Hard for first-time buyers

June 14, 2020

Enable Independent Financial Advisors in Bishop’s Stortford understand the mortgage market is constantly changing. External circumstances impact on providers and make them adjust their offers. Sometimes extreme external circumstances make it particularly hard for first-time buyers. 

At the beginning of the COVID crisis, many mortgage providers withdrew high LTV mortgages quite speedily. Then as social distancing measure began to be relaxed, many providers started to reintroduce these deals again. Research from Money Facts found that “on the 1 May 2020 there were just 100 mortgage deals available at a 90% LTV, which had increased to 183 in just one month. On 8 June 2020, there were 191 mortgage deals available at a 90% LTV.”

Sadly, particularly for first-time buyers looking for a mortgage deal this direction of travel was not to last, “the number of deals at a 90% LTV had fallen by 87, standing at 104 on Tuesday 9 June.” But as ever with the ever-changing external factors, it makes sense to consider why Mortgage lenders have been busy pulling home loan deals catering for those homebuyers looking to borrow 90% or more of the property’s value.

It would seem that many of those providers are saying they simply could not cope with the unprecedented demand. It was only a month or so ago that the housing market in England was able to open again after 7 weeks in lockdown. “Borrowers hoping to purchase or take advantage of low rates to re-mortgage at a high LTV may have been disappointed to see that amount of choice available to them has fallen over recent days,” said Eleanor Williams, finance expert at Moneyfacts.co.uk. 

She confirmed that, “this is likely to be due to the level of demand for these products being overwhelming to the lenders who had brought these offerings back. Also, it may be linked to uncertainty surrounding property valuations, which results in providers acting with caution around higher-risk lending.” But as Enable’s IFAs know many of these higher LTV products are needed by first-time buyers, who are a vital part of keeping the housing market running so we hope to see more offers returning soon. 


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