ao link
0 £0.00
This item was added to your basket
Credit Strategy homepage
LinkedIn
Twitter
Intelligence, Insight and community for responsible professionals in credit

Coronavirus concerns cause chilling effect on mortgage market

As many as a third of mortgage deals have been taken off the market in just three weeks as a result of the Covid-19 crisis, according to price comparison site Moneyfacts.

Today (April 1, 2020), there are 3,654 total residential mortgage deals on offer from banks and building societies in the UK, down from 5,239 deals that were available on 11 March – a difference of 1,585.

 

Last week, the government issued guidance to postpone many house purchase transactions until the current social distancing measures have eased. As a result, many banks and building societies have agreed to extend mortgage offers where completions have to be delayed.

 

It has also resulted in a number of providers limiting their ranges for new customers to those products available for remortgage borrowers only.

 

Some lenders have made the decision to reduce their exposure to risk and withdraw their higher loan-to-value (LTV) products, with some providers now offering deals at a maximum of 60 percent.

 

Eleanor Williams, finance expert at Moneyfacts, said: “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. With so much uncertainty at the moment, providers seem to initially be focusing on the support that their existing customers may need in the coming weeks.

 

“However, there may still be borrowers sitting on their provider’s standard variable rate (SVR) waiting to see what the impact of these rate cuts will be and by how much their monthly payments will reduce. With the difference between the average two-year fixed mortgage rate and average SVR standing at 2.39 percent today, the benefit of switching to a new deal while rates are low is evident for those eligible, and would protect these customers from interest rate volatility in the future.

 

“We have to hope now that the mortgage market is able to rebound as quickly as we have seen it contract, once we begin to come out the other side of the Covid-19 crisis.”

Please login to continue reading this article.

Not a member?

Become a member

FREE registration. No credit card required

Register now
  • Stay up-to-date with industry news and appointments
  • Hear about events first
  • Read 1 free Premium article per month

Become a premium member

From as little as £3.48 per week

Become Premium
  • All the perks of a standard member plus:
  • Access to the entire Credit Strategy website
  • 12 months subscription to Credit Strategy Magazine
  • 25% discount to all conferences
  • Exclusive access to Premium Member only roundtables
  • 50% off award entry fees

GET THE LATEST INDUSTRY NEWS STRAIGHT TO YOUR INBOX

Upcoming events

Credit Strategy
LinkedIn page

Member of

Did you find our website useful?

Thank you for your input

Thank you for your feedback

creditstrategy.co.uk – an online news and information service for the UK’s commercial and consumer credit industry. creditstrategy.co.uk is published by Shard Financial Media Limited, registered in England & Wales as 5481132, Axe & Bottle Court, 70 Newcomen St, London, SE1 1YT. All rights reserved. Credit Strategy is committed to diversity in the workplace. @ Copyright Shard Media Group