Mortgage Market Recovery

Why 2021 will be a better year for the mortgage market?

Tuesday 5 January, 2021

In this article Gulay Dugunyurdu looks forward to 2021 and reviews the positive incentives now in place that should help the mortgage market recover.

At the end of last year, I reviewed the mortgage market in 2020 – How did the mortgage market treat you in 2020? Now, we are into 2021 new hope dawns. I think I can speak for all of us when I say 2021 will hopefully be a better year, although it may not feel like it at the moment with restrictions still in place. 

Stamp duty holiday until 31/3/21

The first thing we have to look forward to is the stamp duty incentive which is still here until 31st March 2021.  We only have three months left but if you were to find a chain free property and use good solicitors then there is no reason why you can’t beat the stamp duty deadline. Also, with another lockdown introduced at the back end of 2020 and with restrictions still in place I wouldn’t be surprised if the stamp duty incentive is extended for a period of time especially for those that agreed sales/purchases before March 31st 2021.

More 10% deposit mortgages available in the mortgage market

The second piece of good news is that we are seeing more 10% deposit mortgages available in the market with more mortgage lenders now feeling comfortable to lend as mortgage payment holidays start to reduce and lenders become accustomed to working in this new environment. As a result, we have seen greater risk appetite from mortgage lenders with criteria slowly being relaxed which means mortgages should be a lot easier to come by this year than in 2021. Therefore, it is possible we could see 5% mortgage deposits being introduced sooner rather than later, especially with the government promising to help out first time buyers with their generation buy project.

Government helping mortgage prisoners

We are also seeing more lenders help out mortgage prisoners as the FCA have come in and rectified a problem that has been long standing for over a decade now. A mortgage prisoner will now have more relaxed criteria and different affordability rules when trying to switch to a new mortgage lender which should mean they are not left paying ridiculous interest rates. To find out more about what a mortgage prisoner is and if this applies to you please read – Good news for mortgage prisoners trapped in a mortgage.

New help to buy scheme

Finally, we have a new help to buy scheme which is introduced on April 1st, 2021 bringing to an end a scheme which lasted 8 years. Due to the success of the old programme the government has introduced a new scheme but this one will have slightly different restrictions. One of the key considerations is that it is only applicable to first time buyers. Again, this is all part of the government’s aim to get first time buyers onto the property ladder.

Gulay Dugunyurdu, Mortgage Broker in Enfield, Hertfordshire said:

‘Overall, 2021 looks set to be a promising year with mortgage lenders now having confidence in the mortgage market once again. Restrictions and challenges will still remain for a large part of this year but by the end of 2021 I hope we will be back to more normal conditions. The good news is we are always here to keep you up to date and provide mortgage advice during these ever-changing times, so please contact our mortgage broking team on 01707 872000 if you require mortgage advice or have queries that need answering.’

In Summary...

After a very difficult year for the mortgage market there are signs that 2021 will be a better year for anyone wanting to move home. If you are a first-time buyer, home mover, buy to let investor or looking to re-mortgage call our mortgage broking team for a free initial consultation.

Your property may be repossessed if you do not keep up repayments on your mortgage.

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