22 April 2020

Mortgage options improve as lenders adapt to new working conditions

After three weeks of mortgage product availability falling, the good news for those looking to purchase or remortgage is that there is an increased number of options available, with Nationwide, Halifax, Virgin Money and Santander all making positive policy changes over the past couple of days.

Lenders are adapting and innovating, continuing to find new ways to offer mortgages. There is a willingness to lend – the problem is that lenders have had to deal with issues such as staff resources and handling the surge in mortgage payment holidays.

Another challenge has been adapting automated valuations. In the past, there were too many caveats – for example, many lenders would not lend on flats, over 50 per cent loan-to-value (LTV) or over £1m. But lenders have been working with valuation teams to improve their terms so they can do more lending.

There is a much reduced purchase market because of the inability to do viewings, so in the remortgage space lenders are keen to keep a volume of business ticking over. There is a little more caution in the underwriting process but even if a borrower is furloughed, the lender will often take their full income into account if it can be proven that the employer is topping up the salary.

Fixed rates continue to sit at all-time lows, while base rate is almost zero, so there continue to be plenty of good deals on offer to choose from.

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