Lending in 2020 was massively impacted by the COVID-19 pandemic. In April 2020, due to the lockdown, we saw the property market come to a sudden halt and lenders started to withdraw products from their lending portfolios, mainly those that required the smallest deposits. It was reported, at the time, that before the lockdown there were over 700 mortgage products available that required a 10% deposit or less, this dropped to around 60 products post lockdown*. The impact on the first-time buying market was massive and as a result many were unable to get a foot on the ladder due to the new level of savings required.
90% LTV mortgage
2021 has brought some good news with many of the high street lenders moving back to offering 90% products and also some of the specialist lenders dipping their toes back in the water.
As a few lenders start to offer 90% mortgage products, which means the customer needs a 10% deposit, other lenders will start to follow the trend and offer them to, thus giving more choice to customers. This return to a wider choice, means you are likely to be better to speak to a mortgage adviser such as Clever Mortgages who can look across the mortgage market to find you the most suitable product and lender.
We may also find as the lenders confidence grows, we start to see more lenders offering 95% mortgages, with the customers putting down 5% of their own funds.
Furthermore, the more lenders offering these products it creates competition to obtain business and this has seen interest rates charge for a mortgage reduce. Nationwide have already announced a cut across their 90% product range.
Most of the high street lenders are stipulating the higher loan to value, 90% lending products are for First Time Buyers only, such as Halifax, Barclays and Virgin Money but there are some lenders that will look at Next Time Borrowers such as:-
There are also a hand-full of lenders who will offer a higher loan to value products to borrowers who have had credit issues in the past, such as low credit scores or bad credit. However, each lender will have different criteria and restrictions regarding lending therefore it is always best to speak to a specialist, such as Clever Mortgages who are on hand to help you with your borrowing needs.
To find out more about your options give us a call on 0800 197 0504 or chat to us on our website www.clever-mortgages.co.uk.
*BBC news article 3rd September 2020