Viewing restrictions have been lifted in England and the property market is moving again. Many lenders are resuming higher loan to value mortgage products. Here’s why now is a good time to look for your dream home…
According to a consumer survey by property website Zoopla, almost 60 per cent of UK home buyers are continuing with their plans to search for their next home. With viewing restrictions lifted, new sales in England have risen by 12 per cent.
Zoopla experts say that many people have re-evaluated their existing properties during lockdown. Some homeowners have decided their current property doesn’t quite meet their needs. This is of course good news for the property market.
So what about lenders? Are they still willing to lend? It’s true that lenders were more cautious during lockdown. Some scrapped certain mortgage products or only offered loans to borrowers with large deposits. Many lenders were having to manage workload while staff were working from home. Some chose to focus only on existing applications, especially with valuations on hold. Now lenders have adapted to the situation and with valuations resuming, they can lend with more confidence. Consequently, it’s good news for buyers – higher loan to values (the size of a mortgage in relation to the value of a property) are being reintroduced by many lenders.
Higher loan to values
During lockdown, Nationwide, the UK’s biggest building society, stopped offering deals above 75 per cent loan to value for new customers. It is now resuming loans at 85 per cent of loan to value. Halifax is increasing its loan to value level from 80 to 85 per cent. Yorkshire Building Society is updating its mortgage lending policies and will be offering up to 90 per cent loan to value on house purchase and remortgage applications. It will offer up to 85 per cent on new build purchases. Accord Mortgages is reintroducing several mortgage products including 90 per cent loan to value deals. Santander is increasing its maximum loan size from £300,000 to £500,000.
There’s more good news. With the base rate (the interest rate set by the Bank of England for lending to other banks) now at an all-time low of 0.1 per cent, interest rates on mortgages are extremely competitive.
Starting the house hunting process
If you were thinking of applying for a mortgage or remortgaging before lockdown, you might want to start the process. We recommend getting your paperwork organised (bank statements and salary slips for the past year) and searching for properties online to compare prices. If you have been furloughed, you can still apply for a mortgage but lenders will only take 80 per cent of your normal income into consideration. They may require your employers to confirm that you will still have a job after the furlough scheme.
We also recommend talking to a good mortgage broker with access to a variety of competitive mortgage products. We’re here to help so feel free to get in touch.