After a drop in cases, the UK is coming out of its COVID-19 lockdown. The government is removing social distancing rules – its aim being to get things back to normal by the end of 2020. As a result, people are slowly returning to the office.
The property market is a top priority for the government. It wants to release pent-up demand for property by encouraging buyers to return to the market. To achieve this, it introduced a Stamp Duty holiday on the 7th of July.
So far, this holiday has been well-received.
Rightmove has recorded a surge in inquiries. The average price of a UK property coming on to the market is £320,265. This is the highest figure recorded by the property website since 2001.
While this is positive news for buyers and sellers, the challenge is ensuring buyers have access to the necessary loans.
Will mortgage providers be able to meet demand for property finance? And if not, where can buyers turn?
Limited mortgage options
When lockdown measures were first introduced, mortgage providers retreated from the market. The number of products on offer dropped and this put transactions at risk of collapsing.
Mortgage providers are now slowly returning to the market. Their risk-averse approach means applications will take longer to process. The Stamp Duty holiday will result in an increase of enquiries, though it is questionable whether such demand can be met.
At the moment, 90% LTV mortgage options are limited. 95% LTV mortgages are not likely to make a return until the end of the year. That’s why demand for specialist finance will increase.
Using bridging loans
Bespoke bridging finance is ideal for homebuyers. They can be deployed quickly and tailored to the needs of the borrower.
During the lockdown, fast bridging loans have grown in popularity. MFS has deployed over £27 million worth of loans in this period. Access to in-house credit means we can meet all future demand for bridging loans.
The UK’s move out of lockdown will increase buyer demand for finance. This will be encouraged further by the Stamp Duty holiday. Buyers should therefore look beyond the high street and consider bridging finance.
Get in touch with a member of the MFS bridging team for information on our bridging loans, or visit what is a bridging loan to find out more about them. Email firstname.lastname@example.org to receive our latest product guide.