Navigating the mortgage market during times of uncertainty

The government yesterday urged prospective home movers to delay doing so where possible while emergency measures are in place to fight the pandemic.

Resources among the lenders have become stretched after two Bank of England emergency rate cuts, as borrowers sought clarity over their finances, mortgage payment holidays and moves to tracker mortgages.

Banks are now focussing on existing customers in an attempt to reduce pressure on call centres that are low on staff, according to yesterday's FT report.

For many people, recent global events have brought with them a new imperative to obtain a cut in their outgoings. As banks alter the way they operate to adjust to the evolving situation, these are the three most important themes existing homeowners should be aware of before seeking to remortgage:

- The banks are limiting funding available for the best products

During the recession that followed the Global Financial Crisis more than a decade ago, if you wanted a mortgage you picked up the phone to book funds at a certain interest rate. The bank might have made £100 million available to lend for one product. A borrower would call, book £1 million, then the bank would have £99 million left to lend on that product. Once it was gone, the product was gone.

Amid the current uncertainty we’re seeing the biggest lenders return to this model, in a defensive move that follows almost a decade of lending without patrolling which customers were taking which products.

If you’d like to cut your outgoings, there have been few times in recent memory when it has been more important to keep an eye on what your mortgage is doing against the market, as deals on offer are changing quickly.

- Valuations are now hard to come by

Restrictions on movement mean most surveying firms will not be doing in-person valuations for the next six to eight weeks, and possibly longer. This will significantly weigh on the lenders’ ability to do business.

Certain lenders will do automatic, or desktop valuations, that do not require a valuer to have access to the property. Others will only do so under certain conditions, for example where the loan-to-value ratio doesn’t exceed a certain level. If you do need an internal inspection, we can secure the offer, but you won’t be able to complete until the surveyors have gone back to work.

Following extensive research we can give you a comprehensive overview, whatever your situation.

- To avoid a delay, you need to submit your mortgage application now

The inevitable result of a temporary hiatus in valuations will be a backlog of mortgage applications. When the dust settles and your surveyor returns to work, it’s unlikely they’ll be coming to visit the property the following day. To avoid any delays, it’s wise to get your mortgage application in as soon as possible.