As expected, the coronavirus effect is showing on the mortgage market of the UK. The short but effective lockdown of the lending industry finally gives a worrying picture of mortgage approvals in 2020. The coming months are almost sure to see a slow pace and less growth.
Above 1,50,000 first time, mortgage buying cases will lose their approval chances. The widespread destruction in financial lives caused by the pandemic has made many borrowers start their struggle again. Currently, when they are struggling even on the household expenses, how can they show ample repay capacity against a huge size mortgage?
Lenders want to get back to normalcy faster – BIG concern on profit
The lenders are desperate to do business, and that is why most of them are back now with the higher LTV products. Those who dragged down their LTV level to 60% are now ready for a comeback with the less deposit more loan culture. However, still, the struggle is ON as they cannot do anything if the applicant is extremely weak in personal finances.
The existing applicants have to rely on their mortgage broker to let their applications stay in the process. The high street lenders have given instructions to all the broking companies to mention the exact detail of the latest income of the applicant.
Government loss anticipation
According to the latest estimations, the Government will face a loss of £4.4bn on stamp duty and £1.6bn on VAT. The estate agent Knight Frank expresses the need for stamp duty holiday to help the mortgage market revive.
Although through the virtual meetings with the local agents, brokers and lenders, the market is still breathing, it is not sufficient. The industry experts say that the Government will face loss, but individual efforts are necessary to support to get back to the good old days. The first time buyers are in the prime focus as they give a considerable part of the profit to the lending industry.
The ultimate solution is perhaps only in the hands of the time. The mortgage providers, brokers, government all are working collectively to help the buyers. However, the economic turmoil will not miss dominating the result of every effort. But that does not mean that there is no hope. By the end of this year, things are sure to become healthy.