2020 was a difficult year on many fronts, but how will 2021 shape up? With hundreds of thousands receiving their vaccinations daily and the property market continuing to boom, there is hope for a brighter future.
The number of products available on the mortgage market shot up by 42% between October 2020 and February 2021 to 3,2151. This constitutes the highest mortgage availability since March last year, and the highest four-monthly increase in 13 years.
Buyers with smaller deposits were hit hardest by mortgage availability issues during the pandemic, with higher LTV mortgages all but vanishing from the market. However, recent months have seen positive growth in 90% LTV mortgage products (for buyers with a 10% deposit). Rising from 160 in January, there were 248 90% LTV products on the market in February – a 386% growth in availability since October 2020.
Although the Bank of England held the UK base interest rate at its record low of 0.1% in February, banks have been told to prepare themselves for the possibility of negative interest rates within six months. While it’s unlikely that negative rates, if they did happen, will be passed on to borrowers, it does mean that the mortgage market is likely to remain highly competitive for homebuyers and remortgagers this year – some more positive news.
The pandemic has seen borrowers’ priorities shift significantly both in terms of their choice of mortgage provider and the type of property they want to live in2. According to 79% of brokers, customers are increasingly prioritising flexible lending criteria, most likely due to the negative financial impact of the pandemic. Bigger houses are also higher up homebuyers’ priority lists in order to make room for home offices, according to over half of brokers, while a third say that homebuyers are fleeing cities in favour of the countryside.
Spring is here, making it the ideal time to review your mortgage. Please get in touch with us so we can help you assess all the available options, including your life cover needs.
2Masthaven Bank, 2021
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.