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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.
Let-to-buy mortgages: The breakout mortgage type post-pandemic
Since the start of the pandemic we have witnessed a huge growth in let-to-buy mortgages… this began with buyers looking for a quick way to finance the purchase of second homes, mostly rural properties and now has become increasingly necessary for buyers, especially those who are struggling to sell city centre apartments… a recent example being a borrower who with her partner both owned a flat each in London and could not sell either so to buy a bigger place together had to let and remove equity from both meaning what was one mortgage now requires three…
Increasing number of down valuations
This links to the above story as it may be a question of price as to why certain properties are not selling, especially given the changing demands from buyers. We have seen some significant examples of down valuations of late and it is no surprise that they are flats in London… One significant example is a flat in Fulham that the owner was looking to remortgage on who saw a down valuation from £2m to £1.5m and that is with the owner having bought it for £1.5m a few years ago and spent over £250k on the property in the interim period. Another recent example and another remortgage case of a flat in Twickenham, where the buyer had the property valued by agents at circa £700k, but was valued at £610k by the lender… Also affecting let to buys is the rental a property could yield, we have had a recent example of a house with market rent in the area for that type of property being around the £3,200-£3,400 mark and a valuer coming back with a rental figure of £2,000 per month, significantly altering the borrowing potential.
Rural properties and mortgage complexities
We have seen an increase in the number of enquiries for finance on rural properties post-the beginning of the pandemic and with rural properties come increased amounts of complexities, with a variety of things to consider; from acreage limits, annexes to overage clauses… This means that we have seen a large increase in the use of more specialist lenders who will accept some of these complexities, which some mainstream lenders may discount as standard.