James Daley

By James Daley

There's been lots of media attention around the new mortgage market rules which come into force this weekend. The headlines today have been warning that the new tighter affordability checks will mean that people could end up being lent less.

That's no bad thing. I remember being astounded at the amount of money that my mortgage lender was willing to throw at me when I bought my house. Perhaps because I spend my life writing about finance, I stopped to do my own affordability check - and realised that if I borrowed every penny that the bank was willing to lend me, I'd have a very big house, and no money left to live on each month.

Taking the time to understand what people can afford to borrow is undoubtedly a good thing. But what's disappointing is that it promises to turn the process of taking out a mortgage into an even more arduous nightmare than it already is.

Last time I remortgaged, I spent well over an hour on the phone, and then had to read, sign and post multiple pieces of paper documentation back to the lender. The mortgage market is one of the remaining major areas of finance, where you can do very little online, and where lack of decent IT systems slows everything down to a crawl.

If things get worse, they may get better

Till now, mortgage lenders - like most other financial companies - have had little incentive to provide better service for customers. Most people are just happy to be accepted for a mortgage - and while they may be frustrated that it takes weeks to process, they're unlikely to move their business elsewhere. In fact, mortgage booking fees prevent a disincentive for them to do this.

But if the new mortgage rules are set to slow things down even more, surely there will come a point where customers will start to look for lenders who can process their application quicker and more efficiently. Over the next year, Fairer Finance intends to start rating mortgage lenders, and I hope that in years to come, people may be willing to pay an extra 0.1% interest on their mortgage if services like ours can show them that they'll get much better service from the lender charging a slightly higher rate.

Once companies start to feel some competitive pressure to digitise the application process, my hope is that they will finally invest in the systems to process mortgages 10 times quicker than they do today.

In the short-run, however, taking out a mortgage looks to be more challenging than ever before.