Economic uncertainty leads to banks and mortgage providers feeling the strain06/04/20
The property market is a complex beast sensitive to economic uncertainty. The unprecedented circumstances we are experiencing, thanks to COVID-19, have resulted in the market becoming stagnant, with few new properties coming to the market. This is due to government advice to make only essential journeys.
The government has also advised that people should not move home during the pandemic, unless absolutely necessary. Banks and mortgage providers are feeling the strain. Some mortgage providers, such as Santander and Skipton Building Society, are not accepting new mortgages with a Loan To Value (LTV) of less than 40%, while Nationwide will now only offer home loans to those with 25% equity or more.
The recent withdrawal of many higher LTV mortgage products and home purchase products is hopefully a temporary measure while lenders reassess risk in this area of the market and work out what it will be possible for them to offer while the current restrictions are in place.
If you think you'll struggle to make your monthly mortgage payments because of coronavirus, some mortgage lenders are offering help by way of a 3-month payment holiday. A mortgage payment holiday is a break from paying your mortgage. Importantly, it won’t affect your credit rating, so there’s one less thing to worry about.