May Mortgage News

Posted by Mortgage Squared on 25th May 2021 -

Banks May Address Lending Limits
Senior Bank of England officials have warned they may have to reduce lending to stay within regulatory limits as recent figures show lending at it’s highest since the financial crisis. Steep rises in mortgage lending meant lenders were pushing against the regulations brought in after the 2008-2009 crash.  Steep rises in prices have resulted in mortgage lenders pushing their limits.  The stamp duty holiday has also resulted in far more mortgage applications then before too.

Nationwide Launches Lowest 95% LTV Fixed Rate Mortgage
The Nationwide Building Society is set to launch the lowest 95% loan to value fixed rate mortgage on the market. First time buyers and home movers will be eligible.  Two and Five year fixed fee rates and two year tracker are available from 3.40%. The two year fixed fee comes with fee options, 3.49% with a £1,499 fee, 3.69% with a £999 fee and 3.84% with no fees.

Good Borrowers Rejected By Super Strict Credit Scoring
Mortgage lenders credit scorecards for 95% LTV mortgages are too strict resulting in applications from squeaky clean borrowers being declined.  Mortgage lenders using the 95% mortgage guarantee scheme are only allowed to lend to creditworthy borrowers.  Mortgage brokers have complained that banks with the backing of the Governments scheme have set the credit score bar too high with reports borrowers with even an A credit rating have been declined.

Lenders to Review Delayed Self Employed Mortgages
Lenders will take a unique individual approach to self employed mortgage applications to help speed up the process and deal with the delay due to the HMRC processing department. There is now a delay of a month rather then the usual 24-72 hours it takes to process the TYO or tax year overview.  The document is essential for lenders to accept self-employed mortgage applications. Some banks are reviewing their process in order to speed applications up.

Asking Prices Reach New High & North & South Divide
The gap between asking prices for property in London and the North of England has shrunk to its smallest margin since 2013 as the growth in northern regions is quicker then the capital.  Properties in London are still 2.9 times more expensive then in the North but a quicker increase in prices in the North has reduced the gap. Prices in the North West rose 11.1% with prices in Yorkshire and Humberside increasing 10.5%.  Yorkshire in particular has seen some of the highest increases in property prices.

New Bank Set to Launch
A new mortgage and property finance collective has revealed it’s set to launch a new bank in June 2021. The name will be revealed next month but the bank will take the well-known concepts of deposits, savings and lending and turn them into a nationwide socially conscious effort with giving of a different kind. We do know it will be a new Bank with a difference, in what way is yet to be known.  Taking feedback from mortgage brokers the new Bank will shake up the industry.

 Over 55’s Having Trouble Finding Mortgages
The over 55’s are finding it more difficult to get a new mortgage, even more so then the self-employed.  Over 9% of over 55’s who applied for a mortgage were unable to get accepted, whilst the figure for self-employed was 2%.

Vida Launches Buy to Let Deal
Vida has launched a five year fixed rate buy to let mortgage deal at 3.29%. The new product is available up to 75% LTV with a 1.5% fee. It comes after Vida launched a new range of deals with fixed fees of £1,995 for purchases and remortgages.

The Best Mortgage Rates
Mortgage lenders continue to offer very competitive rates with many deals now under 1% in terms of interest rates. TSB have a fixed rate of 0.99% for 2 years with a product fee of £1,495. Coventry Building Society also have a great deal at 1.39% fixed for three years with a low product fee of £999. Santander, TSB and Nationwide Building Society all have a fixed rate 1.19% deal over 5 years with fees from £1,249 to £1,499.

More Deals for 5% Deposit Borrowers
There are now over 100 deals for borrowers with just a 5% mortgage. The choices are now approaching pre-pandemic levels with more choice of lenders.  There are 112 mortgages for people with a 5% deposit so there should be a great deal for most people looking to buy. May last year there was just 41 lenders who would look at borrowers with just a 5% deposit saved up.

Stamp Duty Holiday to End 30^th June
Time is fast running out if you want to make the most of the Governments stamp duty holiday.  The deadline is the 30^th June and with property buying transactions taking months you ideally need to be in the process now to make sure you qualify and save hundreds, maybe thousands in stamp duty costs.