During the start of the year and following on from the end of last year we have been talking about mortgage lenders returning back to normal albeit very slowly. We can see this more and more with the introduction of 5% mortgages, lenders now willing to accept variable income such as overtime and commission and mortgages being given out more freely to the self-employed. I won’t go as far as to say we are back to normal but with things getting as close as they can back to pre-pandemic levels in terms of finance, you may say we are at a new normal.
The biggest clue that indicates whether lenders feel more comfortable and are happy to lend like before is interest rates. We have nothing but good news on this front with residential fixed rates starting at 0.99% for remortgage and 1.04% for purchases meaning that lenders once again have so much confidence in the market they are prepared to make little to no profit margin (yes you did read those interest rates right!). This is a massive win for the consumer and when you compound this with the stamp duty benefits it is no surprise we are seeing more purchases and house transactions than ever before even with a global pandemic!
Now it is not just residential rates which have put us in confident mood but buy to let rates also start of at 1.19% which is incredible considering they are usually at least 0.5% - 1% higher than residential rates. Again this is another massive win for the average consumer and money facts latest research shows that landlords searching for a deal will be very pleased to see that the overall two and five-year average fixed rates for all LTVs have dropped to the lowest levels since the start of this year. Once more his seems to show an appetite for business from lenders to cater to borrowers who are keen to invest. Indeed, we have seen rate reductions of as much as 0.90 per cent from TSB, while Virgin Money made cuts of up to 1.06 per cent on a selection of its products this month.”
Overall, we have seen mortgage lenders returning back to some form of normality with lower rate deposit mortgages, leniency in mortgage criteria compared to 12 months ago for the self-employed and variable income consumers and above all a reduction in rates! For all the suffering the finance sector and mortgage market has experienced during this pandemic, it does finally seem we are nearly on the other side and into a better world.
If you have any further questions, simply call 01707 872 000 and ask for Debbie Bell or or email Debbie Bell on Debbie.bell@kings-group.net.
