What a year! Where do we even begin? The year where “the new normal” became normal! This year has hopefully been a one off and fingers crossed can get back to the old normal next year.
Im going to do The good, the bad and the ugly in reverse order so we can end on a good note.
The ugly
I wont dwell on this part too much, I dont think there has been too much to put in this section. We did see a couple of lenders close the doors at the first sign of trouble and that is fine, but the frustrating part was the fact they also cancelled fully submitted applications. That is something quite hard to forgive and forget especially as this virus carries on and shows no sign of going completely any time soon, there is the fear that if it flares back up again, will these lenders pull down the shutters again? We are baring that in mind when making recommendations and currently looking to avoid those lenders where possible.
From the customers perspective, they had found a new home, passed the initial credit checks and were well under way and to then take that away from them is heart breaking and very frustrating.
From our perspective, at the point of an application going in, about 75% of our work is done, so from a selfish perspective we did a lot of work and were never going to get paid for it. I do not mind this so much, our priority is always getting the mortgage everything else tends to sort itself out but it is still frustrating and I think some lenders have a lot to do to make up for that.
The Bad
This is a section I think I could write a lot about.
First Time Buyers
You guys have probably been hardest hit. A lack of products above 85% LTV is really hitting those buyers more than most. It must be so frustrating to know you have got there with your 5-10% deposit only to have the goalposts change. I think the key message is to carry on, you might be able to get to 15% or even if not, you will at least have your deposit when the market returns at the higher LTVs and will hopefully be eligible for better products.
Self employed
Self Employed applicants were also hit hard this year. There were and still are a lot of additional checks in place to ensure your business is back to normal. I do wonder how Self employed applicants will be hit next year as it is probably inevitable most will have taken a hit on their income if nothing more than due to the lock down(s). Time will tell on this front, hopefully lenders will find ways to relax the rules a little.
Higher LTV
Mortgage products in the higher LTVs (typically 85% and over) became harder to get and either started to come with additional criteria such as only being available for first time buyers or being more expensive. Not only were the rates higher than they were in the early part of the year, they also typically came with a 5 year tie in period, that means you were paying a higher rate and were tied in for a longer period.
I think those are the key bad points from the year, I will try not to dwell but the vast majority of the market will fall into one of the above 3 categories. For those who do not however…
The Good
I think we need to really milk this because despite all the negatives points this year, there have been some good points.
The housing market was/is quite buoyant and I think everyone thought it would be the complete opposite in March time, so it is good to see that some normality resumed as soon as the lock down was lifted and infact there was an upturn which took us through until at least October, I know many of my Mortgage Broker friends were very very busy for months after the lock down was lifted.
Rates on products up to 80% LTV have been quite competitive hovering around the 1.5% to 2% mark which despite everything that is a positive. I suppose the key thing to take from that is if you are on the property ladder already with a decent amount of equity or you are a first time buyer with a sizeable deposit, it is possible to get a good deal on your mortgage still.
Our Year
We had a good year, our best in fact. We managed to write more business this year than we have in any other year. I think that bodes well as there is an expectation things will slow down next year.
Despite any future slow downs, one thing we can guarantee is that we will be around next year and are in a position to survive over the coming years no matter how slow things get. The good news there is that you can be sure we will be around next year and the following year to support you and ensure we are around through to completion and beyond should you need us. We prepared for a quiet 2020/2021 with Brexit in mind so unlike some brokers who may go under if there is a downturn, we will still be on hand that has only been helped by how busy this year has been.
Thank you for your support as always, and we look forward to helping you in 2021.