Back in March, the Bank of England slashed interest rates to an all-time low of 0.1%, in a bid to alleviate the severe economic pressure caused by coronavirus. As the base rate cut fed through to mortgage rates and with the continuing pressure of a closed mortgage market, lenders responded by withdrawing mortgage offers, increasing rates and pulling products from the market.

Between March and May:

• 2,656 mortgage products were withdrawn, many of which were high  loan-to-value (LTV) deals (i.e. those requiring a smaller deposit).
• 396 two-year fixed and 374 five-year fixed deals at 90% and 95% LTVs were pulled from the market

2020: A steep downturn, followed by a cautious return?

As certain social distancing restrictions began to be lifted in May and the property market reopened for business, lenders began relaunching higher LTV deals and products aimed specifically at first-time buyers, such as Help to Buy loans.

With the property market still in the early stages of recovery, it’s worth being pro-active and following some of these tips to maximize your chances of mortgage approval:

• Save as much as you can – while many people are experiencing financial difficulties during the pandemic, many of us are also spending a great deal less than usual. Getting your deposit as high as possible will increase your chances of mortgage success.
• Clear your debt – when considering your application, lenders will higher the likelihood you’ll be accepted for the best mortgage deals. Understanding your credit rating and how to improve it is key to moving forward with a successful mortgage application.
• Keep excellent records of self-employed earnings – providers can be more nervous about lending to self-employed people, so having excellent records of your earnings over the past two or three years (depending on the lender) can really improve your chances.

We’re on hand to make sure you get a great deal for your circumstances, and one that gives you the highest chance of success. Whether you’re a first-time buyer or a second stepper,  we’re here to guide you through this difficult period.