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Stamp duty freeze leads to ‘busiest’ week for mortgage searches

The week following the stamp duty holiday announcement has been the busiest for mortgage searches all year, according to mortgage technology provider Twenty7Tec.

Yesterday (Tuesday 14 July) experienced the greatest number of searches in the year to date, highlighting how much of an impact the chancellor’s announcement to cut stamp duty has made on the market.

There was also a flurry of activity in the buy-to-let sector which had not been experienced since February. Twenty7Tec reported this week has been the busiest for buy-to-let searches, according to its platform’s data.

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Today marks exactly one week since chancellor Rishi Sunak announced he was freezing stamp duty on properties worth up to £500,000 until March 2021.

Phil Bailey, Sales Director at Twenty7Tec said: “Since the stamp duty announcement last week, the market has really hit its stride.

“The last seven days have been the busiest for mortgage searches all year and we’re handling increased volumes of searches each day. Yesterday was the busiest day of the year, closely followed by the day before. Yesterday’s residential mortgage searches were triple the volumes in lockdown.

“Buy-to-let has definitely pushed on and the past few days have been the busiest since the first couple of weeks in February.

“Our sense is that buy-to-let will increase further as the products are there for that part of the market and the risk profile of buy-to-let is still attractive to lenders.”

By Kate Saines

Source: Mortgage Finance Gazette

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Borrowing is on the way to returning to healthy levels

Despite Bank of England figures that showed mortgage approvals hit a record low of 9,300 in May, there are signs that borrowing is returning to normal levels, according to Hometrack.

The Bank of England’s Money and Credit Report showed that households repaid more loans than they took out in May, but that there was still a small increase in mortgage borrowing.

On net, households borrowed an additional £1.2bn secured on their homes, higher than £0.0bn in April, but weak compared to an average of £4.1bn in the six months to February 2020.

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David Ross, managing director of Hometrack, said: “The data released by the Bank of England is encouraging and shows that borrowing, while not at pre-COVID levels, is certainly returning.

“On a more positive note our data for June shows continued growth and is up on the same period in 2019.”

For the market to return to normal, Ross added, providers must continue to innovate and focus on the customer.

He said: “Continued stimulus is key to maintaining this growth.

“We urge mortgage providers to focus on delivering the very best customer experience, removing complexity through digitisation and ensuring fewer barriers to borrowing.

“This in turn will help grow new lending, helping the economy get back on its feet after the shock of COVID.”

By Jessica Bird

Source: Mortgage Introducer

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Fleet launches 70% and 75% LTV products across core ranges

Fleet Mortgages has launched 70% and 75% loan-to-value (LTV) products across its three core product ranges: standard, limited company and HMO.

On the standard front 2-year fixes are priced at 3.44% for 70% LTV and 3.64% for 75% LTV, both with a 1% fee and an ICR of 125% at 5.5%.

The lender is also offering 5-year fixes priced at 3.74% for 70% LTV and 3.79% for 75% LTV, both with a 1.5% fee and an ICR of 125% at 5.5%.

For limited company buy-to-let 2-year fixes are available at 3.54% for 70% LTV and 3.74% for 75% LTV, both with a fee of 1.25% and an ICR of 125% at 5%.

Its 5-year fixes at 3.85% for 70% LTV and 3.90% for 75% LTV with a fee of 1.5% and an ICR of 125% at the initial rate.

For HMOs 2-year fixes at 70% LTV of 3.54% with a fee of 1.5% and an ICR of 125% at 5.6%, and a 5-year fix at 70% LTV of 3.94% also with a 1.5% fee and an ICR of 125% at the initial rate.

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Fleet said that the introduction of the new products at the higher LTVs follows positive discussions with its funders and its appetite for business would be constantly reviewed in line with ongoing market conditions.

Steve Cox, distribution director of Fleet Mortgages, said: “It’s incredibly positive for us to be able to announce these new 70% and 75% LTV products across the three core areas of our business, and to be offering more options to our adviser and distributor partners, and their landlord clients.

“This is the next step for us as a lender post-lockdown, and it comes as a result of excellent discussions with our funders and their confidence in our ability to deliver these loans.

“That said, the capital markets are not yet near a ‘business as usual’ position as this can’t be a light switch that we can turn on, even with the housing market reopening and especially since physical valuations can now take place.

“Our funders want us to approach this market cautiously and, to that end, our appetite for lending is still going to be subdued, but slowly climbing.

