The number of property transactions has decreased over the last few months, after the triple hit of the Brexit referendum, regulatory change in mortgage underwriting and, most recently, Theresa May’s snap election.
Despite the fact the votes have already been counted, the hung parliament result means that there is still some time for the dust to fully settle. The post-election negotiations are still underway, but there is a lot of uncertainty for borrowers and lenders in the market, much of which has been caused by May’s snap election.
How the election is affecting the housing market
The Conservative housing minister is going to be replaced after losing his seat in the election; the position is about to see its fourth minister in 5 years. It’s fair to say that the UK housing market is in desperate need of some stability.
Despite all the recent uncertainty, there has been some cross-party agreement on certain aspects of the housing policy. Easing the difficulties faced by first time buyers, for example, through increased house building seems to be universally agreed upon. This gives us some reason for positivity around the future of the government’s policy when it comes to the UK housing market.
Previously, there has been speculation that these events may play a part in triggering a fall in house prices, but these fears have been somewhat reduced. The tightening of mortgage affordability testing, and the high-income multiples required to take out a mortgage, have helped to mitigate the chance of a fall in house prices.
The strict affordability test for borrowers
The stricter affordability testing has made it more of a challenge for borrowers to meet the tougher affordability criteria when taking out a mortgage or remortgage. For those who are cash rich or earn higher incomes, however, this impact has been less pronounced.
Rates at a historical low
Although borrowers have been cautious as a result of recent events, there is still some good news. Rates are still at an historical low for some borrowers, especially on mortgages above a million. In addition, some lenders are still competing fiercely for mortgage business by broadening their lending criteria and terms.
We can help you with purchasing or remortgaging property
We have unlimited access to the market, and strong relationships with a range of private banks and niche lenders. This means that we may be able to arrange a mortgage for you where others may be unable to help.
If you are looking to purchase or remortgage a property, one of our highly experienced Mortgage Managers would be happy to talk through your options with you. Call us on 020 7519 4985 or send us an email to find out how we may be able to help you.