Coronavirus News: As Lockdown eases - Will mortgage deals be hard to find?

As the Government has recently urged buyers and sellers not to move home during Coronavirus, lenders have been left with a very dormant lockdown new mortgage lending market.

Together with the reduction in the Base Rate by the Bank of England, lenders have been pulling deals from the market, particularly those in the high loan-to-value range. This, coupled with a focus on existing customers and towards mortgage holidays for existing morgagees, the lending climate during Lockdown has been hesitant and less than deal-orientated for those seeking a new mortgage. Employed people on Furlough Leave or in vulnerable industries, could also be seen as more of a lending risk to mortgage providers right now and they might struggle to progress a mortgage application at this time, especially if the loan-to-value range is high.

There is a concern too, that the value of properties may fall in 2020 as much as 10%, leaving home owners with large mortgages facing negative equity and an inability to pay their mortgage each month. Falling house values will lead to mortgage providers being nervous about lending for house purchases without a sizeable deposit, but some lenders are  "adapting and innovating" according to Mark Harris in April, a broker with SPF Private Clients.

• Nationwide resumed loans at 85% loan-to-value (LTV) in April, similarly Halifax raised its LTV level from 80% to 85%.

• Virgin Money is offering purchase mortgages and Santander increased its maximum loan size - from £300,000 to £500,000 - and also cut fees on residential mortgages.

If you already have a mortgage offer, several lenders are offering a 3-month extension on the offer, allowing you more time to find a suitable property as Lockdown eases. You need to apply for the extension online and complete the relevant application form.

If you are searching for a mortgage offer at the moment, now that Lockdown seems to be easing over the coming weeks, it might be worth watching to see how the market has reacted to Boris Johnson's conditional plan to re-open society from his speech on 10th May,  the offers from lenders may look a whole lot more positive for people with smaller deposits in a few week's time.  

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Sharon Sangha, Associate Director, Head of Residential Conveyancing

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