It's not as busy as it was last year, but it's getting busier, certainly. The thing is, even if you send your application to Liverpool or Peterborough, it could and probably will get transferred....so it depends where it ends up.
Remember though, the Check & Send thing is deceptive. I've had to deal with a zillion people who want to know why their passport application hasn't been processed in ten days time. Nobody at the Post office has proper training in how to examine applications. They basically check your fees are paid, you'se sent in some photos and if you are lucky, they will make sure the most obvious part of the form is filled in. But if one minor thing is wrong with your application (eg, you're countersignatory needs to be contacted, your credit card payment does not go through, more documents are needed etc) the ten day turnaround goes out the window.
On saying that, if your application is correctly filled in and supported, 26 days is a generous amount of time to get it sorted.