Home ownership is still a relatively new innovation in the UK, as is applying for a mortgage.
Before 1832 any man who held freehold property in the UK, worth at least 40 shillings a year, was entitled to vote in their home county. At most, that was 435,000 people. Today there are over 17 million owner-occupied properties in the UK.
Why am I bringing this up? Because the Husband and I had to remortgage our home last year, and what was supposed to be a relatively simple process, turned into something bigger than Ben Hur, and I wanted to understand why.
The modern mortgage, as we know it, has only been around since the 1930s, whereas the concept of a mortgage has been around much longer. There are English common law documents that mention mortgages as far back as 1190. These documents layout exactly how the creditor is protected in property purchase agreements.
The same is true today.
Essentially a mortgage is a loan secured by a property. And the sad fact is, until you pay off your mortgage and own your home outright, the only security in property lies with the person who lent you the money. And the number of hoops you have to jump through, boxes you have to tick and forms you have to fill out just to get there, is astronomical.
With the plethora of payday lenders and the ease with which they appear to give out money, I don't understand how getting a mortgage (or remortgaging in our case), in this day and age, is such a drawn out and convoluted process?
Given as well that we have come so far with technology, it beggars belief that mortgages have been stuck in the technological dark ages for quite so long.
The truth is it isn't mortgages per se, it is the banks that manage them that are the ones holding everything back.
In 2014, glitches with IT systems left many customers unable to access their money. At the time, the RBS chief executive blamed chronic underspending on its computer systems as the reason for the issues. But another study showed an over reliance on marketing research had hindered others. Essentially the banks chose to react to customers' fear of online fraud, rather than look to the future and embrace the development of global banking technology.
I understand that banks are more cautious now and that they are less prone to risk taking, following the global financial crisis, and that they have to adhere to even more regulations than ever before. But the biggest impact of technological growth, in recent decades, has given rise to the 'on-demand economy'. And that can't have bypassed every high street bank.
So if it's all about UX (user experience) nowadays, where experience and speed are key to a business' success, yet it still takes my cheque up to seven working days to clear (or our remortgage three months to happen), I'd say the banks have a lot of catching up to do, if they want to stay in the game.