“However, we believe this is good news for the market and means we can begin again to re-engage with intermediaries at a higher LTV level and offer them more options for those landlord clients who are seeking finance.”

By Ryan Fowler

Source: Mortgage Introducer

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BoE: New mortgage commitments up 6.1% in Q1

The first quarter of 2020 saw a 6.1% year-on-year increase in the value of new mortgage commitments (lending agreed to be advanced in the coming months) to £67.6bn, according to the latest figures from the Bank of England.

The BoE’s data also revealed that the outstanding value of all residential mortgages loans was £1,509bn at the end of 2020 Q1, 3.9% higher than a year earlier.

Overall the value of gross mortgage advances in 2020 Q1 was £65.8bn, 3.8% higher than in 2019 Q1.

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Tomer Aboody, director of property lender MT Finance, said: “Overall, and as expected, the lending market enjoyed a great first quarter with plenty of confidence, more lending done and higher loan-to-values offered by the banks, along with cheaper mortgage rates compared with the same period a year ago.

“This was set to be the trend for the year ahead after years of uncertainty created by Brexit.

“Then the pandemic hit and the picture in the second quarter will be very different. But what it ultimately shows is that the fundamentals are there.

“Lenders are keen to lend and now, as we wait for lockdown to end, we need some stimulus from the government to give the housing market the boost it needs.”

By Ryan Fowler

Source: Mortgage Introducer

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Strong mortgage lending in first quarter of the year

The first three months of 2020 saw a rise in mortgage lending before the coronavirus lockdown took hold.

Gross mortgage advances in the first quarter of 2020 totalled £65.8 billion, 3.8% higher than in Q1 2019, the latest figures from the Bank of England show.

This takes the outstanding value of all residential mortgages loans to £1,509 billion at the end of March 2020, which is a rise of 3.9% from a year earlier

The value of new mortgage lending agreed to be advanced in the coming months was 6.1% higher than the previous year, at £67.6 billion.

Almost three quarters (73.2%) of the share of gross advances had interest rates of less than 2% above Bank Rate in Q1 2020. This is 10.2% lower than a year ago and was driven by the 65bp cut in Bank Rate in March rather than any significant change in mortgage interest rates.

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The share of mortgages advanced in Q1 2020 with loan-to-value ratios exceeding 90% was 5.2%,up by 0.7% from a year ago.

Buy-to-let lending, including house purchase, remortgage and further advance, represents a 14% share of gross mortgage lending, unchanged from Q1 2019.The value of outstanding balances with some arrears increased by 1.8% over the quarter to £13.7 billion, and now accounts for 0.91% of outstanding mortgage balances.

Commenting on the figures, Mark Harris said: “The Bank of England data relates to the first quarter of the year when the impact of Covid-19 had not yet been felt.

“While this makes it feel very historic, it does show what might have been had the pandemic not hit, with an increase in gross mortgage advances compared with the previous year, as well as the value of new mortgage commitments.

High LTV

Harris continued: “The share of mortgages advanced to borrowers requiring a loan-to-value greater than 90% was 5.2%, an increase on the previous year, illustrating the level of demand for high LTV deals.

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“With lenders including Accord, Clydesdale and Virgin Money pulling out of the 90% LTV market this week owing to high demand, after only recently returning when physical valuations were once again allowed, there is clearly a need for the big lenders to commit to this market.

“The number of people taking out high LTV mortgages in the second quarter is likely to fall considerably, not due to lack of demand but lack of products available.

A spokesperson for Virgin Money commented: “We’ve been one of only a few lenders offering 10% deposit products, however we have seen strong increases in demand from customers with small deposits.

“To protect the service for existing customers as well as pipeline applications, we are temporarily withdrawing our 90% LTV products. These products will still be available for existing customers looking to do a product switch. This change means we can continue to focus on providing existing customers with the level of service they’ve come to expect.

Buy-to-let

Referring to the buy-to-let figures, Harris said: “Encouragingly, buy-to-let lending was stable, even though the sector has come in for a lot of change on the tax and regulatory front. Investors are adapting to the new environment and tailoring their portfolios accordingly.

“The impact of tenants unable to pay their rent is providing a further challenge for landlords, although of course this won’t be apparent until the second quarter figures.’

By Joanne Atkin

Source: Mortgage Finance Gazette

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London and the south buck the trend as mortgage market flattened in Q1

The coronavirus pandemic may have flattened mortgage approvals across the UK but there are still hotspots of activity, UK Finance data has revealed.

