Tuesday, May 11, 2021

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 (Mortgagestrategy.co.uk)

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.

However, the government’s recent decision to extend and taper the scheme has helped support the market and avoid disappointment for many buyers who might otherwise have missed out on the tax incentive.

Imla executive director Kate Davies says: “There will, of course, now be two further deadlines — 30 June and 30 September — and we are repeating the message that it will be important for estate agents, intermediaries, lenders and conveyancers to manage consumers’ expectations and encourage them to be realistic about the timescales required to complete transactions.”

Imla expects gross mortgage lending to rise to £283bn this year. It forecasts that gross lending in 2021 will be 17.3 per cent ahead of last year’s level, with lending for house purchases the main driver.

Busy year expected

But what do brokers think? Trinity Financial product and communications director Aaron Strutt says many brokers expect another busy year.

He says: “Lockdown, the stamp duty holiday extension and now the government’s push on 5 per cent mortgages are strong indicators that the mortgage market will be busy. Lenders have been inundated with applications and they are still offering cheap rates to most borrowers. The 10 per cent deposit deals have got better as competition has returned to this part of the market.”

A key factor that is almost forcing borrowers to use brokers is the complexity of the mortgage acceptance criteria. Many borrowers do not know where to start when it comes to mortgages, especially if they are self-employed, have missed payments, have taken payment holidays or have an unusual financial situation.

The post Catering for post-pandemic life appeared first on The Mortgage Bureau.

https://www.themortgagebureau.co.uk/first-time-buyer/catering-for-post-pandemic-life/

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