If the latest lockdown measures have left you wondering whether you can still buy a house, view properties or even get a decent mortgage deal, Greg Cunnington, our Director of Lender Relationships and New Homes, has some reassuring news.
The property market has been buoyant since it reopened in May, with a combination of pent-up demand from the initial lockdown period and the stamp duty holiday seeing record numbers of property sales agreed.
The government confirmed from 5 November there were to be four weeks of new measures representing a national lockdown in place to reduce the impact of the Covid-19 pandemic.
Buyers have, naturally, become very anxious about what these new lockdown measures mean for their purchase. We will try to address these concerns in this article.
The property market remains open
The good news, and big difference to the previous lockdown, is the government has confirmed the property market can remain open as long as social distancing is maintained and all Covid guidelines for the sector are followed.
Estate agents and construction sites are also able to remain open, meaning you can still search for a new property and should not be impacted if you are purchasing a new build.
The Royal Institute of Chartered Surveyors (RICS) which enforces surveying standards in the UK, has also confirmed mortgage valuation and property surveys can still take place.
This is very positive, as without this in place large delays would have occurred to purchase processing timeframes. It has also been confirmed that property viewings with an estate agent can still happen.
The mortgage market also remains open. Mortgage lenders have worked very hard to ensure they are operating as well as possible in the current conditions with many staff already working remotely, meaning they are set up to carry on lending as close to normal as possible.
You may find if you approach your bank directly will you struggle to get an appointment within a two week period. This is due to the operational pressures lenders are facing mentioned earlier. The good news is that as an intermediary we remain very much open for business to assist you with your mortgage requirements, and our advisers can speak to you at a time that works for you.
So, is it business as usual?
While, on the face of things, it is very much business as usual for the property and mortgage markets, it’s important to remind everybody these industries have not quite returned to how they were in the pre-Covid days.
The property market has been so busy that there has been great strain on various parts of the process, meaning that the timescales of buying a property are longer right now than pre-pandemic.
Mortgage lenders are taking longer to issue mortgage offers, local authorities are taking longer to carry out local authority searches (which are required as part of the purchase conveyancing process), and conveyancers have large backlogs that they are struggling to keep on top of which means buyers face delays.
How an intermediary can help
There is a concern that some parts of the system may come under strain in this new lock down period, presenting another small dent to timeframes in this resurgent market. This makes it more important than ever that you speak to a mortgage intermediary.
A good intermediary will monitor each lender’s current timeframes. As such, if your purchase or remortgage application needs to move quickly, for example if you have a set completion date or your current fixed rate shortly ends, we can ensure your application is submitted with an appropriate lender based on their current service levels.
This will become even more important as the stamp duty holiday end date, 31 March 21, gets closer.
We also know which lenders will require a more detailed manual assessment based on your scenario, so we can advise accordingly here also.
Most importantly, we have exclusive access to the decision-makers and escalated service teams with many lenders.
This means that by using an intermediary such as ourselves your application will be reviewed quicker than if you use a lender directly, and also that if any issues arise we are on hand to help smooth these through with the lender to avoid long delays.
Another part of the mortgage market which has changed is the number of mortgage products available.
As lenders have looked to control the number of applications they receive to help with service levels, the products available in the market has fallen. This has meant mortgage rates have increased.
The good news is the number of available mortgage options for borrowers has increased for the first time since June this year, according to data from Moneyfacts.
There are 2,404 fixed and variable mortgages to choose from, up from 2,259 in October – a rise of 145. This sounds like a lot, but this is still far below the 5,077 total products on the market back in November 2019.
Unfortunately for first-time buyers in particular, one of the main casualties here has been a large decrease in available mortgages for those with a 5% or 10% deposit.
What we have found is that the lenders are returning with mortgage products for clients with a 10% deposit on a temporary basis, whilst they look to ensure they do not take on too many applications to impact service levels.
An intermediary can ensure you are kept updated on the options available at any specific date.
Some lenders are also only offering mortgages with a 10% deposit via selected intermediaries to ensure they can manage the number of applications received.
We have access to some mortgage products on a semi-exclusive basic with a 10% deposit, so if you are thinking of purchasing in the near future please do not hesitate to contact us to speak to one of our mortgage advisers. Please click on this link to see what's available.
One consequence of the reduced mortgage product availability is that we are seeing mortgage lenders change rates regularly, sometimes more than once a week. These changes are often slight rate increases, made by lenders in order to acutely control application volumes when they are too busy.
However, we have also recently seen some very competitive rates return to the market, often only available via intermediaries.
This means that the lender with the best rate for your circumstances changes regularly, so it is important that you are speaking to an intermediary with access to as many lenders on the market as possible to ensure you will get the best mortgage product.
Please get in touch with us if you need any further advice. You can email us at AskAlexanderHall@alexanderhall.co.uk or use the contact us page on our website – click here.
This article was originally posted in What Mortgage online. You can see the original article here. Please note this will launch a new web page.