Don’t blame banks and building societies for uncertainty in the housing market, says financial firm trade body UK Finance.
In an open letter, chief executive Stephen Jones writes that banks have not pressured the government to freeze the housing market due to the coronavirus outbreak.
But, he says, government guidance to buyers and renters that they “should, so far as possible, delay moving home while emergency measures are put in place to fight coronavirus” is having an impact.
To help, lenders are offering a three-month mortgage offer extension so movers can delay buying a new home.
“In these challenging times, the banking and finance industry is committed to doing all it can to support its customers and the wider economy as quickly and comprehensively as possible,” writes Jones.
“Colleagues across every bank and building society are working tirelessly to help and support their customers, particularly the most vulnerable.
“For personal customers that includes providing the option of a mortgage payment holiday of up to three months, agreeing a moratorium on any residential and buy-to-let repossessions.”
Mortgage lenders pull deals
Mortgage lenders are moving to cap new borrowing of more than 75% loan-to-value.
Lenders are worried about dropping property values as a result of the coronavirus crisis.
The Nationwide, Accord and Kensington are among lenders which have pulled or capped LTVs on almost 200 mortgages. Precise and OneSavings have suspended new lending, while Barclays and the TSB have withdrawn most products.
The lenders blame a huge flood of mortgage payment holiday applications for triggering the measures.
Social distancing may be working
Meanwhile, there’s a glimmer of hope that social distancing rules may be working.
Despite 180 deaths yesterday, taking the total to 1,408, Chief Scientific Officer Sir Patrick Vallance said: “We have admitted more than 8,000 people to hospital with this virus since the middle of March.”
“That’s gone up pretty much the same amount each day for the last couple of days, which may suggest that we’re already beginning to see some effects through.
“We’re not on a fast acceleration at the moment.”
But he said talk about lifting the restriction soon were ‘premature’ at best.