CORONA MORTGAGES
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Chris Holden offers advice to homeowners, or people wishing to buy or sell month is a long time in this Coronaworld. Certainly in the housing and mortgage market.
assess income through the lockdown. Expect testing questions about the viability of your business in the future.
We have seen a huge surge in houses going on the market, viewings and applications. Rightmove reported their busiest day of website traffic in May. I, as a mortgage broker, have been inundated in the last two weeks with enquiries and applications.
The better news is that common sense is prevailing around missed credit payments during the crisis, those with furloughed income and those deferring mortgage payments have been treated fairly. Brokers will be able to advise more specifically around these issues as more applications are submitted.
This is all, of course, good news. Those caught in limbo having sold or bought a new house have been able to move in or out, and estate agents, conveyancers, removal companies — have all been able to bring staff back in, and off furlough. As with the rest of the world, the housing market has changed, and it is important to know where the new challenges, and of course opportunities, will lie. The housing market will only be as strong as the mortgage market that drives it. High Loan to Value Lending (LTV) will be tough and this will impact the first-time buyers more than most. Firstly, very few lenders have committed to 90% plus LTV mortgages. Indeed, Accord (part of the Yorkshire Building Society Group) were the first high street lenders to return to 90% but had to withdraw their products due to the huge demand. The big players are still biding their time. Secondly, whilst application numbers have increased exponentially, this does not mean all those applications are being agreed. Houses are being down valued by cautious surveyors and underwriters are scrutinising income forensically. The self employed are particularly vulnerable here – whilst previously 2 years of accounts would have sufficed, now lenders want to see 3 months of bank statements to 30
And as for the opportunities – there are some and they are significant. Borrowing money is as cheap as it has been in a generation. Fixed and variable rates commonly well below 1.5%. House prices seem likely to flatten as the year progresses which will help those starting on the ladder and from a local perspective I expect the private student housing stock to be released back into the market for residential purchase which will also control prices. For those not wanting to move, sell, or buy, and who have had to defer mortgage payments, it seems that lenders continue to take a practical view on extending mortgage holidays. It is not in their interest to have a swathe of repossessions on their hands, and they continue to be under pressure from the government to keep helping their customers. Whatever your situation, it is important now more than ever to take professional advice. Any broker worth their salt will not charge for anything other than a full application, so if in doubt pick up the phone and have a chat. We are here to help. Chris Holden is managing director of At Pace Mortgages info@apmortgages.co.uk 023 9236 9441
