Covid-19 has sent the global economy into turmoil which has impacted the UK housing and mortgage market. With the new lockdown measures in place for 2021, thankfully the housing and mortgage market is being allowed to function still.
Here at AGA Mortgages it’s still business as usual in terms of supporting and advising our clients. Never before has it been more important to get specialist mortgage and insurance advice.
Latest developments as of March 2021
Coronavirus (Covid-19) – The onset of Covid-19 had placed the housing and mortgage market into turmoil. With new lockdown measures in place from 5th January 2021, the housing market has managed to stay relatively buoyant spurred on by the stamp duty incentive for properties upto £500,000 being exempt from stamp duty.
Purchase transactions – Following the news of the new lockdown measures implemented from midnight 5th January 2021, the Government has announced that purchase transactions can proceed as normal. Completions can take place where safe to do so and removal companies are allowed to operate. If you have already exchanged contracts and are awaiting completion such as a new build property still to be built, we are witnessing mortgage lenders extending mortgage offers from the usual 6 months to 9 months but they will seek reassurance that your income and circumstances mean the agreed mortgage remains affordable.
Housing market – The Government have looked to support the housing market with the positive changes to stamp duty and this scheme is likely to remain in place until 30th June 2021.
Remortgages – If you have an existing mortgage and your current deal expires in the next 6 months it would be wise to review your mortgage now. As the industry gets back on its feet, we are witnessing bottlenecks along the way. Many lenders have adapted well and we can source lenders that can handle a remortgage efficiently which coupled with a reliable solicitor can help ensure your remortgage can be processed smoothly. Many lenders now use an AVM – Automated Valuation Model. This allows them to establish the approx. value of your home without the need to enter it. In many instances though a physical survey is required and there remains a backlog for physical surveys.
Mortgage lender reaction – Some lenders are now reluctant to use variable components of income such as commission and overtime. Also, if you have been furloughed but still don’t have a return to work date, it’s becoming increasingly difficult for a lender to proceed as we edge closer to the furlough scheme expiring. It will take a skilled mortgage broker to understand your needs and present your case to a mortgage lender. We are in constant touch with key industry figures and lenders so please contact us today should you need advice in these uncertain times.
Insurances – Despite these uncertain times, insurance companies in general are still offering their suite of mortgage related insurances such as life cover, critical illness cover and income protection plans. For those that are displaying Coronavirus like symptoms or are self isolating, they will struggle to get cover but otherwise we are observing the insurance market trying to function as normal. We are getting continual updates from our key providers and contacts within the insurance world and we are specialists in this arena too. Click here for our dedicated insurance section.
Business as usual – We are a team of 4 mortgage brokers who operate from home with access to the latest technology meaning we can still advise and arrange mortgages for our clients without the need to meet you in person. Please feel free to get in touch and we shall guide you through this minefield.
Facebook – We shall endeavour to keep this page relevant and our Facebook page will also contain more specific information coming out from lenders and the industry as it happens. Please can you like and share our Facebook page especially if you have family and friends who you think would benefit from reading this.
Government updates – Another good place for information about Coronavirus is www.gov.uk/coronavirus
Key lender updates as of March 2021 – Most lenders are trying to offer a wide range of mortgage options but still there is a reluctance to lend from around 85% Loan to Value and upwards. What follows is a brief summary of where some lenders currently sit in the market.
Halifax – They are now offering mortgages to 90% of a property value for purchase transactions. Their service levels to underwrite a case have improved and turnaround times are typically 2-3 working days.
Santander – They are now offering 90% LTV deals and are back lending at 75% LTV for Help to Buy deals. Service levels were dreadful but they have improved this by only offering 60% LTV to self employed applicants which has dramatically reduced their time spent on reviewing complex cases. We understand this was a temporary measure and will be addressed soon.
HSBC – They will lend to 90% LTV and were the dominant player at 90% LTV in 2020 and the champion of first time buyers. Service levels remain excellent.
Natwest – They are now back lending to 90% on purchase applications. They are continuing to use all components of an applicants income and their service levels are now good.
Nationwide – They had initially paused lending over 75% LTV on new customer purchases, remortgages and first time buyer purchases but have returned to 90% LTV. They will lend to 90% LTV but have strict criteria for this, please contact us for full details. Service levels are fair although for cases where the applicant is self employed or borrowing in excess of 85% LTV, there is a deal for assessment.
Barclays – As of 2021 they are lending back at 90% LTV and service levels are better than most competitors. They have recently increased their income multiple to 5 times income for certain situations.
Service Levels – Service levels amongst mortgage lenders as of 2021 is mixed but we have seen noticeable improvement amongst the mainstream lenders. Many niche lenders seem to be coping well with working from home and more complex underwriting. Many cases are getting delayed if a physical survey is required and in many instances, it’s only by making an application that the lender advises on whether a physical survey will be necessary. If your mortgage needs reviewing within the next six months, we would urge you to get in contact ASAP.