The mortgage industry remains optimistic in the face of a third national lockdown in England, as some lenders say their appetite to lend remains unchanged.
Matthew Corker, lender relationship manager at Knowledge Bank, said after two national lockdowns, lenders appeared to be confident the market would “weather any potential storms”.
Mr Corker said: “The day after the lockdown was announced we saw lenders increasing LTV to 90 per cent in the residential market and it appears that no one is panicking.”
The March lockdown saw many lenders retreat from high value lending while others came in and out of the market at short notice causing chaos for advisers. Haphazard changing of lending criteria also added to brokers' woes.
But Eve Morgan, owner and consultant at Morgan Harrison Mortgage Solutions, felt that lenders were prepared this time around.
She said: “I think lenders have had time at this point to make provision and understand the risk posed by lockdowns and so it won’t automatically result in any changes to criteria.”
Corey Whelan, director at Cambridgeshire Money, also did not anticipate criteria to be tightened much more going forward, but said he could imagine underwriters examining cases to confirm affordability.
Mr Whelan commented: “We are near on a year in this pandemic now and that could seriously impact the self-employed, so I will be interested in how lenders are going to approach that.
“But we can still see 90 per cent LTV products and lenders in the marketplace, and not the evacuation we saw last year.
“So to me it seems that lenders are prepared and used to working in a marketplace like this now, and that’s great to see.”
However, Knowledge Bank’s Mr Corker said he expected restrictions to continue for self-employed applicants.
Indeed, Santander has temporarily limited all new residential applications to 60 per cent LTV where any applicant is self-employed.
The lender said the restriction was to help manage its current pipeline cases after the latest government lockdown announcement and school closures.
Mark Harris, chief executive of SPF Private Clients, described service levels as the “only negative”, with some lenders unable to operate as efficiently as normal while working from home.
Appetite to lend remains
The first lockdown in March saw lenders reduce their maximum LTV amid restrictions on physical valuations. Some lenders even halted mortgage lending as they looked to support existing customers and protect their businesses.
But Knowledge Bank’s Mr Corker said that overall, lenders appeared “well set up” to manage the latest lockdown.
Simon Furnell, chief operating officer at Masthaven, said the lender's appetite to lend was unaffected.
He said: “We’ve experienced two lockdowns now and have set up our processes appropriately, meaning our appetite to lend is unaffected – we will continue lending as usual.
“Although another lockdown is a daunting prospect for many, we can take some solace in the fact we’ve been here before and have learned how to adapt our services, so that we can continue to operate effectively.
“We’re in a stronger position than we were in spring 2020 since this lockdown doesn’t involve as many restrictions on the property market and we’ve had almost a full year to adjust and refine our processes.”
Paul Brett, managing director for intermediaries at buy-to-let lender Landbay, agreed the market would be much less affected by the latest national lockdown compared to the first, with surveyors still able to value properties and the housing market remaining open.
Mr Brett added that with the incentive of the stamp duty holiday, the lender had already experienced an “incredibly busy” start to the year, as demand from landlords and property investors remained high.
He continued: “At Landbay therefore, it is business as usual and this latest lockdown is not having any effect on our lending.
“The LTVs on our buy-to-let range remain at 80 per cent and our rates are the same. If anything we are looking at ways to loosen criteria rather than tightening it.”
Likewise Reece Beddall, head of sales and marketing at Bluestone Mortgages, said despite the third lockdown, its appetite to lend and approach to lending had not changed.
Mr Beddall also said that Bluestone was not planning any changes to its product offering or lending criteria as a result of the new lockdown.
Calls for stamp duty holiday extension
While government guidance states the public can still move home and attend property viewings during the current lockdown in England, the Intermediary Mortgage Lenders Association (IMLA) warned it would “undoubtedly” cause disruption for some buyers.
Calls for the stamp duty holiday to be extended beyond March followed the announcement of the lockdown, which is expected to last until mid-February.
George Franks, co-founder of estate agents Radstock Property, said: “In theory, it’s business as usual for the property market but in practice that’s simply not the case.
“Transactions are already under a lot of time pressure and the new lockdown will compound the issue, as people work from home or fall ill with the new strain.”
According to Mr Franks, extending the deadline by at least another month to reflect the new national lockdown seemed like the “right thing to do” in the current circumstances.
chloe.cheung@ft.com
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