How the UK Mortgage Market Has Changed Due to Coronavirus
30 June 2021
Independent mortgage adviser David Lauder, states how the UK mortgage market has changed due to the impact of the COVID-19 Pandemic.
Due to the pandemic, the mortgage world is different and now includes greater restrictions on lending and stricter assessment of documents and general criteria.
The Impact Coronavirus Has Had on Mortgage Deposits
One of the biggest changes that the COVID-19 Pandemic has caused, is that the majority of 2020 mortgage lenders raised their minimum deposit levels to 15% compared to 5% before the pandemic hit (this is based on the purchase price or Home Report valuation of the property, whichever is the lower figure).
However, early 2021 saw lenders starting to offer 10% deposit mortgages. The UK Government also introduced the mortgage guarantee scheme to help 5% deposit mortgages back to the property market.
How Being on Furlough Affects Your Mortgage Application
Another important change is that the majority of mortgage lenders are asking if clients have been affected by furlough. Lenders will usually only use your full income if you have returned to work or can provide evidence of a return to work in the near future.
Mortgages For the Self-Employed During the COVID-19 Pandemic
Those who are self-employed are also being assessed more rigorously with questions being asked about how their businesses have been affected by COVID-19 and their business bank statements being regularly asked for to analyse how the business has performed during this time.
Mortgage Applications Taking Longer
Due to the current services and high volumes being submitted, we are finding that mortgage applications and generally taking longer to be assessed. The average two to three week turnaround for straightforward cases to be approved could potentially now take four to five weeks.