With buyers saving up to £15,000 in stamp duty on their property purchase until 31 March 2021, including those buying a second home or investment property as well as first-time buyers and home movers, in the longer term it is likely to give the whole market a significant boost.
However, while borrowing also remains cheap, lenders are wary about the end of the furlough scheme in October. More than 9.3 million workers were furloughed by the end of June, and lenders are concerned about their future income in case they are made redundant. Several lenders, including Virgin Money, will not offer mortgages to furloughed staff. HSBC will not accept furloughed workers who have no return to work date or where that return is more than three months away. TSB will only consider furloughed applicants if their employer is topping up their salary and will need to provide proof in the form of a letter from their boss that they are committed to keeping them employed.
Borrowers who have not been furloughed, have steady jobs and a decent amount of equity are most likely to be approved for a mortgage at the most competitive rates. But if you have been furloughed and need a mortgage, all is not necessarily lost. You should ask your employer for a letter stating when you are going back to work, the hours you will be doing and pay you will be earning, and whether it will pay into your pension and make national insurance contributions.
It is worth seeking independent advice from a whole-of-market broker who can advise as to the best approach for your circumstances. AWS Financial Services can assist if you have been furloughed and will know which lenders will be most sympathetic to your circumstances. Please get in touch for more information.