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Private Finance's Weekly Mortgage Memo - 26th April 2021

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.

  • Nationwide increases flexibility in bid for increased market share
  • Mortgages for purchases seeing a slowdown in demand
  • More good news for sustainably minded borrowers
  • Is prime central London set to boom in the coming weeks?

Nationwide increases flexibility in bid for increased market share

Nationwide have recently both increased their maximum loan-to-income ratio for first time buyers to 5.5 x income (with a few caveats) and are now also considering variable income again, bonus, overtime, and commission, where they had previously stopped due to Covid. This change highlights both their confidence in the post-Covid housing market and is arguably a bid for an increase of market share as these criteria changes make them a highly attractive mainstream lending option for a number of borrowers.

  • Lenders are becoming increasing competitive at the present time, with increased flexibility and reduced rates. We suspect that the trend towards increased flexibility from lenders will increase significantly in the coming weeks and months and Nationwide stands to benefit from increased business in the short term on account of these changes, especially the increased LTI.  

​Mortgages for purchases seeing a slowdown in demand

April has seen a significant decline in purchase enquiries with this slowdown being illustrated in March too with remortgage business taking up a larger percentage than purchase business for us for the first time since the housing market re-opened following the first lockdown.

  • While this slowdown has been expected, the extension to the SDLT holiday has pushed it back – we believe that most significant in this however is the lockdown easing which has seen people’s priorities shift away from the home and out and about.  
  • We do not think this will be permanent, but that we will see another surge in demand come an increase of supply to the market and more demand in cities again interlinked with the easing of lockdown restrictions. Some of the biggest gains in house prices is likely to be city centre properties and buyers and investors flock back and commuting returns albeit less days each week in most cases.

More good news for sustainably minded borrowers

Nationwide have joined NatWest (and other more specialist or less attractive products) from today in introducing a green product range encouraging borrowers to purchase more sustainable properties and existing homeowners to consider and increase the energy efficiency in their homes. This new product offering includes a Green Reward cashback for property purchases with an EPC Standard Assessment Procedure rating of 86 or more and a Green Additional Borrowing scheme enabling clients to make green home improvements to their existing property.

  • With heating our homes alone accounting for over 10% of the UK’s emissions we are firm believers in products such as these and very much they become more widespread across lenders.

Is prime central London set to boom in the coming weeks?

With the UK’s vaccine rollout in full swing and the roadmap to lockdown easing going well and without any significant issues, it is now becoming possible to imagine very limited restrictions come this summer. Given London’s position as a major global city and highly desirable for foreign buyers anyway, this is likely to drive significant interest in the property market here, as wealthy buyers from across the world will be seeking a place where they can live safely that also has all the other benefits that London already has to offer...

  • We believe that prime central London property is set to see significant demand in the coming weeks and months with prices rises to match… 

Private Finance's Weekly Mortgage Memo - 26th April 2021

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© Private Finance Limited, 2021. Private Finance provides independent mortgage advice and arranges individual mortgage solutions for clients. Private Finance is a trading style of Private Finance Ltd, 29 Lincolns Inn Fields, London, WC2A 3EG, registered in England no. 3855776 and its Appointed Representatives. Private Finance Limited is authorised and regulated by the Financial Conduct Authority (FCA registration number 310566).

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