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Lockdown 2 - Working with Charles Derby Mortgage Bureau and your Advisor.

For this second lockdown period the government has decided not to shut down the housing market. You can continue to buy and sell your homes and we can arrange finance for you.

From the guidance we have received we are back to working remotely as the preferred methodology. During lockdown 1 we had changed our proposition to enable us to work entirely in this way with phone, email and conferencing links, so we were still able to offer you a good level of service. However, this time there is an exception. If you, as an advice seeking member of the public would like to, you may invite us to a face to face meeting, if that is what you would prefer. No one should be displaying any symptoms and if your adviser is happy to do so, that will be ok. Social distancing and masks should be observed where possible.

We suspect, as with Lockdown 1, there will be market impacts because of this action. The furlough scheme is extended for another month, but it is unlikely to see lending criteria easing. Lenders will be less confident of the job market, with more loss of employment as lockdown 2 takes its toll on so many sectors.

Arranging loans with less than 20% deposit may become trickier, it is hard to tell yet. Lenders have been very risk adverse since lockdown 1 and good high loan to value(LTV) mortgages were hard to find. Even where they do exist, they have been expensive. We suspect if you are looking for a 90% LTV the market will become narrower if not, disappear altogether for a while, at least with the mainstream lenders. If any lenders decide to stay in this space the rates payable will likely rise and their underwriting criteria may become more onerous. Too early to tell for sure but watch this space.

Despite all that we still have access to some great lender products where potentially through 100% shared ownership and some family linked mortgage loan support arrangements, deposit requirements on the buyer, can be brought down to zero in some situations.

The length of time taken to arrange a loan, get surveys done and legal work completed has not returned to normal following lockdown 1 at all. Lenders, conveyancer’s, and surveyors are struggling with backlogs and running on reduced headcounts due to furloughed staff. We anticipate offer to completion times will remain on average, at four months or more for quite a time to come. That said, we know the lenders whose processing times are nearer to normal which will help if time is of the essence and you are not in a long chain. Pragmatism may be the rule of the day. A bit more expensive but a lot quicker, may be worth it for a while.

We will keep you posted if there are any new developments but in the meantime, don’t hesitate to ring in for an update on what it is really like out there, we are happy to share.

Roger Lane

CEO: Charles Derby Mortgage Bureau

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