2020 has been a very successful but very challenging year! Of course, in lockdown 1, Estate Agents were closed and this had a knock on effect to the mortgage market, with very few purchase applications being submitted. We did manage however to continue to support our clients with remortgages and submitting new rates for those with deals ending.
The recovery of the market post lockdown was nothing short of astounding, with record business levels. Whether this is due to the temporary stamp duty waiver or people reassessing how they live is unclear, and the truth is probably a combination of the two.
One challenge post lockdown was the number of clients looking to move and the service timescales of many lenders, which we are still suffering with today. We would normally expect to obtain a mortgage offer for our clients in 1-3 weeks but this is now 6-9 weeks with certain lenders.
The main reason for lender delays is that they are looking far more closely at self employed cases and cases with smaller deposits.
Another challenge has been the lack of mortgage availability with smaller deposits. In normal times, we arrange mortgages with 5 and 10% deposit every week – primarily for first time buyers. Lenders cut back on these very quickly and 8 months later we are still nowhere near any level of normality. There are some 90% mortgages available, but these tend to come with additional criteria restrictions, or are priced substantially higher than they were pre-Covid. This has meant that a large number of first time buyers have been locked out of the market.
Looking forward to 2021 and predicting what will happen in the mortgage/housing market is very difficult. I hear on the grapevine that some of the bigger lenders are seriously considering re-entering the market with 10% deposits and if that happens in the short term, it will certainly create more optimism and allow those that have been locked out of the mortgage market, to finally obtain a mortgage and this will act as a stimulus.
I also think that now a vaccine looks like it will be rolled out during the early stages of 2021, we should hopefully see some level of normality returning to the market.
In all of this, I can honestly say that mortgage advisers such as ourselves have never worked harder and have never been more valuable to our clients.
Chris Croake, Director.