The Government has recently introduced a Stamp Duty Holiday announcement ending in March 2021 with hopes to get the Property Market back to some form of routine after the recent Covid-19 lockdown.
If you would prefer to watch our moneymanTV YouTube video on the current mortgage market (16th July 2020), feel free to do so. We always keep our audience up to speed with the current mortgage market, so we decided to cover most of them on our channel to explain the basics and predictions for the market. We have a full dedicated playlist on our channel so make sure to check it out here.
How it works is the Bank Of England has set its interest rates at one of the lowest that the Property Market has seen for a while to give potential buyers the chance to get on the property ladder. Still, with recent changes in place, however, it means lenders are only accepting mortgages with a 15% deposit and higher.
In any case, there are alternative ways to get onto the property ladder such as new builds being okay with 5% deposit from your funds, topped up to 25% with the Government Help to Buy Equity Loan.
Lenders will drift in and out of offering 90% Loan to Values to the public, but these will only be available for a limited amount of time due to the Lender’s discretion. For the Mortgage Market to get back to its normal state, in any case, we need the ‘big banks’ to get back to normal, as right now, it’s the lenders who are pushing the boat out to try and make the Mortgage Market accessible to all that they can.
We are seeing that lenders and banks are restricted like most companies during lockdown due to trying to adhere to social distancing regulations. Meaning that offices have limited full capacity because they are struggling to get a sufficient amount of people back into the office.
Further concerns are job loss data, and lenders don’t want to have to repossess any customers who might end up in negative equity. These reasons are holding lenders back from offering the full range of the mortgages that they can.
Demand is still outweighing supply in terms of residential property so no changes have been occurring to house prices yet and there are no signs of this changing soon. However, we are noticing that multiple people are going for the same houses that are available so it may be a good move for applicants to obtain Agreement in Principle before making an offer.
If you were aiming to apply for a mortgage and have already saved up the 10% deposit, then it would be advantageous to keep on saving to a 15% deposit. In any case this would also mean interest rates would be lower when the time comes to applying for a mortgage so that it would work out in your favour.
Our Mortgage Advisors in Manchester are still available if there are any questions that you may have regarding the new mortgages updates, these can all get answered in a free mortgage consultation that we offer to all our customers.