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Nathan Cole

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  • Website URL
    www.privatefinance.co.uk
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    nathan.cole@privatefinance.co.uk

Profile Information

  • Location
    West Midlands & London
  • Areas I invest in
    London, West Midlands, Cheshire, Yorkshire
  • About me
    Mortgage Adviser for Private Finance, working in complex/specialist finance.
  • Property investment interests
    Complex Property and Finance
  • My skills
    Development, Bridging, HMO’s, Limited Companies, Portfolio Landlords
  • My goals
    Helping people achieve their property goals
  • Interests outside property
    Mountain Biking, Family and Travelling

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  1. In this week’s mortgage memo, we are discussing the slowdown in the purchase market, lenders hit by a Covid outbreak and a new player in the professional mortgages market.

    Purchase market slowing down… 

    We have seen a significant decline in purchase enquiries in the last couple of weeks. We believe this is due to the end of the SDLT holiday approaching and buyers holding off to see what happens and whether it is extended or not. There are calls from across the industry for an extension as there are fears the end of the holiday could see a cliff edge fall in transactions. However, with prices having risen so significantly and eroded any savings it may not be worth buyers worrying too much about the deadline… 

    • There are other factors at play, including a lack of supply, with the new stock of homes down 12% in the first 2 weeks of 2021 according to Zoopla which will keep prices high for the foreseeable, until people are comfortable with having potential buyers in their homes. 
    • The timescales to beat the SDLT deadline, unless extended, are now too short for most purchasers even with lenders returning to normal processing times… If the holiday is extended, we can expect an increase in purchase enquiries almost immediately.  
    • We believe that the next couple of months will be slow until lockdown eases and people become more comfortable with both putting their houses on the market and in viewing property and with the optimism generated by the vaccine, we expect we will see a boom in purchases in the summer months, very similar to 2020 in terms of a tumultuous year of peaks and troughs in demand. 

    Lender hit by Covid outbreak amongst underwriting staff

    A lender we work closely with has recently suffered from a Covid outbreak within its underwriting team and thus had had to withdraw all sub 80% products on account of reduced capacity. This highlights just how difficult the situation is facing lenders at present as they try to manage an enormous workload with staff safety and is indicative of why we have seen longer processing times in recent months.  

    • We wish everyone involved a speedy recovery. 
    • It remains important that buyers understand that this situation remains fluid and to maintain expectations for increased processing times when making a purchase. 

    Professional mortgages seeing new player with increased loan-to-income ratios 

    Platform, the Co-op’s intermediary lending channel has recently announced increased loan-to-income multiples for newly qualified professionals, i.e., those with professional qualifications such as accountants and the like, to 5.5x income.  

    • Other lenders like Clydesdale and some specialist building societies already do the same, however it is good to have another lender to join them. 
    • This highlights the way in which lenders are competing for the lowest risk propositions available and are rewarding these types of borrowers accordingly. Ultimately, in this post-pandemic lending landscape with employment under greater scrutiny, those who can easily show that their employment is secure in the long term are in a better position.  
    • We believe with rates already low and not much margin to decline further, we will see criteria and product innovation becoming more prevalent in 2021 as lender ease restrictions tightened at the beginning of the pandemic and look for niche areas to operate within and make a good margin.  

    Best mortgage buys for the week  

    Another significant fall this week in the best 2-year discounted variable rate mortgage available, down 0.2% to 1.29%, making it highly competitive with the standard 2-year tracker and 2-year fixed. Some smaller decreases in the 3 and 5-year fixed both down 0.01% to 1.21% and 1.26% respectively. Again, as only a few percentage points more than the 2-year fixed we may see more borrowers opt for these medium-term mortgage types in the coming weeks and months. All other rates and the lenders offering them remain the same.  

    As it stands it is important to remember that these rates are only available at low-LTVs and on remortgages for the most partand significantly higher rates if a purchase. For instance, the difference between the best 2-year tracker for remortgage and home mover is 0.3%... 

    It is important to note that lenders across the board have changed their lending criteria, so to get an accurate picture of what is possible in your specific circumstances, please contact us and one of our expert consultants will be more than happy to assist you. 

     

    Mortgage Memo - 3rd February.png

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