Mortgage Deals Show Signs of Life as Lender Restrictions Relax
The past month or so brought little other than doom and gloom for prospective
homebuyers across the UK. As of this week, it seems there is finally light at the
end of the tunnel for British borrowers on the lookout for a competitive home
As a knock-on effect of the coronavirus lockdown, many of the UK’s biggest
lenders had previously scrapped many deals aimed at first-time buyers and
those with minimal equity in their current properties. Examples of which
included Nationwide, Halifax, Santander and Virgin, who were asking for
deposits of at least 40% from all home loan applicants.
Today, the Halifax announced that its maximum loan-to-value (LTV) would
once again be increased to 85%. Nationwide likewise announced a resumption
of 85% LTV mortgages, while Virgin Money reintroduced purchase mortgages
to its portfolio.
At Santander, fees and charges on residential mortgages have been significantly
reduced, while maximum loan sizes have been increased once again from
£300,000 to £500,000.
Experts have commented that lenders are showing signs of adapting to current
pressures, rather than cutting themselves off from the consumer market.
Initial Restrictions Cautiously Relaxed
As the UK was forced into mandatory lockdown due to the Covid-19 outbreak,
lenders across the country were forced to make immediate adjustments to cope
with the new restrictions. One example of which being Nationwide – the biggest
building society in the UK – which immediately withdrew all mortgages with an
LTV of 75% or higher.
According to the lender, the adjustment was necessary in order to “focus on
supporting existing mortgage members, while continuing to process ongoing
Lenders needed to figure out viable ways to maintain operations at a time when
their offices and mortgage processing hubs were facing the prospect of home
working or furlough for their staff. Home working is still the norm, but lenders’
adjustments to working practices in the meantime have enabled them to begin
cautiously relaxing prior restrictions.