Wait until summer to get a mortgage, experts warn
Banks and building societies will loosen lending criteria to attract buyers
First-time buyers should be able to access bargain mortgage rates this summer
First-time buyers should be able to access bargain mortgage rates this summer as the economy rebounds and lenders compete for customers.
Banks and building societies have started to adopt more flexible lending rules, following a year when hundreds of deals were withdrawn from sale.
A mortgage with an interest rate below 1pc has already returned to the market, offered by Hinckley & Rugby Building Society.
It is the first to launch since the Covid crisis unfolded last year. Experts have predicted more will soon follow.
Feature: Catering for post-pandemic life
Coronavirus has undoubtedly changed the world but how will it change the UK mortgage market? Emma Lunn talks to the experts
By Emma Lunn
Excluding the dark days and high death rate of January, 2021 has so far been a cause for optimism. The coronavirus vaccination programme is going well and the end of lockdown restrictions is in sight.
But how will the mortgage market react to a radically altered world? Are we likely to see a spate of niche products tailored to the new ways we live and work?
The Intermediary Mortgage Lenders Association’s recent report – The New Normal – identified the 31 March stamp duty holiday deadline as the single biggest barrier to the market’s recovery in 2021.
HOW THIS IS MONEY CAN HELP
He adds: It is pitching for that competitive, high-quality, low-LTV clientele that lenders like to have on their books to lower the overall risk of their lending proposition.
Most lenders are returning to the 95 per cent mortgage market with rates of around 4 per cent, but Sykes believes competition will drive this down.
This in turn will lead to lower rates on lower LTV products, he adds. This is because if there is little difference between the rate on a 90 per cent and 95 per cent mortgage, for example, borrowers will simply plump for the higher LTV offer to get a bigger deposit.
Live: The Royal Institute of Chartered Surveyors (RICS) implemented new cladding guidance on 5 April which clarified what types of properties will, and will not, require additional inspections due to concerns about fire safety.
It is currently estimated that there are two million mortgage prisoners in the UK as a result of the cladding crisis, in addition to 600,000 people currently living in high-rise buildings with dangerous cladding.
According to the latest government statistics, just 53% of high-rise buildings known to have highly flammable aluminium composite material (ACM) cladding have completed remediation.
ACM cladding was the type of cladding responsible for the Grenfell Tower disaster in June 2017.