Coreco were in the national press again last weekend, this time in The Mail talking about the current mortgage market and what a crazy place it is right now.
Although we are starting to see some alarmist headlines, and there is certainly a degree of “mortgage mayhem” out here, it is important to look past this and really understand what is happening.
As we mentioned in the article, ‘Lenders have been increasing rates to try to stem the tide [of applications] and then cutting them again when they have got to grips with service levels.
‘It makes it incredibly difficult for borrowers as things are changing so quickly that sometimes even the lenders themselves can’t seem to keep up.’
Interestingly, the article goes on to report that only 59% of offers in May and June resulted in completion compared with 79% in the first three months of the year, according to the Intermediary Mortgage Lenders Association.
It all illustrates the need for early financial advice from a professional broker so that prospective buyers know exactly what they can afford in terms of both affordability and deposit in the new world and, importantly, which lenders will be able to move quickest.
It is all very well picking a lender with the cheapest rate or just using your own bank, but if that company will not be able to produce a mortgage offer for 8 weeks the property could be long gone by then.
Despite all this, there is still a choice and a good choice at that. We talk about rates rising, but from a historical perspective they are still low and the monthly affordability in mortgage terms is rarely the issue these days.
We are also seeing a massive increase in clients purchasing second properties or holiday lets. With the Stamp Duty holiday and prospects of “local lockdowns”, this is proving to be a popular area of consideration.
This Stamp Duty holiday has also spurred more landlords into action too, again mortgage rates in this sector of the market have never been this cheap. We are seeing a lot of calls from landlords looking at consolidating their portfolio or looking at releasing funds to have cash aside to take advantage of any opportunities that come their way.
Despite the fact that the Ministry of Housing, Communities and Local Government has now confirmed that it is to extend the ban on evictions to 20th September and also introduce six-month-long notice periods that will run until 31st March 2021, landlords are yet to see their tenants affected in great numbers.
It is easy to forget that for every person sadly affected by this pandemic, looking for a payment holiday or furloughed, there are also an awful lot more people who continue to work, earn and want to spend on property.
Perspective is a wonderful thing and concentrating on the positives rather than the negatives is how we improve sentiment and come out the other side.
In terms of mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 1.14%, (3.20% APRC) and 5-year fixes from 1.34%, (2.80% APRC) whilst variable tracker rates are around from 1.24%, (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).
To speak to one of our professional advisers call us on 020 7220 5110 or send a message via our contact form.