November Mortgage Market Update
Mortgage Lenders are busy, behind on processing and increased rates on mortgages over 85% LTV
The stamp duty holiday has triggered substantial interest in the housing market and activity levels are currently very high.
The result is that several lenders are considerably behind with work at present, and some have had to stop lending completely on a temporary basis to catch up. Add to this that many solicitors are also struggling to cope with the number of sales on their desks at present and there are delays in local searches coming in and you can get an understanding why some sales are taking not just a few extra weeks to complete, but in some extra months. so 'patience' is needed from by both buyer and seller if a sale is to be successfully concluded.
The availability of funds is still very good. In general terms lending has returned to a pre-Covid situation, apart from the higher loan to value residential mortgages. Most lenders have products available up to 85%, However, mortgage interest rates have increased slightly at this band level over the past few months.
Probably the only current difficulty in the mortgage market is placing a mortgage at above 85%. There are few lenders available, and those that lend generally restrict to first time buyers, and their funds are only available over a specific number of days. Once these funds are exhausted the rate is withdrawn.
Regarding underwriting, lenders are a little more cautious when using current information on employed commission and bonus. The self-employed must produce three months of business bank statements to show their business is still trading at a similar level to pre Covid figures.
We have experienced delays on valuations, but again this has now been resolved with valuers having caught up with backlogs and with lenders using automated valuations to speed the process.
Other areas of the market including 'Buy to Lets' are also back to normal in terms of the maximum loans and various rental calculations.
So, in summary, general terms its business as normal, just subject to:
- Mortgages generally restricted to 85%.
- Increase in residential rates at the 85% Loan to Value band.
- Lenders behind with processing.
If you are needing a mortgage, keep a close eye on trends and offers and when you see a package from a lender that best fits you, act quickly as you may find that deliberate rationing of the offer may mean it can disappear in a matter of days.
The Robert Bell & Company Team
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