How is the COVID-19 Pandemic Influencing the Mortgage Market in the UK?
While the world is fighting an invisible enemy threatening our health, in the backdrop the global economy is slowly suffering. Many of us are speculating on what will happen and if we’ll recover from a pandemic to be hit by an economic crisis. What about the housing market and mortgages?
Luckily the situation is not as dark as news headlines will share. We are already seeing some changes in the mortgage market. Many banks pulled their deals for loans and mortgage because of the uncertainties with employment. The number of mortgage offers has rapidly dropped, most evident with thousand of offers removed from the UK market, just in the last month.
However, lenders are now coming back with new mortgage offers. Financial experts, like Eleanor Williams, claim this trend is an indication that loan providers are adapting to the new financial situation. Changing their offers giving clients new deals so they can continue supporting them even in a time of crisis.
Even though the number of deals fell drastically we still have 2500 mortgages to choose from. The choices on offer are better suited for consumers with higher equity stakes in their homes or a big deposit. We are in the middle of a global health and economic crisis the banks need to ensure loans are secure. Offering mortgages with low deposits are higher risk for the banks.
If You Have A Smaller Deposit?
The situation is not as good for borrowers with smaller deposits. The number of offers have fallen drastically. In April for example, 5% deposit deals fell from 162 to 55.
Even though the number of offers have reduced this won’t last too long. We advise you to remain patient and wait for your right property and mortgage for your budget without overstretching. We will see other smaller deposit options as we the dust settles from COVID-19.
This is not what we’d predicted for 2020 but we’re seeing some positive trends. Mortgage rates are falling on every front. Though the current situation is not yet as bright as 2020 as we all had planned, there are still a lot of offers, 2500 in fact, currently available for people wanting a mortgage or a loan.
With the reduced interest rates available at the moment, if you’re financially secure it might even be the best time ever for you to source a mortgage.
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