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Lender Criteria & Mortgage Update


This weekend Coreco were in The Times talking about landlords and the Buy to Let market. Whilst the article itself posed the question as to whether landlords should sell up or reduce rents, we commented that there had been demand from property investors since the stamp duty cut, but usually from landlords with equity.

They are proving more active than ever considering that first-time buyers seem to be on a bit of a hiatus given the issues with high loan-to-value lending at present.

It was also very interesting to see Barclays change their policy around the increasing use of Airbnb. They will now allow Barclays residential mortgage customers to let out either their whole property or part of the property (e.g. a room or annexe), via approved short-term letting platforms subject to certain conditions.

90% Mortgages and Lender Criteria

Meanwhile, broker only lender Platform has re-introduced a couple of 5-year fixed products at 90% LTV which is a helpful addition to the market. Let’s hope more lenders re-join this area soon.

Although it does seem that we are finally starting to see lenders releasing more products once more, the tighter criteria around affordability, income multiples, bonuses and especially where the elf-employed are concerned is likely to be with us for some time yet.

One major lender has suggested this will be a theme of the market until 2022, so the role of the broker in identifying which lenders are able to lend the amount a buyer requires quickly and efficiently will remain as critical as ever.

It has been suggested that “as sectors such as hospitality, retail and heathcare are affected in different ways by the economic fallout of the Covid-19 pandemic, lenders could start segmenting the market by various traits.”

Google Searches

One concerning trait we have noticed is a couple of lenders using google searches on companies and using reports and even “hearsay” to underwrite with. Rumours of mergers, reduction in profits in larger companies, or talk of redundancies are seemingly being taken into account.

This shows the forensic level of analysis that lenders are employing to analyse their lending risk and is another reason why timescales are taking longer to approve cases.

Lender Relationships

The good news, however, is that Coreco are well placed, not only in keeping our fingers on the pulse of what lenders are doing but also in our relationships with those lenders to help sort out any issues or to package the case correctly in the first instance to avoid any unnecessary delays.

In situations like this, the rate itself can often become secondary and buyers should be aware that the cheapest rate is one thing, but actually going to a lender who will lend them what they want in the timescale they need is what will actually get them the home they are dreaming of.

Have a great week and remember we are here to help!

Best Mortgage Rates

In terms of mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 1.20%, (3.30% APRC) and 5-year fixes from 1.43%, (2.90% APRC) whilst variable tracker rates are around from 1.64%, (3.30% APRC).

Those looking at Buy-To-Let can now obtain products from 1.22%, (4.80% APRC) for 2-year fixed or 5-year fixes are available from 1.62% (3.77% APRC).

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