Although many of us have been mainly glued to CNN until the small hours of the morning watching the extraordinary events unfold in the USA, (they nailed it), we have continued to see a lot of activity in the mortgage market over the past week.
In fact, Joe Bidens’ win over the orange one puts a particular pressure on our own Prime Minister to get back to the negotiating table and do a deal on Brexit that works for everyone. Biden is smart and understands the issues where Trump clearly did not, and we can only hope this result ushers in a new spirit of co-operation and trust rather than the politics of division we have seen over the past few years.
This could well be a good thing for both the markets, our economy, and the housing market.
According to a report from Moneyfacts out today we are finally seeing mortgage product availability increase once more, although average rates are still rising.
They reported that “Availability increased across all the LTV tiers this month, with the exception of the limited 95% and 100% tiers where there was no change”.
What was also interesting is that they said, “Also demonstrating how fluid the mortgage market remains is the fact that the average shelf life for a mortgage product has reduced to 28 days, which is the lowest on Moneyfacts’ records”.
As brokers, our job has become increasingly tricky to keep track of all the frequent changes from lenders that can see products change within 24 hours, but this shows just how important brokers are in the current market if buyers are to have a hope of locking into the very best rates.
Coreco also had a busy week in the Press. As well as appearing on the Financial Times’s Money Clinic podcast this weekend, we were also in The Daily Mail and The Times talking about the current environment, how some people were struggling with credit issues and whether there were now some borrowers effectively being treated as second class citizens.
It is a really tough time for many at the moment as is evidenced by the figures in a new report commissioned and released by Pepper Money, and for those borrowers who are having issues now, it makes sense to wait until your situation improves before contemplating moving or trying to buy a property.
That said, there are a good many people who still need to move home for various reasons and it makes sense to speak to a professional broker if you feel you are in this category. Not only do they have access to a wide range of options that are not available on the high street, but they will also work carefully to understand your levels of affordability and make sure you are not trying to bite off more than you can chew.
The good news is that whilst mainstream lenders are putting up the shutters to many who are perceived as an increased risk, sometimes unfairly so, there are still some really good specialist lenders around who are able to help. There may well be more choices available than you may think.
Getting on the property ladder is an important stage for many people, but it is essential this is done with forethought, planning and most of all with advice.
What is also worrying is that some lenders have decided that self-employed people are at risk because of the issues they are facing in the economy, but for a lot of self-employed people that’s not the case at all, and they have guarantees of work coming in no matter what.
People are being tarred with the same brush, and I’d like to see lenders take a more pragmatic approach, although many say they don’t have the capacity to do that at the moment.
Luckily there are some lenders who are still very much happy to lend and I suspect that the market will look very different again in the second quarter of next year.
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).
Have a great week and remember, we are here to help!