Well one week into the new ‘Stay Alert’ phase with reduced restrictions where you can travel, exercise and people are encouraged back to work. This has also seen various industries return to work as restrictions have been lifted and the good news is that the estate agents along with valuers are preparing to return to work – all be it in a new ‘normal’.
The government announcement has certainly had an effect on the population in terms of appetite to look at new proposed homes with last week seeing the largest spike in people searching for mortgage affordability through google search engines since Brexit finished in January. The lock down has had a profound affect on people in many ways with people being in lockdown realising that the home is too small / not enough outside space or simply that they are no longer compatible with their partner and the relationship has broken down resulting in new homes being sought – Belvoir had had a busier April this year than last with people looking for rental properties even with all the restrictions in place.
House Purchase
There has been lots of interest in the house purchase market this week with lenders all piling back into the market with higher loan to value products all with really competitive rates even with the higher loan to value products. The big Lenders such as TSB and Natwest have come straight back in with physical valuation’s meaning that the pipeline cases can start to move forward to offer which is great news for the property market. The major lenders meet on a regular basis as part of the L&G mortgage club and the general commentary is that lenders have a real appetite to lend and have the financial reserves to continue to lend. They have been adapting both systems and lending criteria so ensure responsible lending so that the industry and consumer is protected as it can be from Covid – 19. House purchase rates from as low as 1.18% fixed for 2 years.
Remortgage
The remortgage market remains strong and the house sale delays have had an impact here in that some borrowers took the properties off the market and are now looking at changing lender and increasing borrowing to provide of home improvements extensions etc. There is also still a general nervousness about having a ‘stranger’ in their home to follow the government’s guidelines on how to view a property which is putting some potential home vendors off progressing sales and have decided instead to improve the current home. There are rates as low as 1.09% fixed 2 years on remortgage products.
Buy to Let Market
The rental market remains strong therefore lenders are really appealing to consumers offering some fantastic deals from fee free remortgage deals to amazing house purchase rates as low as 1.19% fixed for 2 years. Now really is the time to seriously consider looking at what properties are out there ready to increase your portfolio or maybe start your new investment venture. Q – Do you know how Buy to Let Affordability differs from residential affordability? A BTL lender will use the rental amount per month compared to the mortgage payment to work out the percentage – usually the rent has to be 125% – 145% more than the mortgage to be classed as affordable. With rents far higher than mortgage payments and most BTL mortgages being on an interest only basis this makes for a very affordable mortgage payment. You therefore gain from the rental profit and the natural gain in the property value over time – win win!
Top Concerns This Week
I want to sell my property but I am nervous of the new viewing procedures?
I appreciate these are unsettling times and you have to do what is right for you but the guidelines in place are there to protect you and your family. You can have virtual tours of the property posted as opposed to physical viewings and you can discuss your specific concerns with your estate agent to put your mind at rest as to the process – each estate agent is slightly different so the best bet is to pick the phone and discuss your reservations – you might find that your concerns are lessened following the call.
Do I need to have a much bigger deposit now as a first time buyer?
Nope you do not – lenders are coming back into the market very quickly with great rates and the minimum deposit is still 5% – although be warned that you do need a good credit score for this level of deposit – Top tip – make sure you have a credit foot print and are on the voters roll at your current address.
I am Furloughed and my mortgage has come to the end of the rate – can I still move rate or Lender?
Yes – even if you are furloughed the lender will base affordability on the reduced 80% salary – they may consider the application based on job type and the possibility of job loss in the future but as long as you are open and honest with the lender and adviser throughout there shouldn’t be a problem You can also product transfer with your current lender as they don’t reassess affordability as long as there is no type or term change in addition to the product transfer – the mortgage adviser will however check the overall affordability of the mortgage to validate his/her advice.
