Mortgage Deals Show Signs of Life as Lender Restrictions Relax

The past month or so brought little other than doom and gloom for prospective
homebuyers across the UK. As of this week, it seems there is finally light at the
end of the tunnel for British borrowers on the lookout for a competitive home

As a knock-on effect of the coronavirus lockdown, many of the UK’s biggest
Lenders had previously scrapped many deals aimed at first-time buyers and
those with minimal equity in their current properties. Examples of which
included Nationwide, Halifax, Santander, and Virgin, who were asking for
deposits of at least 40% from all home loan applicants.

Today, Halifax announced that its maximum loan-to-value (LTV) would
once again be increased to 85%. Nationwide likewise announced a resumption.
of 85% LTV mortgages, while Virgin Money reintroduced purchase mortgages.
to its portfolio.

At Santander, fees and charges on residential mortgages have been significantly
reduced, while maximum loan sizes have been increased once again from
£300,000 to £500,000.

Experts have commented that lenders are showing signs of adapting to the current
pressures, rather than cutting themselves off from the consumer market. Work
out how much a mortgage would cost you using our Mortgage Calculator UK.

Initial restrictions were cautiously relaxed

As the UK was forced into mandatory lockdown due to the COVID-19 outbreak,
Lenders across the country were forced to make immediate adjustments to cope.
with the new restrictions. One example of this is nationwide, the biggest
building society in the UK, which immediately withdrew all mortgages with an
LTV of 75% or higher.

According to the lender, the adjustment was necessary in order to “focus on
supporting existing mortgage members while continuing to process ongoing

Lenders needed to figure out viable ways to maintain operations at a time when
Their offices and mortgage processing hubs were facing the prospect of home
working or furloughing their staff. Homework is still the norm, but lenders’
Adjustments to working practices in the meantime have enabled them to begin

Covid-19’s Impact on UK House Prices Surprisingly Minimal

If the results of a recent Rightmove study are anything to go by, UK property prices may not have been quite as catastrophically hit by the coronavirus  outbreak as expected. Comparatively, sluggish performance was never in any doubt, though an apparent 0.2% fall in average property prices for March is not nearly as dramatic as some had predicted.

A housing market in lockdown

The mandatory lockdown imposed across the UK makes it practically impossible for property transactions to take place in the normal way. As a result, the housing market in its entirety entered its own state of lockdown and almost stalled entirely.

Average UK property prices have been knocked off their all-time highs by Covid-19, though the damage done to date might not be as severe as expected. Economists and estate agents had expected dramatic (if temporary) plummets in average house prices across the country, though this apparently has not been the case.

According to the latest figures from Rightmove, the average newly advertised home put up for sale in April had a market value of £312,000. This represents a decline of just 0.2% from the month before, though importantly is still an impressive 2.1% increase on the same month last year.

This would suggest that while the coronavirus crisis may have brought about a period of sluggish performance, the housing market hasn’t come close to collapsing.

A slump in physical sales activity

UK property prices may not have been impacted severely by the Covid-19 outbreak, but lockdown has certainly taken a toll on the industry as a whole. A significant slump in activity has forced many estate agents to furlough employees, with interest among buyers and sellers having reducing.

At the height of the slump, Rightmove reported that visits to its website were down by as much as 40%, which occurred shortly after the lockdown was announced by the UK government.

In the meantime, interest and activity has apparently “started to recover” according to Rightmove. In addition, evidence suggests that the collective efforts of buyers, sellers, banks and conveyancers to keep things moving is helping the property market as a whole to retain at least some level of buoyancy.

Fewer new sellers were listing their properties for sale during March, though the vast majority of sellers who had already begun marketing their properties chose not to withdraw their homes for sale. As a result, property availability at Rightmove is down just 2.6% since the beginning of lockdown.

Coronavirus Business Interruption Loan Scheme

If you run a business in the United Kingdom that has been affected by the COVID-19 pandemic, you may be eligible for a Coronavirus Business Interruption Loan.

The scheme, introduced by the British Business Bank after the March 2020 budget announcement, has been created to help businesses facing temporary financial shortfalls as a result of the coronavirus crisis.

In this guide, we will be clarifying how the scheme works and which businesses may be eligible for support.

What is the coronavirus business interruption loan scheme?

An enforced lockdown in the United Kingdom was deemed necessary to prevent the spread of COVID-19, though this has led to significant revenue losses, disruptions, and delays for thousands of businesses.

The aim of the Coronavirus Business Interruption Loan scheme is to provide qualifying businesses affected by the pandemic with access to affordable loans of £50k to £250k, for which the government will pay all fees and interest in the first 12 months.

Approved lenders throughout the UK will be able to issue these Coronavirus Business Interruption Loans to qualifying businesses, many of which would normally fail to qualify under typical lending criteria. This relaxation of eligibility requirements and excellent repayment terms could provide thousands of UK businesses with the lifeline they need to ride the COVID-19 crisis intact.

