The Government has recently introduced a Stamp Duty Holiday announcement ending in March 2021 with hopes to get the Property Market back to normal after the recent Covid-19 lockdown.
The Bank Of England has set its interest rates at one of the lowest that the Property Market has seen for a while in order to give potential buyers the chance to get on the property ladder but with recent changes in place it means lenders are only accepting mortgages with a 15% deposit and higher.
Furthermore, there are alternative ways to get onto the property ladder such as new builds being okay with 5% deposit from your own funds, topped up to 25% with the Government Help to Buy Equity Loan.
At various times lenders will drift in and out of offering 90% Loan to Values to the general public but these will only be available for a limited amount of time due to the lenders discretion. For the Mortgage Market to get back to its normal state we need the ‘big banks’ to get back to normal, as right now, it’s the lenders which are pushing the boat out to try and make the Mortgage Market accessible to all that they are able to.
But lenders and banks are restricted like most companies during lockdown due to trying to adhere to social distancing regulations meaning that offices have a limited full capacity because they are struggling to get a sufficient amount of people back into the office. Further concerns are job loss data and lenders don’t want to have to repossess any customers who might end up in negative equity. These reasons are holding lenders back from offering the full range of the mortgages that they are able to.
Demand is still outweighing supply in terms of residential property so no changes have been occurring to house prices yet and there are no signs of this changing in the near future. However, we are noticing that there are multiple people going for the same houses that are available so it may be a good move for applicants to obtain Agreement in Principle before making an offer.
If you were aiming to apply for a mortgage and have already saved up the 10% deposit then it would be advantageous to keep on saving to a 15% deposit as this would also mean interest rates would be lower when the time comes to applying for a mortgage, so it would work out in your favour.
Our Mortgage Advisors in York are still available if there are any questions that you may have regarding the new mortgages updates, these can all be answered in a free mortgage consultation that we offer to all our customers.