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.

  • The first 95% mortgages come back to the market
  • Is the ban of foreign travel partly driving the purchase market?
  • Record completions predicted in March

The first 95% mortgages come back to the market

Bank of Ireland and Accord are the first lenders launching their 95% LTV products this week. As predicted, they are around the 4% mark, with Accord at 3.99% and Bank of Ireland at 4.05% (with no product fee). In terms of criteria, they are near enough identical, both 5-year fixed products, with maximum loan-to-income multiples at 4.49 times and maximum borrowing capped at £500k.

  • One key difference being that Bank of Ireland’s is their product is available on all standard properties bar new builds, however Accord’s is not available on new builds or on flats… this highlights that some lenders still believe city centre flats have fallen out of favour to a degree and are riskier propositions especially at this LTV ratio and this could be indicative that they believe a price correction is due.
  • Both these offerings are launching before the Mortgage Guarantee Scheme kicks off in April, potentially to bring in the strongest propositions who have been waiting to purchase at this level.

Is the ban of foreign travel partly driving the purchase market?

We are still being inundated with enquiries and are continuing to arrange a large number of mortgages for purchases, with demand is showing no signs of abating. We believe that this is driven both by the changing trends brought on by Covid, with people looking for the more space and the like, but also as summer approaches and with foreign holidays looking unlikely, there is a huge demand for second homes and holiday properties. The holiday let market is booming this year as an increasing number of us look to book in their summer break domestically – a cursory glance shows that availability is very low, and prices are high – great news for landlords and investors in this sector, but also means that areas dependent on tourism are set to see a huge influx of consumer spending. Especially good, given how hard tourism and hospitality has been hit by the pandemic.

  • With people being forced this year to holiday at home, more may continue to do so going forward and thus this could significantly drive demand in the holiday let sector, with rental prices for these properties especially in coastal areas being driven up, making them a more attractive proposition for investors, especially when city centre rents are down…

Record completions predicted in March

We are seeing a record month of completions with many purchasers having targeted the original end to the SDLT deadline managing to complete purchases in this timeframe. We expect that this will be reflected when transaction and Stamp Duty data is released later in the year.

  • The extension should create another spike in demand and another period of high completion numbers later in the year. As it stands, we believe as lockdown opens up, demand will continue to grow in the housing market until it subsides later in the year once some semblance of normality has hopefully returned and people are no longer restricted to their own four walls…
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