Over the past three weeks, a third of mortgage deals have been pulled from the market as Covid-19 causes property market chaos.
At the end of last week, governmental guidance urged buyers, sellers and stakeholders in the home buying and selling process to delays home moves wherever possible. Even before this, lenders were reducing the number of mortgage products available.
Thus far, Nationwide, Halifax and Barclays have made the decision to suspend high loan-to -value (LTV) mortgage products.
Buyers using Barclays and Halifax will now need to have a deposit worth 40 per cent of the home’s value if they are to use finance products with them as only 60 per cent LTV products are available in the current market.
Nationwide are offering 75 per cent loan-to-value products but this still means buyers need to have a deposit worth 25 per cent.
Through March, Moneyfacts found that available UK mortgage products fell from 5,239 to 3,654 mortgage deals, representing a fall of 30 per cent in less than a month.
Many claim that this could severely affect first-time buyers who would have usually used the Spring months to start their property journey. And the signs of a vibrant market recovering from a stagnant period restricted by Brexit uncertainty was there to be seen just one month ago.
Do you remember the ‘Boris Bounce’ the property sector was enjoying in the opening two months of the year? The Bank of England released its ‘Money and Credit’ report for February which suggested mortgage approvals were at their highest levels in over 5 years.
The report highlighted that mortgage approvals in February, which are considered an indicator for future lending, reached 73,500 approvals.
The Bank of England claimed this figure was significantly stronger than in recent years and brought the series to its highest levels since January 2014.
Approvals for remortgaging also rose on a monthly basis to 53,400 with the sector enjoying an annual increase of 3.5 per cent.
Figures like this may be months away but the release could highlight the desire to move and the speed with which the market could recover if the products are reintroduced once the UK recovers from the devastating impact of Covid-19.