A household finance review for the first quarter of 2020 by banking trade body UK Finance shows mortgage approvals slumped on average across the country but still increased in some parts for first-time buyers and home movers.

This suggests there could still be demand for estate agents to tap into now the market has reopened.

The figures show that mortgage approvals for first-time buyers fell across the UK but were up in the south east of England and London by 3% and 5% respectively during March when the market was on lockdown.

There were large drops elsewhere though, with approvals in Yorkshire down 16% and the north of England registering 20% drop.

The data also shows that while approvals for home mover mortgages were down overall, they rose in each month of the first quarter of 2020 in London, the south east of England and Northern Ireland.

Home mover approvals were also up annually in Wales, the south west of England and East Anglia during March but fell by more than 10% in the north of England and in Scotland.

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There was some good news for the lettings sector as buy-to-let approvals rose 7% over the quarter.

UK Finance also warned of a modest pick-up in arrears towards the end of the quarter as the Covid-19 pandemic began to impact home owners, but said the level is still lower than a year ago.

The trade body said:

“It is likely that the significant disruption to activity over the quarter is creating some noise in the data and a clear picture of how trends have evolved in different parts of the country should become more apparent in the coming quarters.

“While regional house purchase year-on-year growth shows variances, the picture for the whole of the UK was fairly flat.”

By MARC SHOFFMAN

Source: Property Industry Eye

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Broker confidence holding up

Broker confidence holding up. Some 71% of brokers are confident in the mortgage market’s prospects in the next 12 months, despite the difficult few months they have encountered.

The research, from Masthaven, found that only 3% of intermediaries are not confident.

Rob Barnard, director of intermediaries at Masthaven Bank, said: “Broker confidence is holding up well and that’s such an important part of the market, as it directly feeds through into the conversations intermediaries are having with customers.

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“Now that the housing market has reopened and with the news that mortgage payment relief may be extended to help those customers in need, it’s good to see positive sentiment for the next twelve months from the intermediary community.”

More than half (51%) of specialist lending intermediaries are using video calls to liaise with their customers, while 42% are sending regular email updates.

Nearly a third (32%) of specialist lending intermediaries said that they are recommending lenders based on their access to reliable funding.

BY RYAN BEMBRIDGE

Source: Property Wire

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Masthaven: Three quarters of brokers confident of mortgage market prospects

Almost three quarters (71%) of intermediaries remain confident in the mortgage market’s prospects for the next 12 months, despite the ongoing coronavirus crisis, research from Masthaven Bank has found.

In a survey of more than 200 intermediaries conducted in May some 65% said they were confident whilst 6% said they were very confident – a quarter said they were unsure.

Only 3% of intermediaries surveyed said they were not confident in the market’s prospects for the coming year.

Rob Barnard, director of intermediaries at Masthaven Bank, said: “Broker confidence is holding up well and that’s such an important part of the market, as it directly feeds through into the conversations intermediaries are having with customers.

“Now that the housing market has reopened and with the news that mortgage payment relief may be extended to help those customers in need, it’s good to see positive sentiment for the next twelve months from the intermediary community.”

The survey also found that more than half (51%) of specialist lending intermediaries are now using video calls to liaise with their customers, while 42% are sending regular email updates.

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A small proportion of brokers have introduced live chat platforms on their websites (4%) or extended their opening hours (2%) since the start of the pandemic.

Nearly a third (32%) of specialist lending intermediaries said that they are recommending lenders based on their access to reliable funding.

Jon Hall, chief commercial officer and deputy CEO at Masthaven Bank, said: “Masthaven has remained open for business throughout the crisis.

“We have continued to work with intermediary partners to ensure they have access to a good range of competitive products.

“We have adapted our service offerings, launching a fee-free remortgage range in response to broker demand and increased our use of AVMs where physical valuations have not been possible. Our offices may be closed but we remain open for business.”

By Ryan Fowler

Source: Mortgage Introducer

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One in nine UK mortgages now subject to a payment holiday

The number of mortgage payment holidays in place more than tripled in the two weeks between March 25 and April 8, UK Finance said.

More than 1.2 million mortgage payment holidays have been provided to home owners whose finances have been hit by coronavirus, according to a trade association.

This equates to around one in nine (11.2%) mortgages across the UK now being subject to a payment holiday, UK Finance said.

For the average mortgage holder, the payment holiday amounts to £260 per month of suspended interest payments.

