Mortgage enquiries plummet in lockdown – Trussle

Trussle has announced it saw mortgage enquiries plummet by 37% from March to April, just as the UK’s lockdown measures came into full effect.

The online broker suggested the coronavirus pandemic also seemed to be “disproportionately affecting” first-time buyers, with mortgage applications down by 35% year-on-year during April, and a 53% decrease in submissions between March and April.

Trussle highlighted that lockdown had resulted in an end to physical valuations, and as a consequence, borrowers were being turned away as many lenders could no longer accept applications with a higher LTV. The broker also suggested this began to affect workers who have been furloughed, or taken a cut to their income.

Since the Government imposed the UK lockdown, 7.5 million workers have been furloughed and Trussle indicated it has seen applications by furloughed workers being handled by lenders on a case by case basis.

Lenders are willing to accept furloughed incomes, providing applicants have confirmation from their employers that they will be going back to work, however, Trussle suggested that most lenders will only consider furloughed workers’ reduced salaries, and that being on furlough may affect how much you can borrow.

Furthermore, for those in the bracket of high-earning home buyers, the furlough scheme’s cap of £2,500 per month has meant some of their salary is instantly discounted by lenders, and that more expensive homes might be off limits until they are able to return to work.

Trussle head of mortgages, Miles Robinson, commented: “As the coronavirus crisis continues to impact people’s livelihoods, those who have been furloughed are naturally likely to be concerned about their mortgage applications.

“During these difficult times, many lenders will only consider 80% of a furloughed customer’s income in affordability calculations, provided that the applicant has confirmation that they’ll be going back to work.

“As there’s a monthly cap of 80% of salary paid up to £2,500 for furloughed workers, people earning more than this will be impacted more significantly. Many lenders are also hesitant to consider overtime and bonuses at this point in time as it is certainly not guaranteed income.

“While other lenders won’t accept furloughed customers at all, we’ve seen flexibility from those who are accepting customers on furlough and we’ve helped a number of customers in this position to secure mortgages. The criteria has been changing frequently during these times, so anyone who has been furloughed should seek professional mortgage advice.”

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