UK Mortgage Lenders Take a Leap Forward
The state of the property market was hot news a year ago but with the general election and World Cup fever, some of the recent developments seem to have been missed by the national press. This absence is quite surprising as there has been a boost of optimism and the buy to let market has undergone a significant change led by one of the largest lenders; The Mortgage Works (TMW).
For the first time in 18 months, a mortgage lender has announced that it will be increasing the ceiling on the maximum loan to value (LTV) for its buy to let range.
Property management data and research has established that, previously, applicants wishing to borrow from the TMW had to provide a 25 per cent deposit and now that their protocol has changed they only have to provide a 20 per cent. 
They are the first mortgage company to break away from the 25 per cent terms and offer this rate in the UK for buy to let deals. Therefore they pave the way for other lenders to follow suit. It is a competitive market and one in which the big lenders are always under pressure to offer the best deals to attract new investors and purchasers.
Another piece of welcome news for borrowers is the latest report from the Bank of England. If we look at it on a bigger scale it does suggest that the pace of economic recovery is uncertain and the risks of economic growth have increased, which will have an impact on quarterly inflation. So, although the risk of economic instability may have increased, (which is usually the case after a new government is elected) it also means that the interest rates will remain low, a truism that also applies to London properties. It also indicated that the rates may stay low for longer than the market expects.
With regards to rates, Nationwide has cut theirs by 0.6 per cent on some of its fixed and tracker mortgage deals. They also raised the ceiling by adjusting their maximum loan to value on some of their remortgage tracker deals by up to 85 per cent. Woolwich has also cut rates up to 0.5% on its fixed rate range. The simple fact that two of the largest lenders in the UK have now cut their rates suggests a new optimism within the market place.
This is echoed by the recent survey from the Royal Institution of Chartered Surveyors (RICS). It clearly illustrates that more surveyors are seeing a rise in house prices and expecting this to continue as the new coalition government gather momentum. Overall, if one takes all the above factors into consideration; anticipated low interest rates, the higher ceiling for LTV in both the buy to let and remortgage sector and the slashing of rates by Nationwide and Woolwich – it certainly suggests that the mortgage market has had a spoonful of optimism which is a welcome boost to home and international buyers alike.
Photo by Mike_fleming
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