Many of us are glad to see the back of 2020, but it doesn’t look like much is going to change in the first part of 2021. Things are certainly looking positive with the introduction of new vaccines to help fight coronavirus, which has created a light at the end of the tunnel. However, with a large population to immunise, it looks as though restrictions could still be in place for some time.
So how does that affect homeowners, landlords and hopeful first-time buyers? The housing market has proven very resilient and is still busy. There are also some benefits if you are looking to buy your first home this year, or to remortgage.
Mortgage Rates in 2021
We do know that the base rate is likely to remain low. This means that where mortgage deals are accessible, rates are currently remaining low, and it could be a good time to get on the property ladder or to remortgage – speak to one of our advisers to discuss your options.
Low Deposit Mortgage Deals in 2021
The Government are currently working to make low deposit mortgages more accessible in 2021 due to many mortgage lenders pulling the plug on these competitive deals early in 2020 and throughout the year. Less low deposit mortgage deals could make it more difficult for first time buyers and they may have to save for longer to secure a better deal when the time comes.
Could mortgage caps be relaxed in 2021?
It is widely thought that some lending caps, where a person can borrow up to 4.5 times their income to buy a property, could be relaxed in 2021, to help provide more buying power to those looking to invest in property throughout the year. There is also a new Help to Buy scheme launching in April, which will continue to allow first time buyers to get on the property ladder, even if they have a small 5% deposit.
How will the furlough scheme and payment holidays affect mortgages in 2021?
With recent news that lock downs may be extended until after the Easter break, to help keep cases of Covid-19 low and reduce pressure on hospitals, there is much uncertainty for those that have been receiving furlough payments where they are unable to go to work. The current furlough scheme is set to end in April 2021, but with talks of extending lock down, the Government are working towards a solution to help prevent a rise in unemployment.
This time is uncertain for those trying to keep up with payments and also for landlords who have tenants that may not be able to pay their rent. Speak to our team if you need advice and we will do our best to help and provide information depending on your circumstances.
According to Which, if you have needed to take a payment holiday from your mortgage, this will not affect your credit rating but it is not certain how this will affect your future mortgage applications, so this is certainly an area to watch.
How will landlords be affected by Brexit and the pandemic?
In November, data from Hamptons indicated that a large number of new property owners were cash buyers, indicating that in the run up to the deadline for the stamp duty cut in March 2021, only larger property investors will be taking advantage of the scheme in the last couple of months.
Re-mortgaging in 2021
There is a rise in the number of remortage deals going ahead. This could largely be due to many homeowners wanting to renovate their properties or make some home improvements. A Natwest survey found that whilst 19% of remortgagers did so primarily to make home improvements, 62% consider switching deals again to renovate their homes.
The Government also launched the Green Homes Grant Scheme, making now a good time to look at getting those property improvements completed as you may be able to claim some of your expenditure back to help cover the cost for things like insulation and energy efficient changes and savings. Read our recent article on buying a new property vs home improvements.
Need advice on mortgages in 2021?
The team at Choice Mortgage Solutions are here to help. Whether you are looking to get onto the property ladder, buy-to-let, are self-employed or looking to remortgage – we can help you assess your circumstances, plan for the future and give you access to mortgage deals that you may not find on the high street. Get in touch with our friendly and knowledgeable team via the website or by calling 0800 612 8099.