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Tightening bank lending policy is now viewed by many brokers as the main threat to their business – even more so than sluggish turnaround times.
According to a recent Mortgage Business straw poll, 35 per cent of brokers said lending policy changes are the biggest threat to business.
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This was ahead of servicing times (30 per cent), unemployment (21 per cent) and the economy (14 per cent).
“Lending policies are a concern, [particularly] when they are constantly changing,” said Shannon Foley of Multiple Property Solutions.
“You can have a deal just a week away from going through and then the policies change.”
While the string of dramatic changes across lending criteria has been difficult to deal with, many brokers recognise the need for tighter policies however.
“I think we a creating a safe haven and ensuring borrowers don’t end up in mortgage stress,” said Ms Foley.
“Ensuring young people develop good savings patterns is also a good thing,” she said.
Ian Simpson of Mortgage Force said that lending policy changes had dampened demand but he conceded that it was the responsible approach.
He believes a more prudent approach to debt is also becoming accepted by borrowers.
“On the most part it hasn’t been too hard with clients. Only very marginal borrowers have really had to delay purchases and that’s probably 5 or 10 per cent of my clients. I think people are already realising the benefit of starting with a decent deposit.”
Brokers are also confident that the bulk of lending policy changes is now behind them.
“My view is that the economy is stabilising and I wouldn’t expect to see any further tightening in lending policies,” said Ms Foley.
“It would be like shutting the gate after the horse has bolted,” Mr Simpson said, who believes policies should have been tightened up a long time ago.
“We’re almost two years into the financial crisis now and seeing the very early signs of an upturn. It doesn’t make much sense to tighten policies now.”
