To discuss your residential property requirements, including requesting a conveyancing quote, please contact our Property Team by email or call them on 01225 462871. You can also request a conveyancing quote online.
The opportunity presented by the Chancellor’s Stamp Duty Holiday has turned to frustration for thousands of people looking to move home.
The number of low-deposit mortgage deals available has fallen substantially since lockdown, as lenders look to reduce their exposure to risk in these economically uncertain times. According to Moneyfacts, at the beginning of March, if you were able to offer a deposit of 10% of the value of the property, there were potentially 779 products available to you. Now, that has plummeted to a mere 60.
While Virgin Money has reinstated some 90% loan-to-value deals (ie a deposit of 10% is required), others such as HSBC have this week withdrawn theirs amid a surge in demand, as they look to maintain a spread of risk across a range of borrowers.
From the lender’s perspective, the main issue is the risk of the borrower defaulting on their mortgage payments, and even for people with a sufficient deposit, some lenders are refusing to consider applications if the borrower remains furloughed without a return to work date.
Self-employed people are also reporting that far more information and documentation is being requested than before.
Those most affected, however, are first-time buyers. Many have spent years saving for a deposit which only 5 months ago may have been sufficient for them to take that first step on the property ladder. Now, particularly if they have only 5% to put down, they have little option but to continue saving or wait until lenders are again confident enough to reintroduce low-deposit products.
Moneyfacts states that those with a 15% deposit fare little better than those with 10%, with currently only 66 products available. Should you be fortunate enough to have 20% though, that number leaps to 152.