In 2019, mortgage lending reached a whopping £70 billion in the UK. While it’s unclear how the 2020 numbers will look, Covid-19 probably means it won’t be as high. During the height of the pandemic, lending decreased as social distancing restrictions slowed the industry down.
However, as we come out of lockdown, lenders will be more eager to lend, which is great news if you’re thinking about moving home. To get an idea about the state of play in the mortgage industry, we asked Rachel Atwell, our chief mortgage advisor, to give us the lowdown.
Here’s what Rachel had to say:
Has the mortgage market changed during the lockdown?
Many lenders pulled their rates during the lockdown. The lack of physical office, which led to an increase in remote working, was one of the primary reasons for the pull. This meant speed and customer service reduced, and lenders couldn’t predict applications-to-offer timescales – something that ranks high in importance for anyone buying property.
The lockdown also meant valuers were unable to visit properties, which further slowed down processes. A mortgage valuation is different from a market valuation. And, while desktop valuations were performed in some cases, they weren’t watertight enough to work for every property.
As restrictions on the lockdown ease, a growing number of lenders are issuing new rates and re-entering the market. They have had time to put measures in place and have created secure safe working environments.
Is the stamp duty holiday affecting lender criteria in the mortgage market?
From a lenders’ perspective, the stamp duty holiday shouldn’t have a major impact – though it couldn’t come at a better and could provide buyers with extra cash to spend on bricks and mortar. The surplus could lead to a lower loan-to-value (LTV), which would equate to a decreased rate. Or it could see buyers opting for high-priced properties. Both scenarios are beneficial to house buyers around the UK.
How likely is it that I can get a 95% LTV mortgage at this time?
The 95% mortgage market still hasn’t recovered from Covid-19. However, the mortgage market is changing daily, and things could change for the better very soon. Watch this space…
Can I get better rates if I go to lenders directly or should I use a mortgage broker?
Over the last 10 years, many lenders have gradually moved away from direct lending and have moved into the broker market. Brokers, for example, write more business for Natwest and Halifax – who are some of the largest lenders in the UK – than they write themselves.
This often results in mortgage brokers being offered better products for you to take advantage of than if you went directly to the lender. Borrowers also get access to a more substantial chunk of the market with a broker, which isn’t the case if you go straight to the lender.
About Mashroom Mortgages:
We work with Mashroom Mortgages to give our clients access to expert mortgage and protection advice. Mashroom Mortgages have access to over 12,000 mortgages from 90+ lenders so they can find the right mortgage to suit your individual needs.
The expert advice they offer, combined with the volume of mortgages that they arrange, places them in a very strong position to ensure that our clients have access to the latest deals available and receive a first-class service.
They will take care of everything from explaining all of your options and helping you select the right mortgage, to choosing the most suitable protection for you and your family and handling the whole application process.
Call them on: 0333 300 2526
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
Mashroom Mortgages is a trading name of Emash Ltd which is an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited which are authorised and regulated by the Financial Conduct Authority. Emash Ltd. Registered Office: 21 Navigation Business Village Navigation Way, Ashton-On-Ribble, Preston, Lancashire, England, PR2 2YP. Registered in England Number: 11735831.