"It also enables us, as brokers, to then monitor the market and adapt the advice if need be before completion."
Brokers have applauded lenders like the Skipton who honour mortgage rates up to 12 months from the point of offer for all applications, whether purchase or remortgage.
They say this approach is particularly positive for people buying new builds, as it protects them from building delays, and offers borrowers in general all-important peace of mind at a time of extreme economic uncertainty.
Newspage asked brokers for their views on 12 month mortgage offers:
Matthew Jackson, director at Mint FS: "12-month mortgage offers, as provided by the likes of the Skipton, are exactly what the market needs at a time of such extreme economic uncertainty. They empower borrowers to lock in an interest rate for purchase or remortgage that will be valid for up to as long as 12 months. This provides all-important certainty when certainty is in short supply. It also enables us, as brokers, to then monitor the market and adapt the advice if need be before completion. I love it when lenders show some creativity not just to help clients but to support the broker community as well. Chapeau to the Skipton."
Jamie Lennox, director at Dimora Mortgages: "Skipton have offered flexible solutions for a long time now and they have been a great help to borrowers. A 12-month offer provides borrowers with much needed reassurance. In relation to new builds, NatWest also provides borrowers an initial offer of six months with two further extensions of three months and they can keep the same rate for that duration. Halifax also have a whole new build range where the rate is valid as long as completion takes place by 31st December 2023. What this highlights is the importance to seek expert advice when buying a new build, as often they are sold six months in advance and regularly experience delays along the build schedule, leading to many mortgage offers expiring."
Elliott Benson, owner and mortgage broker at Sett Mortgages: "The 12 month mortgage offer is a really positive development in the mortgage market as one of the great unknowns when people, especially first-time buyers, are buying a new build property is whether completion will take place on time. It can be really distressing having the completion date be moved time and again and so having the security of a 12 month offer from a lender is a real bonus that will provide borrowers with extra peace of mind."
Austyn Johnson, founder at Mortgages For Actors: "One year offerings like this will mean that some of the new developments that are being built, and are forecast to take up to a year to be ready, can now have that original mortgage offer in place for a speedy completion. Given that many properties that are being developed often go under offer within a day or two of a shovel breaking ground, these kinds of products are good news for buyers and should be applauded."
Rob Peters, principal at Simple Fast Mortgage: "Before the recent market volatility triggered by the mini-Budget, many lenders offered extended mortgage completion dates for new builds. Many of those deals disappeared overnight because of the risk the lender could be losing money in the future. Kudos to the Skipton and Halifax for keeping these in place and continuing to provide products that are perfectly suited for the new build market."
Natalie Hines, founder at Premier One Mortgages: "This is good news from the Skipton. NatWest will also extend an offer on new builds up to 12 months. I’ve only recently had a case where we’ve used the full flexibility of a whole year mortgage offer. I have been particularly impressed with NatWest."
Lewis Shaw, owner and mortgage broker at Riverside Mortgages: "While it's great to see lenders adapting to market conditions, we always need to be aware of the law of unintended consequences. For example, what if a mortgage has been offered, then rates change significantly, and Skipton is left with a load of lending they don't complete? We could easily see brokers and lenders become even busier fools. In my humble opinion, lenders, borrowers and brokers would be better served by improving the conveyancing process rather than giving chains more slack because they will take it. If everyone in the industry worked towards a better legal solution we would all benefit."
