"We have seen progressively more good news and this week ended with the news of increased LTVs across a whole range of mortgages often up to 80% LTV."
As former mortgage brokers themselves, the team at Knowledge Bank knew the challenge that brokers would be facing the moment the first payment holidays were announced. They immediately sprang into action creating a Covid-19 Live Criteria Feed for brokers to use for free to keep on top of what is happening on a day to day basis. This is a summary of the key highlights of the past month.
The 1st May may well have been a Friday but the Knowledge Bank team had worked around the clock once more, responding to a tweet from a broker saying it would be really helpful to have a criteria category for lender SVRs as, despite being an experienced broker, he was struggling to keep up with the level of changes. Team KB rose to the challenge and delivered – in just 19 hours - building a whole new feature for LTVs on its criteria search system, so brokers have an always up-to-date point of reference.
Week commencing 4th May
On what should originally have been bank holiday Monday there were a plethora of changes to criteria especially around LTVs, desktop valuations and maximum loan sizes.
In the week the government’s bounce-back loan for businesses went live, we were also inundated with lenders announcing that they now had desktop valuations or AVM solutions - although there were additional restrictions placed on things like loan sizes and property values to enable lenders to build a buffer for desktop valuation values.
Other lenders, such as Precise and Kent Reliance to name just a couple, brought in a number of exclusions for types of properties unable to benefit from their new AVMs.
Skipton announced changes to its criteria for contract workers – both independent contractors and zero hours contracts. Meanwhile Tipton withdrew its 90% LTV loans following a flood of other lenders doing the same thing, while Kensington and Mansfield increased their LTVs back up to 70% or 75% on residential and buy-to-let.
Wednesday 6th May was such a crazy day ahead of a quieter one the day before the VE Day bank holiday. Knowledge Bank saw 131 changes to criteria by lunchtime!
Week commencing 11th May
This week saw a drive of lenders announcing changes in LTVs with some really positive moves in the right direction. Highlights were Santander launching new 85% LTV fixed rate products and expanding their Help to Buy Equity Loan range.
Tuesday brought the news we had all been waiting for that surveyors would be able to go back to work following the ‘Working safely during COVID-19 in other people’s homes’ guidelines. This kickstarted a plethora of announcements from lenders reintroducing physical valuations.
Wednesday brought additional news that estate agents and lettings agents could re-open in England (Sorry Scotland, Wales and Northern Ireland… but we know you’ll not be too far behind) and Rightmove was instantly groaning under the weight of over 2,000 new listings.
There were changes around self-employed applicants from some big lenders, also important changes to income and affordability criteria, including the announcement that Halifax would now consider furloughed workers and those asked to take a reduction in their salary.
Barclays, meanwhile, let Knowledge Bank know they would start writing to your clients who had a mortgage offered prior to 10th April 2020 to see if their circumstances had changed.
Week commencing 18th May
This week was dominated by lenders announcing they were reintroducing physical valuations. 28 lenders in total announced a return, each accompanied by new criteria including increases in LTVs, loan sizes and lots more.
Of these, NatWest said they had put ‘significant capacity in place’ to work through the backlog of physical valuations and they expect to have completed all possible outstanding valuations within 2-3 weeks, working through the oldest first.
On Tuesday Ipswich Building Society said it was happy to accept 80% of furloughed workers’ salaries up to £2,500 per month but would need to see evidence of entitlement.
Accord Mortgages, Clydesdale Bank and Virgin Money all announced they would increase their LTVs to 90% on residential ranges. While nine lenders reinstated some or all of their lending.
We finished the week with the big news that the Financial Conduct Authority (FCA) are consulting to extend mortgage payment holidays by an additional three months to 31st October 2020.
This coincided with a swathe of information from lenders on how they are treating borrowers in need of mortgage payment holidays alongside other support and criteria being put in place to help your clients who may need it.
Week commencing 25th May
Just a short week with the bank holiday, but with 3,388 criteria changes by the time we got to this point, everyone was ready for a breather!
The only fly in the ointment was a phishing scam that seemed to have been sent to a wide number of brokers. Knowledge Bank’s warning about it went far and wide however, even ending up in The Times.
We ended the month on a real positive though, we have seen progressively more good news and this week ended with the news of increased LTVs across a whole range of mortgages often up to 80% LTV. Also, a swathe of new product launches, including a new buy-to-let range from Landbay, new products from Virgin Monday and Clydesdale and news that Gatehouse Bank will now lend up to £5m on buy-to-let in England.
