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Private Finance's Weekly Mortgage Memo - 1st September 2020

This is our take on news in the mortgage market that we thought was particularly interesting. 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.

At a glance:

  • HSBC stop lending over 80% through intermediaries
  • Furloughed workers facing increased barriers to getting a mortgage
  • Retirement mortgage product innovation

HSBC stop lending over 80% through intermediaries

HSBC have stopped accepting high LTV applications through brokers on account of the incredible demand they have experienced of late and the back log of cases they need to process. This means to get their market leading rates at 90% for instance, customers will have to go direct, however, it is already being reported that there is over a 4 week wait for appointments currently.

  • OUR TAKE: This presents a significant challenge to purchasers as usually an agent would want to see a mortgage offer within that timeframe, but an application would not have even been made!
  • OUR TAKE: Given the restrictions at this end of the market it is no surprise that those lenders still offering higher LTV products are facing overwhelming levels of demand. If buyers require a mortgage at that level and need to move quickly, they may struggle at this point in time or may face higher rates.

Furloughed workers facing increased barriers to getting a mortgage

It is not news to anyone that we are in uncertain times and the mortgage market very much reflects that, With the end of the furlough scheme fast approaching we have seen some large lenders such as TSB and Accord stop accepting applications from furloughed workers, whether this income is topped up by their employer or not.

  • OUR TAKE: This is a blow to the millions of workers still on furlough, but is indicative of the cautious approach lenders are taking at present and their fear that these workers may not have jobs to return to come the end of the scheme.
  • OUR TAKE: Unfortunately, there are very limited options for borrowers on furlough and so those looking to purchase or remortgage will have to hold tight until they are back in full employment.

Retirement mortgage product offered in the private banking space

With an ageing population the retirement mortgage sector is one with huge amounts of scope for growth. Private Bank Hampden & Co have recently launched a new RIO (retirement interest only) mortgage for personal clients over the age of 55. Although this type of product has been around for a while, we have not seen private banks move into this space and it is interesting as the product could be used as an estate planning tool.

  • OUR TAKE: This product offers a more bespoke approach to affordability and is suited for those with more complex finances that may not quality for standard products.

Private Finance's Weekly Mortgage Memo - 1st September 2020

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