Covid-19 Advice and FAQ

It’s been the case for a while that levels of mortgage approvals are an important indicator of housing market activity, at least in the short term.

So it was good news when the Bank of England reported earlier this summer that recent figures had exceeded expectations.

In June, UK banks approved a hefty 40,000 mortgage applications, compared with a drop in May to just 9,300 at the height of lockdown. It’s also worth noting that, for June, analysts had predicted just 34,000 approvals, meaning the actual figure was significantly higher.

In the interests of context, we should also point out that, despite the important improvement, this is still relatively weak compared with numbers before Covid. However, estate agents up and down the country have still welcomed the news.

And as one industry insider and ex-RICS chair commented, because approvals tend to reflect stats which are slightly in the past, latest figures do not reflect the surge in demand for mortgages and new homes experienced since the easing of lockdown.

Clearly, households are taking advantage of historically low interest rates, and the government’s stamp duty holiday, on which we have reported previously.

One leading estate agent stressed that tax changes and currency fluctuations could also be having an impact. It added that clearly interest rates were going to stay at their record lows, or close to them, at least for the foreseeable future.

Equally, it’s unclear at this stage whether there would be room for Chancellor Rishi Sunak to do more to stimulate the property market in his forthcoming autumn budget. But more incentives could be on the way.

More deals back on the market

What’s more, as the economy has gradually reopened, more mortgage products are starting to reappear on the market from some of the UK’s leading lenders.

Mortgage offers often depend on loan-to-value or LTV ratio, which determines how much is needed for a deposit. If you’re only able to afford a smaller deposit, you’re likely to need a higher LTV home loan. Now lenders including Metro Bank, Nationwide and HSBC are once again starting to offer up to 90% LTV mortgages.

And according to financial information analysts Defaqto, 10 new fixed-rate home loan products have recently become available, meaning that there are nearly 30 higher LTV offerings around. (However, some of these products may be available for a short while only, possibly even for just a matter of days, so you’ll need to act quickly.)

 

What we at Oakfield say

Oakfield Estate Agents’ Sale Director Kerry Newstead commented:

Like others in the industry, at Oakfield we’re delighted at both the range of newer mortgage products available on the market at the moment and the direction of travel of numbers of home loan approvals. We’re convinced these things can only be great news for the industry and economy as a whole. And we hope that lenders will continue to look on new applications as favourably and flexibly as possible, while, of course, still behaving responsibly.

This also bears out what we’ve seen all along in terms of being very busy across all our areas throughout lockdown and even more so since the easing of restrictions. So frankly we’re not all that surprised, but we’re convinced that business will continue to be brisk in the months ahead, and that demand for mortgages will remain high.

What we offer

At Oakfield, we enjoy a close working relationship with Lodestone Financial Planning, based locally to us in Eastbourne. They offer access to dozens of providers of home loans, and fully appreciate the importance of a home and mortgage to borrowers’ lives.

They work closely with our prospective buyers to discuss their individual needs and situation, exploring the best options in detail before coming up with the product that is best suited to that borrower’s requirements.

Get in touch, emailing us in the first instance. We’ll be glad to put you in touch with Lodestone, who will be able to offer you expert advice on your mortgage options, and then we can talk to you about your next move in Eastbourne, Bexhill or Hastings. Get the ball rolling today.