First-Time Buyer Mortgage Applications Reduce In Lockdown
The mortgage slowdown during lockdown seems to have impacted prospective buyers more than homeowners.
Those looking to purchase a property for the first time seem to have delayed their home move during lockdown or were forced to reconsider homeownership because of their changing circumstance.
Applications made by first-time buyers reduced by 35 per cent in April when compared with the same month in 2019 with submissions falling by 53 per cent according to research completed by Trussle.
Meanwhile, remortgages during this time flourished with applications rising by 110 per cent in April when compared with a year earlier.
Miles Robinson, head of mortgages at online mortgage broker Trussle, said:
“As the coronavirus crisis continues to impact people’s livelihoods, those who have been furloughed are naturally likely to be concerned about their mortgage applications.
“During these difficult times, many lenders will only consider 80% of a furloughed customer’s income in affordability calculations, provided that the applicant has confirmation that they’ll be going back to work.
“As there’s a monthly cap of 80% of salary paid up to £2,500 for furloughed workers, people earning more than this will be impacted more significantly. Many lenders are also hesitant to consider overtime and bonuses at this point in time as it is certainly not guaranteed income.
“While other lenders won’t accept furloughed customers at all, we’ve seen flexibility from those who are accepting customers on furlough and we’ve helped a number of customers in this position to secure mortgages.”