Hello again readers,
I hope you are all keeping safe and well and If you need any assistance with your mortgage finance or insurance needs, please feel free to email / call me and I will be happy to help.
It has been a busy week or so with many changes in the interest rate world. Some large lenders have cut rates, others have increased rates. Included in the list of lenders to make recent changes, Newcastle, TSB, Nottingham, Skipton, West Bromwich, Barclays, Nationwide, Ipswich, HSBC, Accord, Paragon and Leeds.
In criteria news, after last weeks rush of tightening on criteria for the self employed applicants, this week has seen several changes to income multiples, for example Scottish Widows have advised that the maximum LTI of 4.49x is being extended to incomes of less than £30,000 to ensure they continue to lend responsibly to customers on lower incomes.
Other lenders have given their views on applicants from overseas following the 31/12 Brexit change, for example Santander announce that borrowers who are citizens of the European Economic Area (EEA) and applying for a mortgage over 75 per cent loan to value (LTV) will need to prove their permanent right to reside in the UK with the lender. And for ex-pat lending Saffron Building Society has immediately barred borrowers in the European Economic Area (EEA) from accessing its expat buy-to-let products. This could be a short term measure, and other lenders have followed suit. Saffron add that the recent changes post-Brexit mean that for the foreseeable future – until it is clear how to engage with member states – we are reluctantly withdrawing the product from the EU membership countries.
In wider news, Prime residential property markets hit their highest activity levels since the financial crisis last year despite the impact of the pandemic lockdown in the spring, according to Savills. The estate agent noted the UK market had bounced back remarkably well since the end of May, this was predominantly in the regional markets outside London “where the volume of activity in prime residential markets for the year as a whole was the strongest since before the global financial crisis,” it added.
And in a slightly linked story, Gross mortgage lending is tipped to rise by 17 per cent to £283bn in 2021 driven by house purchases, according to the Intermediary Mortgage Lenders Association (IMLA). If the market achieves this level of mortgage lending it will mark the best performance since 2007.
Gross mortgage lending in 2020 is estimated to have reached £241,600. And following an expected strong performance this year, gross lending is forecast to rise to £286bn in 2022. IMLA predicts buy to-let lending will rise from £38bn to £40bn this year and £41bn in 2022.
In the trade body’s latest report, New Normal, it predicts a swift return to household spending when lockdown restrictions are eased this year and the avoidance of a mortgage arrears crisis.
In Insurance news, after last week’s note about Coronavirus, this week a note from Canada Life which states they want to support as many customers as possible, including NHS staff and key workers. That’s why they will no longer asking applicants if they’ve previously been in contact with someone suffering with Coronavirus. They believe this should help more people, especially those in critical roles, to obtain cover.
I hope you found this post of interest and feel free to get in touch with me if you need any help with your mortgage or insurance needs,
All the very best,
Richard Johnson
Cert CII (MP), CeCM, AdvCemap, CeRGI
Mortgage and Insurance Consultant.
Mobile Phone ; 07881802962
Office : 0208 245 8464 direct dial
Email : richard@rjmortgagefinance.co.uk
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