One in five homeowners have abandoned a remortgage application in the last two years because of delays and technical problems.
The research, from fintech Pexa indicates that a further 28% have persisted with a remortgage but reported experiencing “severe delays”. As a result three out of four of those surveyed (76%) said that the remortgage process was not currently fit-for-purpose.
Pexa’s analysis found that consumer experiences have worsened since the start of the pandemic as a combination of increased demand and remote working have put pressure on the conveyancing process — which relies on 150 year old processes in parts.
These delays and problems have impacted homeowners’ finances and wellbeing. Of those who abandoned an attempt to remortgage, 27% said that they missed out on a better rate as a result, while 30% reported that the process was stressful, with 23% saying it had caused them to lose sleep.
The research found that these poor experiences may affect how people remortgage in future. Almost half of those surveyed (49%) said they would simply remortgage with their current lender rather than seeing if cheaper products were available elsewhere.
Consumers are seeking innovation to improve the experience of the remortgage process. When asked how they thought the process could be improved, 33% wanted it to be faster, 27% wanted a consistent process regardless of their lender, and 36% wanted greater transparency via an online portal.
Pexa UK chief executive James Bawa says: “Normally a mortgage is a person’s biggest monthly outgoing and as interest rates rise, this will likely increase. With other bills – like energy and gas – also going up, most will now need to think carefully about how they can shore up their finances.
“Key to this is finding the right mortgage, something that’s best done by considering all available options. Unfortunately, because so many people have experienced issues with the remortgage process over the last few years, many are being put off from doing this.”
He said part of the problem is that the process homeowners go through to remortgage is disjointed and still replies on an outdated 150-year-old conveyancing process, like signing physical documents.
“In Australia – the first country in the world to create a fully digital process for property settlement – people wanting to remortgage could do so in just a day. We aim to bring this speed and simplicity to the UK, benefitting consumers, lenders and conveyancers alike as we launch our remortgage platform in the Autumn.”
Pexa was founded in Australia, and listed on the country’s stock exchange last year. Pexa is in the process of developing a streamlined “frictionless” solution, covering lenders, lawyers and conveyancers, for the UK’s housing market with software consultancy ThoughWorks.