions taking record time to complete, it is imperative that we work as partners to innovate and remove friction so that the process is as quick and painless as possible.”
Collaboration is key to solving the bigger issues in the housing and mortgage markets and the more that tech providers can work with a variety of like-minded links in the homebuying chain, the better for everyone concerned. And let’s hope that this strategy delivers on its digital promises.
Neal Jannels is managing director of One Mortgage System (OMS)
