Is the UK mortgage market still open for business?

You may be wondering what the current situation is with the mortgage market. Are all new mortgage deals off? Have providers stopped lending altogether?

At the start of the Covid-19 lockdown, numerous mortgage lenders scrapped deals or only offered loans to those with large deposits. Santander, Nationwide and Skipton Building Society announced that they’d only offer loans to borrowers with a 75% loan-to-value (LTV) ratio.

Other high street lenders, including Virgin Money, Halifax and Barclays, went even further, reducing the LTV ratio to 60%, while the Coventry Building Society reduced theirs to 65%.

But last week Santander, Virgin Money, Halifax and Nationwide all made it easier for people to qualify for a loan.

Santander increased its maximum loan size – from £300,000 to £500,000 – and reduced fees on its residential mortgages, as Virgin Money started offering purchase mortgages again. Meanwhile, Halifax and Nationwide resumed loans at 85% LTV.

Support for existing customers

Nationwide has stressed changes in policy won’t affect deals in progress. In fact, they say the steps have been taken so that they can focus on helping existing members to process ongoing applications. They will still be offering mortgage deals of up to 95% LTV to existing customers.

It’s hoped the changes will be temporary but they were taken to limit new applications so that lenders could concentrate on their existing customers. Many are dealing with thousands of calls from worried borrowers requesting mortgage payment holidays while at the same time coping with staff shortages due to the virus. In addition, as valuers can’t get out to see properties under the current restrictions, it’s not possible for the more complex property purchases to go ahead anyway.

What’s still possible?

Despite the difficulties, however, industry experts stress that the mortgage market is very much open for business. Lenders are still working with existing borrowers, advisers are still contacting existing clients to offer support and conveyancers are still communicating with people over whether their housing transaction will complete. Mortgage products are still available, albeit with lower LTVs, and online or automated valuations are still possible for some cases.

So no one should feel that the mortgage industry is in lockdown. Providers are urging anyone who is concerned to talk to them, whether it’s about taking a mortgage holiday, reducing a payment, remortgaging, doing a product transfer or even starting a mortgage journey. There are many options available, even in the current circumstances.

If you’re adversely affected by coronavirus, the Government has confirmed that you may look to take a mortgage payment holiday on your residential or buy-to-let mortgage for up to three months to help your financial situation. If you’re interested you can read my article on coronavirus mortgage payment holidays by clicking here.

If you require any further information, then please do not hesitate to contact us on 01789 263888 or email