With today’s announcement from Nationwide that they will now be extending the expiration dates of all mortgage offers, there are signs that the property market could soon return to some normality.
Nationwide have announced that almost all mortgage offers will be applicable to apply for a 90-day extension. Should your mortgage offer be due to expire in less than 30-days you can now apply to have the expiration date extended online. The extension can be applied for by either the customer or their mortgage advisor. At the end of the 90-day extension, customers will also have a further 15-day grace period within which to complete their purchase.
The extension offered by Nationwide far exceeds the provisions put forward by UK Finance, which restricted the mortgage offer extensions to only those who had exchanged contracts on their purchase.
This news will no doubt come as a relief to many property purchasers, who are experiencing delays due to the current government restrictions; in particular, for those buying new build homes, where almost all construction has ceased. Hopefully, other lenders soon follow Nationwide’s lead.
The stance taken by Nationwide would suggest that they retain confidence in the property market, as they are clearly keen for their current mortgage offers to proceed to completion. The extensions offered by Nationwide may also indicate that they do not believe that property valuations have been significantly affected by COVID 19, as the extensions are being offered without any requirement for a re-evaluation. Were Nationwide concerned by the impact on property valuations, they would no doubt not be offering any extensions without updated property valuations.
There are also early indications that confidence in the property market is returning to other banks. Many high street lenders have started to increase the number of mortgage products offered, after recently restricting their products to only those with a large deposit.
You will have read reports that some banks, including Barclays and Halifax, had restricted lending to only those who have deposits of 40% or more. However, both banks have now eased these restrictions and are offering mortgages to those with a 20% deposit. Other banks, such as Lloyds and TSB, are also now offering mortgages with a loan to value of 75%.
Should this trend continue, there will soon be mortgage products on offer for those with deposits of 10% or 5%.edit