"There was less welcome news for buy-to-let landlords, with the announcement that the ban on evictions would continue for another four weeks"
But with the impact of the stamp duty holiday really beginning to make itself felt, demand has been high, and brokers have been hard at it trying to source the best deals.
August 1st is a special day for us at Knowledge Bank as it marks Yorkshire Day, when we celebrate everything that is great about Britain’s largest county. This year, it fell on a Saturday... so it’s probably best if we move swiftly along to the start of the following week.
Week commencing 3rd August
The papers at the start of the week were full of the Housing Secretary’s plans to reform the planning system. A White Paper duly appeared on Thursday 6th August, and provoked a mixed reaction. On balance, the industry concluded the proposals would make it easier to build new homes.
Lenders were also busy making changes: TSB led the way on Monday 3rd with a wide range of criteria changes across their residential and buy-to-let range, and Virgin and NatWest soon followed with changes to how they handle self-employed applicants.
As the furlough scheme continues to unwind, West Brom ended the week by announcing it would no longer accept applications from furloughed workers.
Week commencing 10th August
Although this was the week of the great A-level results fiasco, the second week of the month also brought confirmation of the strength of the market rebound since lockdown, as the Halifax House Price Index showed prices hitting an all-time high.
Perhaps in response to this, several lenders announced they were increasing maximum loan sizes on residential property, and Kent Reliance launching a large loan residential product with a maximum loan of £3m.
We also saw further evidence of the strong demand for holiday lets following the wave of foreign-travel restrictions. Vernon became the latest lender to enter this market with two new products.
Towards the end of the week, a report from the Royal Institute of Chartered Surveyors noted that new buyer enquiries and sales agreed had both risen – although RICS added a note of caution, that the current boom may not last.
Week commencing 17th August
Into the second half of the month, and criteria changes really began to hot up, including some welcome moves on LTVs. Notably, NatWest reviewed their LTVs and brought back some 85% options – although these products are not available for new-build. At the same time, Coventry reintroduced their offset range, and increased the maximum LTV to 85%.
Good news for first- and second-time buyers came with Tipton Intermediaries launching their ‘Flexible LTV Family Assist’ mortgage, which allows borrowing up to 99% LTV. The new product is aimed at first- and second-time buyers and requires 20% security which can be made up of a either a deposit and a charge on a family member’s main residence, or cash from the family member which will be placed into a Tipton Family assist savings account. The sum of the deposit can range from 19% with a 1%, to 1% with a 19% charge.
Another welcome move was the launch by Crystal Specialist Finance of their long-term health and wellbeing campaign for the intermediary sector. They are looking to looking to help individuals identify and overcome stress, illness and loneliness. We all need to look after ourselves and each other better, and clearly the last few months will have been particularly difficult for many in the industry.
The Office for National Statistics resumed publication of its regular house price index, which had been suspended in May, at the height of lockdown. The figures published only went up to April 2020, but showed that year-on-year house prices had increased by 2.6% – down from 3.5% in March.
Week commencing 24th August
As we moved towards the end of the month, with the prospect of a Bank Holiday weekend to come, and, for many people, the kids finally going back to school in September, it would have been easy to understand if this had been a quiet week. But nothing could be further from the truth.
Virgin Money announced the launch of a new 90%-LTV range with seven- and ten-year fixes for first-time buyers. The products consist of a seven-year fix with a £995 fee and a rate of 2.99% with a fee free version at 3.09% The ten-year fix also has a £995 fee and a rate of 3.09%, or there is a fee-free version at 3.19%.
There was less welcome news for buy-to-let landlords, with the announcement that the ban on evictions would continue for another four weeks, and that landlords would be required to give six months’ notice for evictions (unless anti-social behaviour or domestic abuse are involved). This raises the prospect of prolonged void periods.
The week was rounded off with more lenders changing how they view furloughed applicants. NatWest made changes to their income assessments for borrowers who are currently on furlough or have been furloughed during the coronavirus pandemic. The changes do not include criteria for customers on furlough who have yet to receive a return to work date. Skipton also announced they will no longer be including furloughed income within their affordability assessment for residential and buy-to-let applications.
Ending the week, and the month, and heading into the Bank Holiday on a more positive note, we also saw news from West Brom, announcing the reintroduction of products up to 85% LTV for residential purchase and remortgage.
