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This is our take on recent news in the mortgage market. Our views are often cited in several national publications, including; BBC News, The Times, Telegraph, City AM, FT Adviser and Daily Mail, as well as a number of key trade publications, so this should keep you ahead of the curve. If you have any questions on any of these stories, or would like further information, please do not hesitate to get in touch.
At a glance:
What is “high LTV” lending now? More rate increases and the bracket shifting down further…
It will come as no surprise that we keep seeing lenders increase their rates at higher LTVs given the current climate, with HSBC and Virgin Money being the latest to join an ever-growing list. What is interesting however is how 85% LTV rates are increasing and this bracket is in effect the new 90%. Borrowers will need either have a large deposit or a large amount of equity if remortgaging to benefit from the historically low interest rates on offer.
Is the post-lockdown housing boom coming to an end?
We have recently had our busiest 4 months on record, both in terms of mortgages arranged and in terms of enquiries, and as we outlined in another recent mortgage memo we have seen a dramatic rise on the purchase side of our business… However, this last week we have witnessed a slowdown and believe this could be indicative of what is to come. The demand behind this boom was driven primarily by three things, the market having been placed into a coma for a couple of months, the Stamp Duty Holiday bringing purchases forward and people looking to make lifestyle changes or purchase second homes and the like following being stuck in the same four walls for so long. The increased levels of restrictions announced this week, a second national lockdown potentially on the horizon and further dire economic warnings may be starting to put the brakes on some buyers making their move just now. Moreover, the mortgage market is becoming increasingly restrictive and so there will simply be a decreasing pool of potential purchasers…
Even negative interests are unlikely to put a stop to rate rises
A Bank of England policymaker has recently defended the potential to introduce negative interest rates and whilst there is no indication at this stage that this will happen it very much could as a means to stimulate the economy. This of course is further bad news for savers as banks are likely to pass this negative interest rate on, but it is also not the good news for borrowers that you may expect, unless you are on a tracker or variable rate, as given the state of the economy banks are very unlikely to pass this saving on and will more likely use it is a buffer to increase their margins on riskier lending propositions…