Last week we saw the most positive updates from lenders since lock-down as the market recovery continues. Many lenders returning to the market with increased offerings around how they can conduct surveys, raising their LTV restrictions (meaning it is now easier to get a mortgage if you have a smaller deposit), increasing the amount of money they have to lend and introducing new products.
I really have been staggered at the speed some banks have introduced quite large changes. I was expecting that having a severely limited amount of options on lending to go on for many months, when in practice, it has only been a matter of weeks for some lenders and others have carried on as normal.
Valuations of properties
The main move has been around valuations of properties, in that more tech/innovation has been introduced very quickly. We have been going down this path or many years now, so it isn’t a surprise, but very welcome in how quickly it has been adopted more widely.
This is an area that I think will change for good. As from a Bank’s perspective, if you know what a property last sold for, and you have faith in your indexed figure from all the data you have, do you really need a person to walk around a property for 10 mins to tell you what you already know?
You probably will want to send a surveyor out for high value property, non-standard builds or if if the client has a small deposit, but if you are lending 50% of a property value in a well known area, is a surveyor really adding any value? This means long term speed and efficiency for both the bank and the client which can only be a good thing.
Niche areas of lending, or very specific requirements
I don’t want to be blindly optimistic, as if you are in the more niche areas of lending, or very specific requirements, it can be tougher to get a loan now vs pre-lockdown, there is no doubt about that.
However, the reality is that I, or any of my team, haven’t had to say ‘no’ to a single client yet. Granted we have had to come up with some innovative solutions or simply putting people back with their own bank for now, but in any event, we haven’t had one case where we can’t help someone achieve a better deal than by simply doing nothing.
I’m very proud of my team, and indeed industry for that. Brokers have become even more essential to banks as we have the agility, skill and capacity to work for the client and package a case for a lender at a time where they are not able to do that as well themselves. Nearly 80% of all lending was coming via brokers pre-lockdown, I would be very interested to see what that sat is today as I suspect it will be well over 90% currently.
Similar theme of the last 3 weeks in money markets. They have stabilized and flattened out. This strongly indicates that markets are expecting the UK Base rate to get to 0.5% (up 0.4% from where we are currently) in the next 12 months or so.
We would urge you to secure any remortgage products as early as you can (which is 6 months ahead of your current deal expiring). However, if you just want to talk over how this may affect you, that is exactly what we are here for
In the last week:
3 Month Sterling Libor = down by 0.050% to 0.621%
2 Year SWAP = UP by 0.001% to 0.460%
5 Year SWAP = UP by 0.009% to 0.482%
2 Year Variable from 1.24%
2 Year Fixed Rates from 1.14%
5 Year Fixed Rates from 1.41%
BTL Rates from 1.19%
The actual rate you will be offered will be dependent on your personal circumstance and deposit level. Please speak to one of our advisers so that they can guide you through this process
Source: Twenty7Tec April 2020
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