A mortgage loan to value is determined by the amount you are borrowing against the value of a property. Therefore a 10% deposit is a 90% loan to value and a 40% deposit is a 60% loan to value.
The media and Lenders have been providing mixed messages about what is available and why.
Cleerly have investigated this and want to update and inform you on the impact on loans to value.
When the pandemic first struck in March of 2020 all Lenders withdrew all mortgage schemes. They needed to help their existing mortgage clients with payment holidays and moving to interest only for a period to protect them during those extreme times. Their staffing levels were severely depleted by self-isolation and not being able to attend offices.
Once this initial spike and their ability to change working practices took place, they started to release products at the low loan to values (60%) to initiate the ability to start doing new business again. This was hampered in the early days be the inability to do physical valuations as surveyors were not allowed to visit properties.
As the total lockdown eased a little and their capacity to administer new business improved, they started to release higher loan to value products until such time as they got back to 85% loan to values (15% deposits).
Around this time the Government announced the stamp duty incentive to encourage people to buy / move and keep the property wheels moving. This incentive led to another spike in activity which the Lenders still find themselves in.
As the Lenders have more than enough business currently and their service standards are starting to come under increased pressure they are yet to move effectively back into the 90% loan to value space. There are some Lenders now offering 90% loans to value but the criteria around securing these is extremely tight with many cases that would have been accepted prior to the pandemic being declined.
As the Lenders quieten down in the New Year as the ability to secure a purchase within the stamp duty incentive becomes less likely they will open up again in earnest at 90% loan to value or they will lose market share.
This leads to the timing of your proposed move or first-time purchase to be more important than ever.