"The pace of change appears to show no signs of slowing down, with lenders restricting criteria for those who are self-employed and on the furlough scheme."
The pace of change appears to show no signs of slowing down, with lenders restricting criteria for those who are self-employed and on the furlough scheme.
With the market constantly evolving, the team at Knowledge Bank know how crucial it is to stay up to date. To ensure brokers can deliver best advice for clients and place difficult cases, the team launched two new categories around fire safety and indemnity insurance.
This is particularly useful for those looking to beat the stamp duty deadline as the insurance means the lender does not have to conduct a search on the property. The second category is ‘Composite Cladding / EWS1 Form’, which is useful for brokers to find lenders policies on properties with composite cladding. We created this category due to the number of requests from brokers. Due to issues around potentially unsafe cladding, there are currently clients who are struggling to both remortgage or sell their property as some lenders are hesitant to provide finance on what could be un-safe property.
WC 4th January
The year kicked off with news of another lockdown. The mood in the housing market was brightened however by the announcement that the industry could stay open. Viewings were still allowed, and valuers could still go to properties. This appeared to buoy the confidence of lenders, perhaps emboldened by the impressive resilience the market showed in 2020, and the first week saw four lenders increase LTVs: Coventry for Intermediaries, Barclays and HSBC returned to 90% LTV and Nottingham for Intermediaries increased its maximum to 85% LTV.
No lenders paused or pulled products and the only restriction came from Halifax, which made a temporary adjustment to those who are self-employed, introducing a maximum loan to income (LTI) of 4.49 times income.
WC 11th January
The pace of change picked up in the second week of January. Metro Bank re-introduced some 80% LTV products for those on furlough.
With lenders and everyone else creaking under the weight of demand to avoid stamp duty, Hampshire Trust Bank announced it would not accept new applications that required completion before the stamp duty holiday deadline.
Following the trend of growing confidence, Leeds Building Society increased its maximum LTV to 90%. There were also increases to loan sizes with Fleet Mortgages increasing its maximum loan size to £2 million and Aspen Bridging increasing to £5 million.
Despite the overall trend of loosening restrictions and criteria, there was still uncertainty for those who are self-employed as Santander temporarily reduced its maximum LTV to 60% for the self-employed.
With Brexit now taking effect, Saffron Building Society stopped ex-pat buy-to-let lending with immediate effect, but announced they would honour submitted applications currently in its pipeline. At the same time Precise Mortgages and Kent Reliance tightened criteria so, from 1st January 2021, all EU Citizens must provide a valid permanent residence document or evidence that settled status has been granted when applying for a mortgage.
With applications open for the latest iteration of the Help to Buy (HTB) scheme, The Cambridge Building Society introduced three new HTB products, all of which are available at a maximum of 75% LTV.
WC 18th January
This week saw the return of Knowledge Bank’s incredibly popular criteria clinics. Hosted by our founder and CEO Nicola Firth, this webinar focused on ‘joint borrower, sole proprietor’ mortgages. The interactive webinar brought together brokers and lenders to help place difficult cases.
The latest house price index from e.surv was released this week. It reported a 7.8% increase in house prices over 2020, the highest percentage increase since 2016.
Following the impressive growth in house prices and continued strong mortgage demand, confidence grew for some lenders. Gatehouse Bank reinstated its houses in multiple occupation (HMO) buy-to-let products, Accord Mortgages increased its LTI cap for households that earn £60,000 a year or more from 4.49 to 5 times income. Nottingham for Intermediaries, Hinckley & Rugby and Santander all increased LTV to 90%.
WC 25th January
This week lenders reinstated products, including Buckinghamshire Building Society, The Mortgage Lender, Loughborough Building Society and The Mortgage Works.
Buckinghamshire Building Society announced it would accept applications for a range of products including, family assist, impaired credit and expat buy-to-let.
Buy-to-let lender Landbay launched a new large loan product with lending available up to £1.5million. The trend for more lenders returning to 90% continued with Skipton for Intermediaries and Halifax increasing maximum LTV.
If January is anything to go by, it appears 2021 will be another year of incredible change. The last twelve months saw a record 52,000 criteria changes. While the pace may not hit the incredible levels of 2020, we have already seen a trend towards huge adjustments from lenders. With the end of the stamp duty holiday and furlough scheme on 31st March, brokers will need to use a criteria search system to ensure they are on top of every development.
