Q&A: Answering some of your most common questions

Cammy Amaira

May 15, 2020

Cammy Amaira is sales and marketing director at the Tipton and Coseley Building Society

There are a lot of questions about what will happen in the future. Here are some that we have been asked and our answers so far.

Why have many lenders withdrawn from lending up to 90/95% for first-time buyers since the lockdown began?

This will vary from lender to lender but is probably be down to a variety of reasons.

Some lenders may no longer have the capacity to deal with the same volume of business due to staff being allocated to another area e.g. dealing with requests for payment holidays.

Some lenders may also have capacity issues due to many staff no longer working in the office due to having to socially distance. Furthermore, staff may not initially be in a position to work effectively from home.

Some other lenders may have withdrawn as they want to reduce their exposure in this market, while others may have reached the limit they can lend in the high LTV market.

If the lockdown continues what impact will this have on the first time buyer market?

It is hard to say as it depends on how long the lockdown continues. However the longer it remains the fewer options the FTB’s will have, as has been evidenced by the reduction in the number of 90/95% products now available.

According to Moneyfacts.co.uk the number of products available for first-time buyers with a 5% deposit had dropped to 37 as at 4 May 2020.

The number of products requiring a 5% deposit in February 2020 was 405.

The number of products that require a 10% deposit had fallen by 776 to 99 over the same period.

Some lenders have also withdrawn from the HTB scheme which reduces the availability of products for FTB’s 3. How is the Tipton helping first-time buyers?

We are still offering our 100% Family Assist product & also have a product available at 90%LTV.

What is the outlook for the first time market for the remainder of the year?

Oh for a crystal ball to be able to answer this question. The answer really depends on how soon we can get the housing market back on track.

After a very buoyant start to the year, the impact of COVID-19 has clearly had a negative effect on the whole of the purchase market, with FTB’s also suffering as a result of this.

I believe that it will be a gradual process to get the overall market back up and running and this will apply to the first-time buyer as well.

However there are some green shoots out there with the recent announcement that physical valuations can now be considered, Also estate agents can now re-open, albeit they need to follow the government guidelines.

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