The mortgage lending market in 2021 will dramatically increase with the bank of Mum and Dad (or Gran and Grandad) now needed more than ever as a lending source.
How we see each different type of market
Purchase’s – It would be madness for a lender to go above 90% LTV this year and we suspect they already know this. Throw in some adverse credit and a mortgage payment holiday and while you might have the deposit available to purchase it is irrelevant if the lender thinks your income is not enough.
Product transfers – A lot of clients will want to ride out the market and opt for security. Many will put off a future move for at least 12 months and until such time they get visibility on their own job security. This will be the only growth aspect of the mortgage for the rest of the year and lenders will also use the opportunity to go direct to consumer at every possible opportunity and brokers need to remain vigilant to that threat and ensure clients sense check everything they are doing.
Like for like remortgages – Expect these to be few and far between. Unless there is a significant difference in monthly payments between the PT and mortgages we believe clients will go down the path of least resistance.
Shared ownership/HTB – Unless you are a super-prime client with a large deposit these products will stall well into next year
New builds – This is interesting a lot of people will have exchanged so expect to see a spike in completions In June, but with lenders not offering high LTV, there needs to be some serious thought surrounding new build incentives in order for the deals to go through. Builders may mothball developments and ride out the storm into next year.
Later life lending – The market will dramatically increase with the bank of Mum and Dad (or Gran and Grandad) now needed more than ever as a lending source. We expect to see many future inheritances requested early by the family.
Tim K. Dean, Credi Founder | Commentator & Expert on Family Lending, Bank of Mum & Dad and Neo-Credit Scores is available for media interviews and appearances. More…
Tim K. DeanCredi Founder Commentator & Expert Family Lending | Bank of Mum & Dad | Neo-Credit Scores Tim K. Dean is a leading expert and commentator in the field of friends & family lending, the Bank of Mum and Dad and neo-credit scores.
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