For a mortgage where chunks of the capital (the amount borrowed) and interest are normally being repaid, the average payment holiday equates to around £775 of deferred payments each month.

Lenders announced on March 17 that they would support customers facing financial difficulties due to the Covid-19 crisis.

People who are struggling to make their payments, perhaps because they have had a pay cut or their work has temporarily stopped due to Covid-19, can request a mortgage payment holiday of up to three months.

Payment holidays are available to customers who are up-to-date on their mortgage payments. People taking up this option will still owe the money and interest will still accrue.

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Home owners applying for a mortgage payment holiday will need to self-certify that their income has been either directly or indirectly impacted by coronavirus.

UK Finance has said firms will make every effort to ensure these do not negatively impact on credit files.

The number of mortgage payment holidays in place more than tripled in the two weeks between March 25 and April 8, growing from 392,130 to 1,240,680. This is an increase of nearly 850,000 or an average of around 61,000 payment holidays being granted by lenders per day.

Stephen Jones, UK Finance chief executive, said: “Mortgage lenders have been working tirelessly to help home owners get through this challenging period. The industry has pulled out all the stops in recent weeks to give an unprecedented number of customers a payment holiday, and we stand ready to help more over the coming months.

“We understand that the current crisis is having a significant impact on household finances for people across the country. Lenders have a number of options available to help, and payment holidays aren’t always the right solution for everyone. We would therefore encourage any mortgage customers concerned about their financial situation to check with their lender so they can find out more information on the support available and how to apply.”

Robin Fieth, chief executive of the Building Societies Association (BSA), said: “We know that this is a difficult time for many home owners with a mortgage, and building society staff have been working hard to offer individuals the right solution. For almost quarter of a million so far, that has been a three-month payment holiday offering much needed breathing space to families whose household income is under severe pressure during the current crisis.”

UK Finance said telephone lines remain extremely busy so customers who are concerned about making their mortgage payments are advised to look at their lender’s website in the first instance, which will include the latest information on the support available.

Many lenders are offering customers the option to apply for a mortgage payment holiday through an online form on their website.

Lenders are also urging mortgage holders not to cancel their direct debits before a payment holiday has been agreed, as this will be counted as a missed payment and could impact their credit file.

Source: Express & Star

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Remortgage activity at ‘new normal’ after social gathering rules

Remortgage instructions have fallen by 20% since the government unveiled its restrictions on social gatherings in mid-March.

Since then volumes have been fairly steady at a lower level.

Tighter lending criteria, consumer income reduction & unemployment, and loss of all physical contact are all having an impact.

The research comes from conveyancing solutions provider LMS, which is publishing a weekly update of remortgage activity during the crisis.

Nick Chadbourne, chief executive of LMS, said: “Despite the stepped drop in the middle of March, we are seeing healthy volumes entering the pipeline and existing remortgage business is continuing to be processed as usual. We can also cautiously predict a strong April, thanks to a peak in ERC expiries and a strong pipeline compared with the previous month.

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“March 16th was a critical moment for lenders, with many removing +80% LTV products and limiting the progression of complex cases, delivering the drop in instructions we witnessed.

“The remortgage sector remains fully open for business, and as it refines processes and adapts to this new situation, capacity will only increase. We’re in uncharted waters to some extent, but knowing how the market is performing in real time could make a big difference for firms attempting to navigate their way through the crisis. As such, we’ll be sharing information on as many useful data points as we can.”

Completions dropped in the second half of March, in part reflective of the usual trend of numbers trailing off from the start to the end of the month.

However LMS said initial signs from April are very positive.

Volumes are 30% up month-on-month and are ahead of 2019 activity, largely down to a peak in ERC expiries, with 11% of all ERCs for 2020 coming in April.

Looking forwards, there appears to be some slowing of pipeline activity due to processing challenges such as access to redemptions statements, and the extension of funds request timelines by lenders to allow everyone to manage capacity.

LMS said it was reassured by the current level of activity, which demonstrates that the mortgage industry is finding solutions by handling cases remotely.

Mortgage restrictions are primarily impacting complex cases, with a reduced range of products available to this group.

As a result, to avoid ticking onto their lender’s SVR, some individuals will have to opt for an alternative solution, such as taking a payment holiday while the market rebalances

Over time, LMS said it expects restrictive criteria to loosen as lenders start to understand the risks and opportunities around AVMs (automated valuation models), with desktop valuations for more complex work and deals becoming available in the future.

BY RYAN BEMBRIDGE

Source: Property Wire