"While the number of products available at 95% are not quite at the level of pre-pandemic, confidence is clearly building and lenders are relaxing criteria accordingly."
These changes will be welcome news for brokers with first-time buyer clients, many of whom have struggled to find products. A recent survey found 81% of first-time buyers have been rejected for a mortgage during the pandemic, according to research from Aldermore.
There were also positive changes in April for self-employed clients with the relaxation of criteria from two lenders. These changes will bring more clients to the table, and with brokers already inundated, it is crucial to stay on top of the rapidly changing criteria.
As many are former mortgage brokers themselves, the team at Knowledge Bank understands the challenge that brokers are facing with the constant stream of clients and the evolving marketplace. The team is constantly working to ensure brokers are kept up to date and can give best advice to their clients.
WC 29th March
First-time buyers were the flavour of the month at the start of April, foreshadowing how the rest of the month would progress. Earl Shilton Building Society launched a new first-time buyer product available up 92.5% LTV.
Lenders were also loosening criteria for those already on the ladder. Skipton Building Society relaxed criteria around its 95% LTV products, allowing movers, as well as first-time buyers to access them.
Despite the vast majority of news in April being about product launches and reinstatements, Aldermore announced it was withdrawing its 95% LTV residential mortgage products to manage workload.
North of the border, Merseyside-based Hope Capital announced a short-term finance proposition for Scotland. Having tracked the Scottish property market for some time, the bridging lender has expanded its offering to brokers and their clients who have property in Scotland. This includes a range of bridging loans for residential, mixed-use and commercial property.
WC 5th April
Following the Easter weekend, Buckinghamshire Building Society released a range of 95% LTV products, aimed predominately at first-time buyers. The 95% range offers a maximum loan size of £500,000. Income multiples will be capped at 4.5 times income for a sole application and four times income for a joint application.
Market Financial Solutions (MFS) launched a new range of development exit products. These development exit loans can be used to pay off existing development finance by raising funds on a completed development, increase the time available to sell units, or bridge the gap between paying off the development finance and finding a long-term finance solution.
WC 12th April
Lenders continued to relax criteria and unveil 95% LTV mortgages this week, with Platform reinstating its mainstream residential and buy-to-let products for new business and product switching. The West Bromwich Building Society and Leeds Building Society increased maximum LTV to 95%, and Atom Bank relaunched its 95% LTV range.
Bluestone Mortgages announced an update to its credit policy to provide further support to self-employed borrowers impacted by the Covid-19 pandemic. The update applies to applicants who have experienced a reduction of more than 10% in business income as a result of the pandemic, but who have since seen their earnings return to pre-pandemic levels.
Buy-to-let lender Landbay lowered the minimum property value on its core products to £65,000 from £75,000. The lender commented that this will appeal particularly to landlords investing in parts of northern England and Wales.
WC 19th April
This week the positive news for first-time buyers continued, with Nationwide launching a new ‘Helping Hand’ mortgage. This allows first-time buyers to borrow up to 5.5 times their income when taking a five or ten-year fixed rate up to 90% LTV.
A number of lenders returned to 95% LTV lending as part of the government backed guarantee scheme including Halifax, Santander, NatWest, HSBC and Barclays.
Outside of the scheme, Metro Bank increased its maximum LTV to 95% and Cambridge Building Society have announced that it will be increasing maximum LTV to 95% in May.
There was also good news for self-employed applicants with United Trust Bank confirming that the maximum LTV for self-employed applicants has increased from 75% to 80%.
WC 26th April
The Government announced a £150million ‘Help to Build’ scheme designed to make it easier for people to build their own homes. The money will go towards funding loans for self-build and custom-build properties. The borrower will put 5% down as a deposit, the government will provide 20% and the remaining will have to be secured through a self-build mortgage.
Specialist finance provider BuildLoan explained this is similar to the Help to Buy scheme, except that the government loan goes to the lender rather than the house builder.
Nationwide launched a cashback mortgage deal for borrowers who buy a property with a high energy efficiency rating. Homebuyers who choose a property with an Energy Performance Certificate (EPC) rating of A are eligible for £500 cashback and for high EPC-B rated homes, £250 cashback is available.
The month was yet another one of vast changes in criteria in the mortgage market. While the number of products available at 95% are not quite at the level of pre-pandemic, confidence is clearly building and lenders are relaxing criteria accordingly.
