LENDERS SHOW CONFIDENCE

In a clear sign of confidence in the outlook for capital values, Accord (part of Yorkshire Building Society) has broken ranks, being the first to return to offering 5x income at 90% loan-to-value (LTV). Simultaneously, mainstream lenders including Barclays and Virgin have reduced their interest rates for 90% LTV loans. As well as indicating their confidence, this also puts downward pressure on rates for lower risk loans. Borrowing 90% of your purchase price is still relatively expensive. The best two year rate currently available is 3.24% – more than three times the 1.05% best rate at 60% loan-to-value. This equates to a difference of £182.50 per month, per £100,000.

Barriers For British Expats

IN EU Lenders who were keen to lend to British EU residents buying UK property, are now turning them away. We have had several instances of this from different lenders, including one case which clearly demonstrated that financial status is not the issue. It appears to be a blanket policy change, even though the same products are still available to expats outside the EU, from the same lenders. One manager said "Yes this is due to Brexit. As far as we are aware it is a permanent change in policy”. Despite this, we believe these moves reflect nervousness over new bank account and passporting arrangements which will be resolved. In the meantime, given that over a million UK citizens live in the EU, it is important to note that we do still have lenders who will look at such loans.

POST-LOCKDOWN LIVELINESS

The nature of our business means that we have been able to continue during lockdowns. Throughout, demand has been extraordinarily high and given added urgency by several government deadlines falling on 31st March. Our workload now suggests that, after that date, the overall market – including the top end – will continue to be unusually active if, hopefully, a little less fraught.

For independent advice, contact Private Finance on 0870 600 1650 or jackson-stops@privatefinance.co.uk.