Nothing could have prepared us for what 2020 would bring so, when looking forward to 2021, it’s with a healthy dose of realism and the truth that many of the events which might affect us the most could be totally out of our control. However, what we do know is this:
- Demand in the property market far outstripped all expectations in 2020 and we saw levels of activity none of us would have contemplated in the face of a global pandemic and economic uncertainty.
- As a result, the mortgage market was flooded with applications and lead times increased – in most cases – by several weeks.
- The Stamp Duty holiday, although designed to help those buying up to the £500,000 mark, had a positive effect across the housing market and we saw a huge spike in transactions over £1m[1].
- Understandably, lenders became more cautious, lowering LTVs, restricting some products from the market, or pulling them entirely for a period.
Where do we go from here?
We certainly don’t have a crystal ball, but here’s the advice we can offer with a good degree of certainty:
- If you’re looking to take advantage of the Stamp Duty holiday, you need to act now. Even if we can secure a mortgage offer in time, solicitors and surveyors are heavily oversubscribed and both are vital to the buying and selling process. Don’t delay.
- When it comes to lead times for mortgage applications, the private bank market does not seem to have been as severely affected as the High Street. Therefore, this is a potential avenue for clients with the right profile. Our team of specialists works with all of the major private banks, meaning we can direct your application to the right organisation and speak to the decision makers to present your case.
- Getting your application right the first time is more important now than ever. According to research, it’s taking on average around 16 weeks for lenders to complete on mortgages[2], and some lenders report a 20-day period before even considering applications. Therefore, when your application is looked at, it needs to contain every single piece of required information to avoid further delays. This area is a huge part of our work, as we can spot the potential weaknesses or concerns that a lender may have and suggest ways to provide supporting information, meaning applications are more likely to be approved the first time.
- Underwriters are classing more cases as ‘specialist’ and therefore working with a specialist mortgage adviser could bring significant benefits. We are increasingly seeing mortgage products being manually underwritten and each case having to prove itself on its own merits, especially for certain sectors such as self-employed clients. Our team has decades of experience in working this way. We work on individual, complicated cases rather than high volumes of straightforward applications, so we understand the manual process and how to help guide our clients through the stages required.
Despite the challenges of 2020, our team were busier than ever. However, we are looking forward to 2021 being a healthier year for all and returning to a semblance of normality. Our homes have never been more important, and we want to help ensure the process of securing them – and keeping them that way – is as smooth as it can possibly be.
If you think you may need our help, please don’t hesitate to get in touch.
[2] https://moneyfacts.co.uk/news/mortgages/the-best-residential-mortgage-rates-131120/
