Welcome to another week as we start to get into the Christmas spirit as much as possible.
Before then, there is much work to be done and this period looks like it is going to be a much busier one than normal as the levels of enquiries and pent-up demand show no signs of a let-up. Add to this people trying to complete before the end of the Stamp Duty holiday and the next 4 months look busier than ever.
Bank of England Money & Credit report (October)
Hot off the press is the latest report from the Bank of England, released this morning which showed just how hot the mortgage industry has been running.
For mortgage approvals to be the highest since September 2007, the month when people queued outside Northern Rock and the Global Financial Crisis symbolically began, shows the sheer extent of the pent-up demand caused by the first national lockdown.
Brokers have been busier than ever since the property market reopened in May of this year and the number of approvals in October reflects the mad stampede to buy before the stamp duty holiday ends.
This data is bittersweet, of course, as we all know that 2021 could see the real economic impact of the pandemic start to bite. It’s hard to celebrate such robust mortgage approvals data when we all know what’s around the corner.
Unsurprisingly, lenders are circling the wagons due to concerns over rising unemployment levels and their impact on house price growth. Getting a mortgage at higher loan to values remains an almost insurmountable challenge.
What’s vital is that lenders don’t become overly cautious and stop lending to borrowers with larger deposits. With a vaccine looming, lenders will hopefully avoid entering panic mode.
There are still many landlords and owner-occupiers with equity and decent incomes, who are perfectly viable borrowers, and the banks shouldn’t forget this.
In fact, although there are reports that unemployment will hit the 3 million mark, this still leaves a workforce of something like 30 million, who still have housing needs that will mean that demand is not likely to ease up.
High Loan-To-Value Borrowing
The good news is that choice continues to increase, albeit slowly, with both TSB and Nationwide expanding their 90% LTV offerings, joining Accord and Platform in this arena.
Hopefully, this area will continue to improve early next year.
As many of you will be aware, the current Homes England Help to Buy Equity Loan Scheme 2013-2021 is coming to an end. Most lenders need all applications to be received by the close of business on the 18th December 2020.
The new Homes England Help to Buy Equity Loan Scheme will commence on the 16th December 2020, with lenders accepting fully packaged applications from customers from this date.
It is really important for all buyers to take appropriate advice where these schemes are concerned to ensure everything is submitted correctly, especially given the changes in the scheme and the impending Stamp Duty holiday deadline.
Best Mortgage Rates
In terms of mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 1.09%, (3.90% APRC) and 5-year fixes from 1.29%, (3.30% APRC) whilst variable tracker rates are around from 1.57%, (3.80% APRC).
Those looking at Buy-To-Let can now obtain products from 1.19%, (4.40% APRC) for 2-year fixed or 5-year fixes are available from 1.64% (3.80% APRC).