It is, however, important to note at this stage that the terms and conditions of the scheme outlined by the government to date are considered temporary and are subject to change at any moment. Full details of the scheme can be found here at the link given.

Coronavirus business interruption loan scheme: key features

A basic summary of the key features of the Coronavirus Business Interruption Loan Scheme is as follows:

  • Fast-access loans of £50,000 to £250,000 are available for qualifying businesses, with different lenders setting different maximum loan amounts within this threshold.
  • flexible repayment terms of one year up to a maximum of five years, allowing repayments to be spread as preferred by the business.
  • There are no guarantee fees for smaller businesses to increase the affordability of business interruption loans.
  • All interest and charges are covered by the UK government for the first 12 months, eliminating upfront costs and fees from the equation.

If the loan is repaid within the first year, the borrower will be subject to no interest charges or borrowing costs whatsoever. The Coronavirus Business Interruption Loan scheme is effectively providing a free-of-charge cash advance system for qualifying businesses whose revenues and cash flow have been affected by the coronavirus outbreak.

Eligibility under the Coronavirus Business Interruption Loan Scheme

Each lender taking part in the Coronavirus Business Interruption Loan scheme will set its own limitations on how much anyone can apply for (from £50k up to a maximum of £250k).

All other criteria and eligibility requirements will remain fixed across all lenders, as follows:

  • The business must be based in the UK with a maximum £45 million annual turnover.
  • All funds issued under the scheme are to be used for business purposes only.
  • Not more than 50% of the company’s turnover must come from trading activity.
  • The loan must be used to support primarily trading in the UK.
  • All funds will be repaid as agreed within the allotted 12- to 60-month period.
  • The business must be in an otherwise strong and stable financial position.

Importantly, the business must be able to demonstrate that, under normal circumstances (if the COVID-19 crisis had not occurred), it would be in an otherwise amicable financial position. This is because the Coronavirus Business Interruption Loan scheme is exclusively aimed at those affected by the COVID-19 crisis directly, not businesses that were already struggling before the outbreak of the virus.

How UK property finance can help

As a leading independent broker, we can provide the objective support and advice you need to assess your suitability for a Coronavirus Business Interruption Loan.

Along with establishing your eligibility under the scheme, we can help you find your ideal provider from our extensive panel of specialist lenders across the UK. Even if your requirements are complex or urgent, you can count on UK Property Finance to help you find the best way forward for your business.

Call 0116 464 5544 anytime for an obligation-free consultation, or email us at [email protected].

Financial Support During the Coronavirus Covid-19 Crisis

The COVID-19 crisis is taking a toll on almost every household, business, and individual throughout the United Kingdom. Alongside the obvious health implications of the coronavirus outbreak, millions are finding themselves plunged into financial turmoil.

For some, the future of their businesses or employment status is looking increasingly bleak. For others, meeting mortgage payment obligations and keeping their accounts in the black is already proving difficult.

Irrespective of the nature and severity of the financial difficulties being faced, it is at times like these that it is important to carefully consider all available options. Particularly if there is a way of raising funds in an affordable way or switching to a deal that could save you money, it is an option worth considering.

Independent advice and support

UK Property Finance understands the concerns of businesses and households hit by the coronavirus crisis. We also appreciate how, for most people across the UK, now seems like the worst possible time to take on additional debt or consider unnecessary outgoings.

However, it is important to remember that tailored financial products and services at the right time can bring about significant and ongoing savings. Likewise, there are various short-term lending facilities available at exceptionally low rates of interest, which can prove ideal for negotiating temporary financial shortfalls.

From bridging loans to competitive remortgage deals to all types of specialist secured loans, leveraging your equity to weather the current crisis could enable you to emerge unscathed.

As an independent broker with no direct brand ties or affiliations, UK Property Finance is able to provide the honest and impartial advice you need to make an educated and informed decision. We guarantee the utmost in professionalism and objectiveness at all times, adopting a pressure-free approach to the consulting we provide.

No matter how unfortunate or urgent your financial situation may be, you can count on the committed support of UK Property Finance at this difficult time.

Planning ahead for all eventualities

As things stand right now, nobody really knows when the COVID-19 crisis will come to an end. More importantly, there are no current signs of an immediate end to the enforced lockdown and closure of businesses across the UK.

While the government may have lightened the load for many business owners with a series of relief measures, it is still important to think long-term and to plan for all eventualities.

We understand that the priorities of every business, household, and individual are unique. This is why we specialise in 100% bespoke financial solutions, tailored to meet the exact requirements of each client we work with. From raising emergency capital as quickly as possible to protecting homes and business assets long-term, we can provide the support you need to safeguard your financial future.

Call UK Property Finance at any time

Whether you are in need of immediate assistance with an urgent financial issue, want to know more about the Government CBILS (Coronavirus Business Interruption Loan Scheme), or are planning ahead for an uncertain future, we would be happy to hear from you anytime.

Contact a member of the team at UK Property Finance for an obligation-free consultation or to discuss your concerns at a time of national crisis.