Are banks triggering a mortgage credit crunch?

This is Money Podcast

This is Money

Business News, Business, Investing, News

4.1 • 650 Ratings

🗓️ 19 June 2020

⏱️ 47 minutes

🔗️ Recording | iTunes | RSS

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Summary

Banks and building societies have been slashing their mortgage ranges for those with smaller deposits.

The number of mortgages available for those with a 10 per cent deposit has plummeted by 90 per cent compared since the start of March.

This week, Nationwide announced it won’t lend on deposits smaller than 15 per cent, while TSB says even that’s not quite enough.

What’s going on and is this triggering a mortgage credit crunch?

On this week’s podcast we look at how the mortgage squeeze compares to what happened after the financial crisis, how this will affect those who want to buy and those who need to remortgage.

Will the crunch last and send house prices down? Or has Britain’s property market got the kind of Terminator characteristics that will see it claw its way back up from coronavirus?

Also, this week, as inflation nosedives we look at how savers can now beat the cost of living – are they really better off?

And finally, while the nation is supposedly feeling the punch from the economic effects of coronavirus, there are some strange spending patterns going on...

...This is Money has uncovered a hot tub sales boom in lockdown, but why?

Transcript

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0:00.0	Welcome to This Is Money. I'm Georgie Frost and alongside editor Simon Lambert. Me today is Assistant Editor Lee Boyce.
0:06.6	And coming up, are banks triggering a mortgage credit crunch by pulling loans to those with the smallest deposits?
0:13.2	First-time buyers will be the hardest hit, but there is hope. With all this going on, the reopened property market is seemingly in rather rude health.
0:21.9	Why is this? A property that didn't sell before coronavirus going back on the market at a higher price
0:26.2	because sellers expect to be asked for a discount. We have some better news in theory, as even
0:31.3	rubbish savings accounts are beating the price of inflation. Plus, as Britons get used to the
0:36.1	idea of holidaying at home, we're splashing
0:38.7	our cash on hot tubs. But be warned of scams. Don't be getting this update with all this.
0:45.0	And the latest breaking money news, just go to this ismoney.com.uk or download the app.
0:50.3	But first, first time buyers have been hit by a mortgage crunch as banks and building
0:54.9	societies pull small deposit loans. The latest blow came as Britain's biggest building
0:59.7	society nationwide, confirmed yesterday that it would not be offering mortgages to those
1:04.3	without at least a 15% deposit for the time being, unless they were already customers.
1:11.0	TSP, they also say no.
1:14.1	But they could still benefit first-line buyers from little-known deals linking to a family
1:19.5	member's home or savings.
1:21.5	So very warm, welcome, lads.
1:23.2	First of all, Lee, what's going on with nationwide and TSP?
1:25.9	Well, Georgie, we are seeing the vast removal of low deposit mortgages.
1:32.1	So what that means is first time buyers typically have a 10% deposit to put down on a home.
1:38.0	So let's say a house for 250 grand, that would be a 25,000 pound deposit.
1:42.4	What's happening is a lot of these sort of 90% and 85%
	...

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