A third of all mortgage contracts are concluded within three weeks because the corona virus is gripping the market
Banks and construction associations are pulling a THIRD of all mortgage contracts in just three weeks, as concerns about the corona virus are gripping the market
- 30 percent fewer mortgages were offered than three weeks ago
- Nationwide, Halifax and Barclays have all closed higher loan-to-value deals
- Experts fear that a lack of competition could cause mortgage rates to rise soon
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Almost a third of all mortgage contracts have been taken off the market in just three weeks as the housing market comes to a halt amid the coronavirus outbreak.
This morning, according to financial experts Moneyfacts, there were a total of 3,654 mortgage offers offered by UK banks and construction associations.
This is about 1,585 fewer than the 5,239 deals available on March 11 – a drop of 30 percent.
This is because lenders get higher loans with better value, while buyers and sellers postpone their moves in the wake of the corona virus.
About 1,585 fewer mortgages were offered than three weeks ago
The housing market has been in chaos in recent weeks when the government urged buyers and sellers not to move home as the pandemic continues to spread.
This, in addition to recent reductions in the Bank of England base rates, has resulted in mortgage lenders offering products in a Action not seen since the credit crunch.
And it’s not just the smaller lenders who are closing deals – Nationwide said it will happen temporarily stop offering all deals above 75 percent loan-to-value.
This means that a borrower must have a 25 percent down payment on the property to qualify for a mortgage.
The intermediate brands of Barclays and Halifax have stopped selling mortgages above 60% loan-to-value, while other lenders have stopped lending for deals that directly follow the base rate.
It is not clear to what extent banks have made the decision due to staffing problems, the land lock and a wave of customers requesting mortgage vacations, or a concern that house prices could drop.
Banks and building associations will also act careful while they cannot send someone to physically appreciate a home.
While it is too early to say, experts have warned that a decline in competition between lenders pulling deals off the market could lead to a price hike in the future.
Eleanor Williams, a financial expert at Moneyfacts, said, “It is likely that the competition between mortgage lenders for new mortgage business will decline in the foreseeable future, which we would generally expect to have a negative impact on mortgage interest rates.
However, these are uncertain times and it is also likely that mortgage lenders will have to protect their existing mortgage book, are seen as the effects of low bank interest rates, and give their existing borrowers enough options to try this storm continue. ‘
Call your lender before canceling your mortgage payments – otherwise you may have trouble paying back your mortgage
Homeowners unknowingly put themselves in arrears by canceling their mortgage payments without talking to lenders first.
Chancellor Rishi Sunak announced that anyone suffering from coronavirus is eligible for a three-month mortgage payment
Chancellor Rishi Sunak announced this month that homeowners in financial distress as a result of the coronavirus pandemic will be offered a three-month mortgage or “payment vacation.”
But lenders have warned that some borrowers cancel their direct debits without first talking to their bank or the construction company.
Doing so will negatively impact their credit score, experts say, making it impossible to mortgage again in the future.
Anyone who has already canceled a mortgage write-off without first talking to the lender is advised to call them as soon as possible to let them know.
>> Do you have to postpone your mortgage for three months?