A VIEW FROM THE INSIDE ...
BY CHRISTIAN COVENTRY , CONCEPT MORTGAGES
I was chatting to a long-standing client recently , bemoaning my workload and generally whining about the pressure the housing market was under , in trying to get everyone ’ s property purchases completed before the stamp duty holiday deadline day - I quickly started to backtrack and mumbled something about being lucky to have my health , when so many in the world are suffering . As I was apologising for my whingy demeanour , he stopped me in my tracks and stated it was my “ pandemic right ” to have a little moan !
After a chuckle , I started to feel emboldened and self-righteous about my newly acquired pandemic rights … I thought I would share this with the world , so that we can all take a minute to have a little grumble , understand it is our pandemic right and then get back on with our lives the best we can .
In other news , we are all now breathing a huge sigh of relief that Rishi Sunak has extended the Stamp Dump holiday meaning the current clamour for house sale completions can be pushed into the summer , making life easier for all concerned . That said , there are many potential buyers who are wanting to hold off buying until after the stamp duty holiday has ended ; the general feeling being there could be some type of market correction on the cards once this has happened .
If our freedoms return as we hope they will once the vaccine roll out takes full effect , then I would not be so sure of this happening as quickly as some hopeful buyers are expecting . I sense there is still a lot of pent-up demand from the number of enquiries we are receiving and suspect the imminent return of 95 % mortgages will provide a further springboard to the market .
There has been a big upswing in the number of lenders offering 90 % mortgages since the turn of the year and interest rates on these fixed rate products , as well as any mortgage with anything less than a twenty per-cent deposit , are roughly one percent higher than they were before the first lockdown .
It maybe seems counter-intuitive to have comparatively high interest rates when the bank base rate is at its lowest level ever , but lenders struggled to adapt to the new working environment when the pandemic hit and there was a perfect storm of events to push rates upwards .
Lenders had to deal with a massive influx of borrowers wanting to exercise their right to take a three-month mortgage payment holiday , whilst also having to reorganise their service centres to meet with new socially distanced guidelines , with many staff working from home . On top of this , they had to grapple with how to lend in a world where many employees were now on furlough and small business owners suddenly found themselves unable to trade , meaning lenders had to re-write large parts of their lending criteria and train their Underwriters on how to apply their newly written rules . To cap it all Rishi ’ s Stamp Duty giveaway created a huge spike in demand , causing lenders to buckle under the strain .
When lenders want to slow business down , what do they do ? Yes , put rates up . The thing is , the business levels did not slow down , so they put rates up again and again . We saw rate increase on high loan-to-value products five month in a row and it is only since the start of the year that these rates have started , ever-so-slightly , to drop .
The housing market naturally slows as schools break up for the summer holidays and we would expect that mortgage lenders will start to sharpen their pencils and drop these rates further when activity subsides , assuming of course that it does .
Boris ’ s roadmap out of lockdown will hopefully see our freedoms return on mid-summers day , 21st June and the stamp duty deadline day will be finishing soon after at the end of June .
We are not there yet of course , so until then I am going to keep exercising my pandemic rights and get on with my job !
46 wirrallife . com