Due to the pandemic and the inability to conduct valuations, Virgin Money announced in April that they were suspending any new mortgage applications and capping any buy-to-let remortgages at a 55% LTV.
However, the lender has relaunched by not only removing their temporary limits, but also returning with standard buy-to-let deals at up to 80% LTV and 75% LTV for portfolio landlords.
This follows other lenders who have removed limits following the government allowing the restart of physical evaluations.
Last week saw lenders such as Accord restart lending with LTV rates of up to 90% on residential and remortgage applications. The lender also introduced new Help to Buy products with incentives such as cashback and free valuations.
These relaunches and new products across the sector may help first time buyers step onto the property ladder if they still have certainty of employment. If they have been lucky enough to maintain a role that meets the strict criteria lenders require, they may still have been unable to raise the deposits required. With these new increased LTV rates, first time buyers may jump at the opportunity. In 2019, there were over 350,000 first time buyers, making up over half of the properties purchased with a home loan, so by allowing more first time buyers the opportunity to buy a property previously out of reach will no doubt help the housing market .
All this can certainly be taken as a positive sign in the current market that the lender has confidence in the market coming back. The increased LTV on buy-to-lets may help with the drop in mortgage searches, as found in a recent survey by Twenty7Tec:
“Buy To Let has dropped to 17.99% of mortgage searches versus 65.94% for standard residential searches. This is down significantly on recent highs of 24% of all mortgage searches.”.
There has also been an increase in buyer demand shown on property portals such as Zoopla, where there has been an 88% increase since the easing of lockdowns on the property market on the 13 May, but experts have warned that this should be treated as caution, with property sale still sluggish and potential purchasers having to re-evaluate their economic position.
Are you seeing an increase in enquiries for conveyancing? Should this be taken as a positive move forward for the housing market, or just people dreaming of a change after being confined for over two months?
