17 Nov The Housing Market Remains Open
Following the announcement of a new lockdown in England, Jackie Ashmore of Quilter provides you with the latest information on the mortgage market and what this means for lenders and borrowers.
We now know that the housing market will remain open throughout the new lockdown.
The residential property surveying industry have received confirmation from the Ministry of Housing, Communities & Local Government, that they can continue to provide services as ‘normal’ therefore, physical property inspections can continue to be provided. Although how many people will be going out and about viewing properties remains to be seen.
A second lockdown and the corresponding economic repercussions are exactly why mortgage lenders have been being cautious of late. There may be further restrictions on borrowing, and certainly for those with deposits smaller than 20 per cent with these products almost certainly becoming even harder to find. Those that are available may also charge even higher rates to account for the risk.
The FCA is updating its support for borrowers following the government’s announcement, effective from 5th November.
Mortgage borrowers who have not yet had a payment deferral can now request one for up to six months. Borrowers who already have a payment holiday for less than six months will be able to extend it. Lenders will shortly provide information on what this means for their customers and how to apply for this support.
If borrowers who have already taken a six-month payment deferral are still struggling, they should speak to their lender to agree tailored support.
Furlough has been extended
The furlough scheme – officially known as the Coronavirus Job Retention Scheme – has been extended to 31st March 2021, although the government will review the policy in January.
However, there are currently very few lenders that will accept furlough income particularly without a return to work date so please bear this in mind.
The Self-Employment Income Support Scheme Grant Extension
The Self-Employment Income Support Scheme Grant has been extended to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period, with more information found here.
In view of the potential loss of income during this period of lockdown for some self-employed, in addition to the impact of the previous lockdown on stability of earnings, lenders are still expected to exercise caution to ensure that they can satisfy the following concerns:
- Is the income being used sustainable & ongoing?
- Is it plausible the business can return to Business as Usual levels?
- What industry is the applicant in?
- How has it been affected, is it an industry which is still not yet open, has been seriously affected i.e., Hospitality or Retail, or is it an industry impacted due to social distancing rules thereby affecting footfall, customer numbers etc?
Speed up application processing in these difficult times
To speed up the application process, it’s important to give the lender as much information as possible – paint a picture of the case particularly in relation to any impact of Covid on income, so that an underwriter will have a better chance of understanding it and increase the chances of getting a clean, quick and simple offer. Upload the documents asked for case submission and complete the notes section with as much detail as possible. Only send the documents asked for, additional documents not requested will be looked at and can unfortunately cause complications and delays at times.
If you’re not sure about how a lender would treat a scenario, speak with your dedicated contact to check nuances around self-employed, income, grants, customers furloughed etc.
Never before have mortgage rules been so confusing – yet financial advice so critical as it is today. An expert mortgage broker will be able to guide you through the options for you and your circumstances. For advice on the right mortgage to suit your personal circumstances, please contact the team at Howard Mortgages on 01803 554455 or contact us here.
Your home may be repossessed if you do not keep up repayments on your mortgage.