First-time buyers may have to wait until a huge backlog in applications clears if they want to regain their influence on the housing market, with a dearth in higher loan to value deals adding to a “perfect storm” for the mortgage industry.
That is according to Leicestershire mortgage firm Mortgage Experts Online, which said that the backlog of mortgages applications, which dates back to the lockdown earlier in the year, is making prospects harder for buyers taking their first step on the housing ladder.
New figures from Zoopla show that first-time buyers are becoming less influential in the property market because the higher loan-to-value deals that they need to make buying a home affordable are becoming less common, especially among high street lenders.
This is because the lenders have pulled them while they tackle a backlog of applications which began when valuers were unable to go out to value homes during the country-wide lockdown and has continued because so many of their staff are working from home.
Lee Griffiths, a director at Mortgage Experts Online, based in Station Road, Castle Donington, said that since the lockdown, the turnaround time for mortgage applications to high street lenders has lengthened to 19 days on average compared to the usual 48 to 72 hours.
It means that would-be buyers are having to wait longer for their deals to go through – making life more stressful for anyone involved in a housing chain – while first-time are being priced out of the market.
Lee said: “House sales are still strong, but first-time buyers, who have for so long been the most active drivers of industry, are finding it tougher because of the scarcity of high value to loan mortgages.
“We’re unlikely to see them return until the backlog has been reduced and I don’t see that happening in the short term because the industry is facing a perfect storm, with high demand but a shortfall in staff able to process applications.
“There are still a few good deals out there, but first-time buyers are being advised to approach an independent broker who has the freedom to scour the whole market because they will need to work harder to find them – and they should also be prepared to be patient.”
The Zoopla study found that current home-owners looking to move out of urban areas and into the countryside are now driving demand, thanks to the way in which the coronavirus has prompted many people to reassess their lives and where they wish to live.
Mortgage Experts Online help buyers all over the UK to find the right mortgage advice and specialises in helping self-employed people, people on reduced-hours or zero-hours contracts, or buyers with poor credit histories.
Mortgage Experts Online’s accredited brokers scour the whole market for mortgages, and also specialises in buy-to-let mortgages and commercial finance.
For more information visit www.mortgageexpertsonline.co.uk
ENDS
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