Several of the UK’s largest mortgage lenders took the decision recently to restrict the number of products they offered to those with larger deposits, following the coronavirus outbreak. Many tracker products and those aimed at attracting first time buyers were swiftly removed from the markets with Nationwide only offer mortgages to people with deposits of 25 per cent or more, with Santander and Skipton following suit.
Others, including Barclays, Halifax, Virgin Money and The Family Building Society announced they required far higher deposits of 40 per cent.
This move was prompted by difficulties in carrying out surveys – which can be critical in assessing riskier loans – as well as reduced staff numbers and increased enquiries from existing customers wanting to remortgage or take advantage of the industry-wide offer of a three-month payment holiday.
Thankfully, as the weeks wore on, as with many other financial grants, loans and options, lenders are now lifting some of their restrictions with Nationwide, Halifax, Virgin and Santander now making it easier for people to qualify. The first two lenders mentioned above are accepting 15% deposits and Santander have increased its maximum loan size from £300,000 to £500,000, whilst also reducing its fees on residential mortgages.
Lenders are now relying more on technology which is enabling virtual property valuations to allow mortgage applications to restart and the ‘virtual doors’ to reopen.
Crucially, none of these moves have any affect on existing mortgage offers and so should not have any impact on transactions where all parties in the chain have already secured their mortgage offer.
People are however still facing problems when completing due to the closure of many removal firms and the Government’s Stay at Home advice, and time will only tell as to when businesses can start moving forward again when the Government moves to phase 2 of the lockdown.
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If you’re finding the mortgage market confusing at the moment, or just need some advice on mortgage applications during the coronavirus outbreak then please contact us to speak to our mortgage specialists.