2020 was certainly a year to forget – with mortgage deals disappearing and millions of us having to take out payment holidays in the wake of the COVID-19 outbreak, not to mention the vast numbers of homeowners who suddenly found themselves on furlough.

The outlook for 2021 will largely depend on what happens with the pandemic, Brexit and the economy as a whole, but there are a few promising signs in the mortgage market for those of a more optimistic persuasion.

That said, 2021 is still going to be a difficult year. With uncertainty over COVID-19 and Brexit set to continue, it would be a surprise if banks relaunched their 95% mortgages in the first half of 2021.

The Bank of England is conducting a review of its mortgage rules, which cap the number of mortgages offered at four-and-a-half times the applicant’s annual income or higher. A relaxation of these restrictions might boost the borrowing power of first-time buyers.

The furlough scheme is set to run until the end of April 2021, and what happens once it closes will have a significant effect on people looking to remortgage.Millions of homeowners saw their mortgage options limited in 2020, with banks reluctant to lend to people who’d been furloughed by their employer. This meant that for many, the only option was to switch to another deal with their current lender – potentially missing out on better rates elsewhere.

If the economy continues to struggle and unemployment rises, millions of homeowners could again see their options limited in 2021.

Original and full article at which.co.uk