The issues facing first time buyers, homeowners and potential movers!

To say that the government is currently under a substantial amount of pressure is something of any understatement. Keeping political points of view or persuasion on the sidelines, the handling of the coronavirus pandemic and Brexit remain huge issues which are dominating time, resources and attention.

I fully appreciate the importance of tackling these concerns and the major toll they are having on the health – physically, mentally and financially – of the UK population. However, there are also a number of other areas which the government can ill-afford to ignore across the housing and mortgage market.

The problems facing mortgage prisoners are mounting and a recent report from the London School of Economics (LSE) has put the onus and ethical responsibility on the government to solve the mortgage prisoner crisis quickly and recommended a package of measures to do so.

Another situation which is cause for great concern revolves around cladding, and finding appropriate solutions for such deputes should also be high on the government’s agenda. Through no fault of their own, all too many people continue to find themselves in a position where it is neigh on impossible to sell certain property types or even remortgage them - which is an unacceptable outcome.

There are also question marks in the air around whether the government will extend the stamp duty deadline in light of some lending, survey and conveyancing backlogs which are having knock-on effects on a growing number on housing chains. A trend which will only intensify in the coming weeks.

These are just some of the issues facing first-time buyers, existing homeowners and potential homemovers. In the current economic climate, there are many extra layers of complexity for all those involved in the mortgage journey. And this really does outline the importance of impartial, independent financial advice when it comes to  overcoming a growing number of challenges and ensuring that people have access to the right kinds of financial options to match their current, and future requirements.

So, speak to a specialist, impartial, independent adviser about your property related needs in this increasingly uncertain marketplace.

Mortgage prisoner? There's light at the end of the tunnel...for some.

Around 140,000 people with mortgages are currently classed as ‘mortgage prisoners’.  This means that they could be with a lender who is no longer active, or a lender who has ‘bought’ a number of clients from other lenders but who does not offer additional mortgage products once the customers current incentive rate period comes to an end.   So, effectively, the client will sit with the lender on their standard variable rate, normally a lot higher than incentive rates, and because of various reasons, they may not be able to move to another lender.  This could be due to their loan to value (amount borrowed against the value of the property), or maybe that particular lender at the time had attractive, exclusive income multiple calculations, which are no longer offered or new and stricter criteria no longer enables them to change lender. 

Many of the mortgage industry have campaigned for some time to try and assist these customers.  It seems the regulator has taken note and issued a consultation paper.  I stress, this is only at consultation stage, but it shows that this is now a concern and the regulator is seeking a way forward.  One part of the consultation entails a ‘relative’ test, rather than ‘absolute’ test.  This would check to see if the new mortgage costs would be cheaper than the current costs.  As such, the client may be able to transfer to another lender with minimal checks, underwriting and fees (normally this would be classed as a product transfer if the client was staying with the same lender and changing to a better deal).  This also assumes the new lender has made a commercial decision to see if this works for them in taking on these customers.

I can only see this truly working if all lenders in the market are ‘encouraged’ by the regulator to make this work.  Not all customers will be able to be assisted but it is a step in the right direction and that can only be good news for those who are currently paying way over what they should be.

Finally, we’re looking for staff to join our fantastic team in Horsham.  Ideally, we’re looking for mortgage brokers who have been in the market for at least a year and have a proven track record in customer service and recommending mortgage and protection products.  If this is of interest, or you know someone who is looking, please get in touch.