The Stamp Duty holiday has tellingly exposed the mortgage industry’s Achilles’ heel: processing times.

Even before the Chancellor’s tax stimulus, lead times were long, but now they have become painfully so.

The consumer website moneyexpert.com reported at the end of last year that Santander was taking 26 working days to handle landlord mortgages when processed through brokers and 21 days for residential.

Nationwide’s buy-to-let operation was taking 25 days for a standard buy-to-let mortgage and 34 days to handle portfolio and limited company cases. They were not moving much faster on standard residential applications either, with them taking 23 days.

The Chancellor’s tax holiday that stands to save buyers thousands of pounds has demonstrated what many – me included – have been saying for a while.

Unlike other industries that have the ability to expand when demand surges, this industry simply finds it difficult or just cannot adjust. Its processing back office is not up to the job.

So, when lenders literally have customers queuing up at their door, all they can do is tell them to wait longer, or unwittingly encourage them to go away. Obviously, this is not the sort of approach you want if you are keen to make the most of buoyant market conditions.

Many of those punters are likely to lose interest and go to a provider more able to process swiftly, or forget about the whole thing. Given that the tax holiday is set to end in March, the latter is bound to be the option for some of them.

I know that I am skirting over the genuine issues that the pandemic has thrown up regarding additional borrower due diligence, and I am aware that there are statutory processes that slow things down specifically in mortgages, but this does not excuse the status quo.

Lenders still have armies of people wasting too much time on mundane tasks that have been automated elsewhere some time ago using Open Banking and underwriting platforms.

Look at the personal loan sector, where manual intervention is limited to areas where a human touch is actually desirable.

This has enabled the sector to process applications in minutes and hours rather than days. The checks surrounding ID and affordability are performed automatically and in seconds.

Operators in that space know that leads are precious and easily lost if you keep them dangling for any length of time.

The weakness that this tax holiday has exposed in the mortgage sector is one that is going to become more glaring as time goes by.

The instant gratification of today’s consumer marketplace means applicants are no longer as pliable as they used to be, and no longer willing to put up with the process.

Whilst, in the past, the industry could have said ‘sorry this is the way it has always been’ and got away with it, it cannot do that anymore. Not now that consumers can make multiple applications simultaneously and go with whichever one comes up with the goods first.

Why would anyone these days make one application and sit back and let everything run at the lender’s pace? Borrowers now realise that they have leverage.

There is nothing to stop them pursuing multiple applications because the internet makes it easy, only leaving a ‘soft’ footprint on their credit file when using a sourcing system.

A footprint that cannot be seen by other lenders because it does not classify as a credit search and won’t be recorded as one until a full application has been completed.

There must be a substantial and growing number of wasted applications as a consequence of this: lenders that I speak to say that this is happening in a systematic way now that there are more and more routes to obtaining a mortgage. Admin hours are being wasted.

And that can only get worse as more traffic moves online.

In addition to the portals that are already being used, there are a growing number of FinTech start-ups filling the gap in the market for digital mortgages that provide consumers with an easy interface and rapid turnaround.

The Stamp Duty holiday and its resultant backlog of applications, I am afraid to say, is a timely reminder that established mortgage lenders need to shorten their often long processing times as a matter of urgency.

David Wylie is commercial director of LendingMetrics