Some lenders capping maximum property values although larger mortgage loans still available
Some banks and building societies are capping the value of properties they can offer mortgages on while surveyors cannot visit properties because of the lockdown.
Mortgage lenders can only carry out basic online assessments of properties at the moment leading to some of them temporarily imposing price limits.
NatWest for Intermediaries and Metro Bank have some of the more generous property price ceilings of £3 million when compared to the other lenders.
Virgin Money and Clydesdale Bank have a property price ceiling of £500,000 while Precise Mortgages and Kent Reliance will not lend on homes costing more than £600,000. Aldermore’s limit is £750,000 outside the M25 motorway and up to £1 million within it.
Some of the price limits are stricter than others even though many of the lenders have eased their acceptance criteria over the last few weeks. They have worked out how to reply on their IT systems to produce larger mortgage loans for property purchases and remortgages.
Aaron Strutt, product director at Trinity Financial, told The Sunday Times: “If you are lending millions of pounds to someone in this economic situation, using an automated valuation with a computer program and a bit of Google Street View is considered too legally risky for the more expensive properties.”
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According to a report in The Sunday Times, sources at lenders suggest that professional indemnity insurance, which protects surveyors against being sued over valuations, does not cover big loans for expensive homes they have not been to in person.
If you are applying for a mortgage and the property is selected or an online valuation there is a good chance the offer will be produced if you meet the other credit and affordability calculations.
When applications are not selected for an automated desktop valuation they are likely to be put in a queue for a physical valuation. This means a valuer will need to inspect the property once the UK's lockdown is lifted.
Some of the private banks have temporarily stopped completing new mortgages because they do not want to provide larger mortgages without their valuers inspecting the security for the debt.
Not all of the private banks have stopped providing mortgages, they are underwriting mortgages and getting the application ready to complete, subject to a physical property valuation being completed after the lockdown rules are lifted.
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