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This is our take on what is currently happening 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.
Major changes to BTL criteria
Two buy-to-let lenders have made significant changes to their criteria of late, increasing the LTV level they are willing to lend at. TSB have increased their max LTV to 80% and Foundation Home Loans to 85% – a very high LTV on a BTL product, with only 2 others in the market at this level and moreover they are offering the most competitive rate at this level.
How will the mortgage market respond to Omicron?
Recent data from UK Finance illustrated an estimated and record gross lending of £316 billion in 2021. While this is predicted to fall by 11% in 2022 to £281 billion, this should not be considered indicative of reduced demand in the mortgage market going forward, rather it highlights the extent to which the SDLT holiday drove demand and brought purchases forward. The tail end of 2022 and the first 6 months of 2023 will see a huge amount of 2-year fixed rate products come up for remortgage from borrowers who purchased in the midst of the pandemic when demand and the race for space was at its zenith and we suspect in 2022 we will see renewed city centre demand, which we are already seeing in flats across the UK. According to Rightmove, valuation requests from homeowners are 19% up on this time a year ago and this suggests there will be a lot more much needed stock come on to the market in the New Year. We believe we will see an increase in demand from borrowers now that the Bank of England has begun to raise rates to lock in savings now, rather than run the risk of waiting and the potential restrictions that could come into place linked to the Omicron variant could push more potential buyers into rural and suburban areas and continue to drive second and holiday home purchases. Ultimately, we cannot see the new variant having a detrimental effect on the market, given the resilience it has exhibited throughout the pandemic.