It’s June! Not sure how that quite happened, but here we are in a much more positive space than we have been for a few weeks.
The market has started to improve again slowly from a lending point of view with lenders starting to open more product availability and move up the LTV scale. This has been helped by the return to work of valuers who will now start sifting through the backlog of cases.
We are seeing a lot more activity and searches related to property and mortgages once more, and the enquiry levels are starting to ramp up again which is good to see. What is more positive is that lenders are now also ready to take in business once more at a higher volume.
We carefully monitor all lenders for service and have found that across the board our average time from application to offer is 14 days, with the top lender averaging 8 days.
This will continue to improve as things get back to normal, but it shows that the mortgage process is working, and most applications are going through without too many issues.
Overall, lenders have been excellent in their handling of the crises on the mortgage lending side.
There are some questions to bear in mind as to how lenders are underwriting cases now, which shows just how important advice and the guiding hand of a professional broker is at present.
- The treatment of furloughed workers – lenders are asking additional questions, sometimes after a “binding offer” has been issued which can be a little vague and could mean the lender rescinding their offer if there have been changes to personal circumstances.
- There is a heavier line of questioning around self-employed and small business owners with underwriters trying to assess the ongoing security of a business. Expect to be asked for business bank statements amongst other things.
- Many lenders have now cut the amount of bonus they will take into account when assessing affordability, again across the board rather than identifying industries where bonuses are unlikely to be affected.
- Valuations – there is some concern that valuers will start to drive the market by “downvaluing” both property values and rental assessments, especially at a time when transaction levels are low and comparables thin on the ground. To date, however, we have seen little evidence of this.
With every lender doing something slightly different, we know which lenders to approach dependent on the situation of the client. Putting the right client with the right lender in the first instance dramatically reduces the chances of any delays or issues.
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 1.39%, (2.80% APRC) whilst variable tracker rates are around from 1.24%, (3.80% APRC).
Those looking at Buy-To-Let can now obtain products from 1.19%, (4.55% APRC) for 2-year fixed or 5-year fixes are available from 1.62% (3.77% APRC).