Chat with us, powered by LiveChat Mortgage 2022 - London Mortgage Partners

As the dust settles on a busy start to the year, I have taken the time to reflect on my predictions on what I expect to see from the mortgage market in 2022:

1. Greater support for First Time Buyers

I, like many, consider First Time Buyers to be the foundation on which the mortgage market is built. Without new entrants the housing market cannot function effectively and the flow of funds up the chain quickly stagnates.

We find that it is often the availability of sufficient deposit funds that is the issue rather than affordability and for this reason I expect to see more lenders enter the Equity Loan market helping boost the deposits of those lacking available funds. Pioneers like Proportunity have proven that there is a demand for this product and I expect to see greater competition and innovation around this complex area.

I also expect to see more lenders launch 95% LTV products as general market sentiment increases.

2. Positive developments for the Self-Employed

The Self-Employed have been disproportionately affected by the pandemic, with many having to postpone plans to buy their first home or move due to the restrictions many lenders placed on them as potential borrowers.

I am pleased to see that most lenders have removed such restrictions and we are again starting to see some innovation in the way in which self-employed applicants are assessed from a lending perspective. I expect to see this continue as more lenders will look to take Salary and Net or indeed Gross profit for Limited Company Directors, rather than outdated Salary and Dividends. I also expect a continued softening of the criteria around Fixed Term Contractors as lenders begin to better understand the practical workings of this important element of the workforce.

3. Greater leverage equals greater liquidity for HNW ‘Private Clients’

Even when accounting for recent rises, mortgage interest rates remain historically low comparative to the returns being achieved on most ‘investments’ held by HNW individuals meaning there is an opportunity cost of liquidating investments to fund a deposit on a new property.

We have already seen lenders increase their max LTV allowances on higher value properties and I expect to see this continue with greater consideration paid to post completion liquidity and an increased use of cross-collateralisation to minimise the deposit requirements for HNW clients.

Mortgage 2022

Mortgage 2022.

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