Tag Archives: real-estate
Number of mortgages for UK first time buyers doubles in three years
The number of mortgage products available to first time buyers in the UK has doubled in the last three years, while rates have dropped by 1%, new research shows. Since 2012 the number of 95% mortgages available has increased by 448%, according to a study from online comparison site MoneySuperMarket. But the firm says that first time buyers should always be mindful of the whole cost of a mortgage and not be lured by a headline rate. The number of overall mortgage products available to first time buyers is currently 2,776 and this is partly due to the Government’s Help to Buy scheme. In addition, the average rate on first time buyer mortgages has dropped by 1% in the last three years to 3.26%. With the average loan to value (LTV) required for first time buyers remaining flat over the last three years at 79% compared to 78% in April 2012, those looking to get their first foot on the ladder would need to find a deposit of £31,500 on a £150,000 property. However, under the scheme a 5% deposit on the same property would cost £7,500. The research says there are 170 mortgage deals currently on the market available to those with just a 5% deposit, an increase of 448% since 2012 when only 31 products available. In addition, average rates have decreased by 1.04% to 4.72% on average. ‘The increase in the number of first time buyer mortgages, and the corresponding fall in interest rates, can only mean good news for those looking to get a foot on the ladder. Even better, borrowers who can scrape together a 10 or even 15% deposit will find they are able to get their hands on more competitive deals,’ said Kevin Mountford, head of banking at MoneySuperMarket. ‘The introduction of the Government’s Help to Buy ISA which will see the Government provide up to £3,000 towards a first time buyer’s deposit, could also help prospective home owners get themselves into a new LTV bracket, thus helping them secure a more competitive deal,’ he added. But he pointed out that for anyone looking to buy their first home, it’s important not to be led by interest rates alone when comparing mortgages. ‘Expensive fees can wipe out the potential benefit of a lower rate so it’s worth doing the sums first to ensure you really are getting a great deal,’ he said. ‘Whilst mortgage approvals were up 7% overall on March, this doesn’t mean that lenders’ criteria is becoming more relaxed. After the introduction of the Mortgage Market Review, borrowers not only need to have a strong credit score, they also need to prove that they can afford the mortgage they’re applying for, not only at its current rate but, if rates should rise in the future,’ he explained. ‘Finally, also think about whether you want a fixed or variable rate deal. Fixed provides security that your rate won’t change during the term of the deal. Whilst… Continue reading
UK housing market confidence falls slightly
Confidence in the UK housing market has fallen slightly despite the fact that interest rates were held again and average house prices continued to increase. According to the latest monthly Halifax Housing Market Confidence Tracker the headline House Price Outlook balance, that is the difference between the proportion of people across Britain that expect the average property price to rise less the proportion who think it will fall, slipped to +58 compared with +64 in March 2015. At the same time the net proportion of consumers who now believe the next 12 months will be a good time to buy has increased from +21 in March to +26 in April. Conversely, the net proportion who think that the next year will be a good time to sell has fallen from +33 to +30. The research found that 63% expected the average property price to be higher in one year’s time which is significantly lower than the 67% who said this in March and this is despite a number of positive short term factors. These include the emergence of record low mortgage rates, falling swap rates, GDP growth falling to its slowest pace in three years and Office of National Statistics figures showing negative inflation of 0.1% in April. MPC minutes also showed a unanimous vote to keep rates on hold at 0.5% in the latest meeting. These, along with other factors, such as rising employment levels, should start to see the consumer housing outlook improve over the next few months, according to Craig McKinlay, Halifax mortgages director. ‘With inflation now at its lowest level since records began, unemployment falling, and the economy still growing, the fundamentals for the housing market remain positive. Going forward the key factor in how consumers adjust to any changes in rates will be the way in which they manage their disposable income,’ he said. Continue reading
