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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.
Low LTV mortgage rate increases, and High LTV rates decrease
We have continued to see rate increases in the low LTV mortgage sector; however, these increases are not overly significant, some 0.05% and 0.1% here and there, and more often than not this is just – lenders bringing things in line with their peers. The more interesting part of the market we feel at the moment to watch is the high LTV space and generally we are seeing rates in the space now similar to, if not slightly more, than pre-Covid levels where the base rate was 0.75%. This means that lenders still have room for movement in this space and the lenders that offered 90% and 95% rates early will be reaping the benefits with their 3%+ margins they made on many of those loans.
Do Barclays know something we don’t?
Barclays last week altered their rental calculator stress rates for buy-to-let mortgages – these were increased (meaning their calculator is now tougher) to reflect “current market conditions”. Across the rest of the market, we are seeing other lenders put into place more flexible criteria and by all accounts the rental market is booming too, with flats in London for instance being snapped up the same day the listing went live, so it begs the question, do Barclays know something we don’t?
Microflats present large mortgage difficulties
The Guardian released an interesting article with regards to the increasing demand for very small studio apartments, often these are marketed as pied-a-terre style properties, however some see them as the only way they can get on the property ladder in the short term and be near city centres or transport links and also investors interested in them as they are cheap. These properties site below the National Minimum Standard size being set at 37 sqm and we see these types of property both in new builds and old converted buildings alike, but it is not this that present the issue with borrowing…