A major mortgage provider has offered reassurance that it will continue to take applications for home loans across its full range of deposit sizes.
HSBC UK has issued a note to brokers to say mortgages across its range of LTV (loan-to-value) levels will remain available.
However, some applications may need to be temporarily put on hold until a time when they can be taken forward, due to the current difficulty in making physical valuations.
Daily limits may also be placed on the amount of business the mortgage lender can take on, to ensure it remains within its operational capacity.
Our mortgage range across all LTVs is still available and open for applicationsMichelle Andrews, HSBC UK
Michelle Andrews, HSBC UK’s head of buying a home, said: “Our mortgage range across all LTVs is still available and open for applications, and we aren’t seeing upward pressure on pricing.
“We will look to make the most of technology and utilise desktop and automated property valuations where we can, and, where this is not possible due to limitations on physical valuations, such as lending above 90% LTV and new-build properties, these applications will be put on hold until we can take them forward.
“In order to ensure that we stay within our operational capacity, we may need to limit the amount of business we can take each day, which means that, once certain daily limits are reached, we may need to limit our range for the rest of that day.
“By doing this, we can continue to support our broker partners, their customers and the housing market.
“We will, of course, continue to review the situation regularly and hope it isn’t too long before the market returns closer to normal.”
HSBC UK is also taking part in a recently-announced industry scheme to provide customers with a three-month extension on their mortgage offer, enabling people to move at a later date where customers have already exchanged contracts.
Some major lenders have restricted the products they are offering, as the coronavirus pandemic puts the brakes on the housing market.
Last month, Nationwide Building Society announced that it was temporarily pulling its mortgage offering for low-deposit borrowers, helping it to focus on existing customers and applications.
Nationwide’s fixed-rate and tracker mortgages above 75% loan-to-value were withdrawn from sale.
Barclays also said in March that it had withdrawn some products, although it said a number of lower deposit deals remained available.
Borrowers with smaller deposits, many of them first-time buyers, are generally seen as more risky for lenders, because, when house prices fall, some may end up in negative equity – meaning the size of their loan is bigger than the value of their property.
However, market experts have said that, while sales are expected to plummet over the next few months, prices should hold up.
Record low interest rates keeping borrowing costs relatively low and forbearance from lenders should limit the number of “forced” sales – where people desperate to sell may be tempted to slash their asking price.