"With positive changes over the last three months to lending criteria and many mortgage lenders returning to the 90% LTV market, mortgage lenders also seem more optimistic."
House price growth was very strong in the last half of 2020 and I expect demand to be much the same this year. Although there is lots of talk about a possible market correction, I think this is unlikely and believe more money will be pumped into the housing market to help boost the economy.
With positive changes over the last three months to lending criteria and many mortgage lenders returning to the 90% LTV market, mortgage lenders also seem more optimistic.
Some lenders like Foundation Home Loans, have gone one step further and bolstered their teams to manage the unprecedented demand from buyers trying to cash in on the stamp duty holiday, which is another promising sign.
There are of course several parties who have not fared so well, and something needs to be done quickly to help those affected. The self-employed, especially limited company directors and new businesses have had a rough ride throughout the pandemic and are still being scrutinised way too much by lenders.
More also needs to be done to give lenders the peace of mind they need to help the thousands of people who are unable to currently sell or remortgage their property, due to EWS1 form requirements.
Accurate desktop valuations and quicker underwriting will also be essential in keeping the market moving in 2021. Whilst desktop valuations are certainly getting there, they are miles out when they are wrong, and much still needs to be done to improve the underwriting process.
Halifax have a fantastic model where applications with straightforward income are underwritten over the phone and a decision is given within 24 to 48 hours. So, surely in a time when most of us are and may continue to work from home, it would make sense for other lenders to follow suit?
Overall, I am optimistic about what lies ahead and strongly believe it will be the year in which we overcome our challenges. I also believe that we will take the lessons that the pandemic has taught us and use them to effectively modernise and drive the industry forwards.
