A personal approach can open condominiums to more borrowers
“it is important for brokers to keep in mind that lenders will approach condominium cases in radically different ways”
In cash terms, this represents an increase of £24,000 to a new record high of £278,000. Given the challenges of the past two years – and indeed the testing times to come – it’s no wonder that buying a first home is such a challenge.
Fortunately, there are programs designed to help future owners, such as the condominium program. And the latest data suggests it should play a bigger role in the UK property market.
Deliver more houses
Government figures show that there has been a marked increase in the delivery of condominium properties in recent years. In 2015/16, just over 4,000 condominium properties were completed, but this figure peaked at around 18,220 in 2019/20. Although this has fallen slightly during the pandemic, the drop has been relatively small at 17,100 in 2020/21.
This growth in supply is really positive for the sector, and for the housing market as a whole. The more condominiums we have available, the more options there are for potential first and second home buyers.
As we all know, the supply of all kinds of properties is currently at an all-time high, with demand continuing to increase from potential buyers across the market. There are undoubtedly many buyers who would be delighted to buy a condominium; the challenge is to ensure that there are enough properties to meet this demand.
Offer more mortgage options
It is not only the number of potential condominiums that has increased. Recent years have also seen a steady improvement in the number of active lenders in this space.
There was a time when condominiums were almost the preserve of building societies, and while mutuals retain a strong presence in the market, it is also true that other lenders have spotted the demand for these forms of mortgage and launched their own offers.
This has been a tremendous development for brokers and their clients. The increased level of competition has forced lenders to be more considered in their product design, to find ways to make their condominium products stand out from the crowd.
Obviously, the price plays a big role here, but the criteria are just as important. The influx of new lenders has pushed us all to be more innovative in the way we operate.
Process the details
However, it is important for brokers to keep in mind that lenders will approach joint ownership cases in radically different ways.
We know from our conversations with intermediaries in the past that there will be times when lenders take a strict, almost checkbox-like attitude towards condo applicants. In these cases, if there is the slightest hint of some sort of complexity – for example if the borrower is still on probation at work or has an incomplete credit history – that will be enough for them to reject the application main .
Our perspective at the Mansfield Building Society is rather different. We believe in a more personal approach; each case is underwritten manually by our team of experienced and knowledgeable underwriters. This means they are able to get a much fuller understanding of the claimant and the case, by becoming familiar with the individual circumstances.
After all, brokers know that every case is different – it’s important that lenders recognize this in the way they approach applications, rather than making rash judgments.
This personal approach means that we are in a much better and more informed position to make a decision, and therefore to approve cases that other lenders might avoid.
This is especially important when it comes to shared ownership, given the possible challenges and complexities around the types of borrowers who tend to turn to this system. Working with lenders who handle the details will help brokers help more clients get on the housing ladder with a condo mortgage.