A more accurate term for the “new normal” would be “not normal” as nothing during the past year or so has gone according to plan. Millions have been furloughed, governments have printed money at a furious pace to cover the cost of lockdowns and the housing market, which should be mired in a deep recession, is showing no such signs of rust. Which raises the question “Can I get a mortgage during the coronavirus?”
THE SURPRISING SELLERS MARKET
In order to prevent a lockdown-driven collapse of the economy, the government instituted a number of aggressive programs, including the mortgage holiday through July 2021 and a dramatic reduction in the Stamp Duty. The mortgage holiday put a lot of money in the pockets of homeowners who had not lost their jobs, and the Stamp Duty reduction had them and others thinking now was a great time to buy.
At the same time, many people who might have otherwise considered selling became reluctant to move during these uncertain times. That had the effect of shrinking the number of available homes and increasing competition for homes that did hit the market. Hence, housing prices in many places have actually increased during lockdown.
CAN YOU GET A MORTGAGE?
Yes, but again, we are not talking business as usual and that is why it is important to align yourself with an experienced mortgage broker.
WHY HAVE LENDERS BECOME SO RELUCTANT?
For several reasons. First, because the government keeps moving the finish line when it comes to the current situation so someone who has kept their job to this point may yet wind up losing it. Second, some lenders are not able to conduct physical valuations of properties due to various lockdown and social distancing rules. And third, banks hate uncertainty. So while many ordinary citizens may be gung-ho about the current state of the housing market, banks still see uncertainty and are playing their cards close to the vest.
To find out if you are eligible for a mortgage during these strange and uncertain terms, contact the team at Mortigo on 0808 164 1616 or get started with our Self Service – it does not take long!