The astonishing recovery of the housing market in the wake of Covid has taken many observers by surprise. Far from the devastating slump that many experts were predicting, the housing market has not only regained all the momentum lost in the months of the first shutdown, but it has also gone on to produce the highest home prices ever.
There are several reasons for this. The record low Bank of England base rate has contributed to some exceptionally good mortgage deals, putting property in reach of many more people. There may have been demand built up from people ready to move during the months of lockdown.
But the most important factor of all must be the Chancellors stamp duty holiday, which has cut the cost of moving to a new home – and prompted many people to make a move before it ends at the end of next March.
But there could be a problem for those eager to move before the March deadline.
The great mortgage slowdown
Those applying for a mortgage are facing delays.
- First, the lockdown created a backlog that flooded the market as it reopened, with people desperate to proceed with purchases they had agreed months previously.
- Secondly, lenders were unprepared for the demand. Many had sent staff home, the resulting lack of skilled people coinciding with the avalanche of applications. Many had to divert resources to manage requests from existing customers for mortgage payment holidays. Making underwriting decisions on the kitchen table is hardly calculated to drive efficiency.
- Thirdly, the economic effects of the pandemic also meant that many applications became increasingly complex. The widespread loss of job security and concerns about recession and economic stability have spurred lenders to be increasingly cautious, asking more questions than previously.
The waiting time between making the application and receiving a mortgage offer has more than doubled, Before the pandemic, a first review of an application typically took three working days; now it takes 10. It took an average of two weeks to get a mortgage offer. Now we have found that it can take six weeks or even longer.
This is frustrating if you have found the home you want, and are desperate to move in. But it could mean more than simply wasted time.
What can you do?
The delays are encountered throughout the mortgage lending market, but by going to one of our expert Mortgage Advisers, rather than direct to a lender, it may be possible to speed the process up – as well as get a better deal.
When you come to Continuum for advice about your mortgage, we have a duty of care to you. We will identify and recommend the most suitable mortgage.
At Continuum, our mortgage experts work with virtually every lender on the market. It means that we can help you find the deal that is right for you – and the lenders who may be able to move faster to deliver it.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable Mortgage products or investment strategy, you should seek independent financial advice before embarking on any course of action.
Your home may be repossessed if you do not keep up repayments on your mortgage