How can we help you?
We invite you to get in touch via a free, no-obligation initial consultation.
This is our take on recent news in the mortgage market. Our views are often cited in several national publications, including; BBC News, The Times, Telegraph, City AM, FT Adviser and Daily Mail, as well as a number of key trade publications, so this should keep you ahead of the curve. If you have any questions on any of these stories, or would like further information, please do not hesitate to get in touch.
Recent figures published by Halifax show that the property market is defying gravity, with the average price reaching a new record high of just shy of £250,000, with properties worth 7.3% more on average than they were a year earlier, the biggest year-on-year rise since June 2016. However, in certain instances we are seeing highly significant down valuations of circa 20%, despite these increasing asking prices. For instance a 4 bed house in a west London suburb was under offer at £700k but the lender instructed valuation came back at £550k, a flat in a Surrey commuter town under offer at £265k but the valuation was £210k and a final example of a flat in a highly desirable area in Zone 2 London was down valued from £500k to £410k – all these down valuations are around the 20% mark (21.5%, 20% and 18% respectively) and are all different property types, house, modern flat and ex-local flat illustrative of the fact that it is not just flats without outside space for instance that are facing this issue. It is quite possibly the case that valuers are being told by lenders to be cautious, but it does come as no surprise that these down valuations are circa 20% and borrowing above 80% LTV is becoming increasingly restrictive and expensive, with lenders withdrawing products in this bracket altogether…
This week again we have seen rate significant rates increases from lenders including at lower LTVs, for instance 2 and 5 year fixed House Purchase at 60-75% LTV from TSB have gone up by up to 0.40% and Virgin Money have increased their core residential products at 75% LTV by 0.35%.
The Government desperately need to get the economy moving and are implementing all the usual economic measures, printing more money, continuing with infrastructure projects, loaning to businesses and underwriting wages and will seek to relax banking and borrowing regulations… Under these 95% mortgages the government would take on some of the loan risk and banks would be able to reduce criteria so more of these loans get granted. While this may seem like good news for those looking to get on the housing ladder without a large deposit, is it really given the propensity for a huge fall in prices and the possibility of negative equity?