Cheap Loans And Help To Buy Continue To Support First-Time Buyer Market

The government’s Help to Buy programme and low-deposit mortgages are helping to prop up the first-time buyer market. Research by Aldermore revealed nearly a third (29%) of prospective buyers believed getting onto the property ladder was difficult, while being able to access affordable housing was cited as the second largest challenge, cited by 23%. But the chances of raising a deposit was regarded as less of an obstacle than last year. Assistance through low-deposit mortgages and saving schemes such as the Help to Buy ISA had boosted first-time buyers’ prospects. Read more on the Aldermore website.

https://www.aldermore.co.uk/about-us/newsroom/2019/11/first-time-buyer-index-shows-the-home-buying-process-remains-difficult-for-new-buyers/

Era Of Cheap Mortgages Is Almost Over

Mortgage rates have hit rock bottom and can only go up, the Council of Mortgage Lenders has warned. Households are currently benefiting from the cheapest home loans on record after a fierce mortgage price war between lenders. This has caused a surge in remortgaging as families across the country rushed to snap up cheaper deals. It has also helped more first-time buyers get on the property market. These two groups have driven the housing market as a slowdown in house price rises, and falls in parts of the country, have made existing homeowners reluctant to sell. But the CML suggested the era of record low mortgages may be coming to an end. Read more on the Daily Mail website.

Building Society Launches Record Low 0.89% Mortgage Rate

Britain’s lowest-ever mortgage rate has been launched, priced at 0.89% for two years. The new move by the Yorkshire Building Society suggests that competition in the home loans market may be intensifying. The previous lowest rate was 0.98%. The Yorkshire’s claim to be offering an “all-time low” rate was verified by the financial data provider Moneyfacts, but is not fixed. It is pegged to the society’s standard variable rate (SVR), offering a discount for two years, so it is not for homebuyers looking for the certainty of fixed monthly payments. The deal is also restricted to people needing to borrow no more than 65% of the value of their property and who are happy to pay a fee of £1,495. Read more on the Daily Express website.

Could This Be The End Of Super Cheap Home Loans?

Britain’s biggest bank has signalled the death of the sub-1 per cent deal. In a symbolic move, HSBC ditched its record breaking 0.99 per cent two year fixed-rate offer as it hiked mortgage rates across the board. Over the summer, it became the first lender to drop its fixed-rate home loans below the 1 per cent threshold, launching the cheapest two year fixed-rate deal ever. But the bank has now increased the rates on dozens of fixed-rate deals by up to 0.5 percentage points – adding hundreds of pounds to the cost of repayments over a year. Campaigners warned this would come as a shock to borrowers who may not have budgeted for increases after years of falling rates. Read more on the Daily Mail website.

Help To Buy Closure Will Not Affect Those With Small Deposits

The Bank of England has told the government that its flagship scheme which has helped more than 79,000 buyers on to the housing market can be closed without any impact on the supply of home loans. Help to Buy was announced in March 2013 by the then chancellor George Osborne with the aim of encouraging lenders to provide mortgages requiring deposits worth 5% of the value of a property at a time when they were demanding bigger deposits. The scheme is scheduled to close at the end of this year, and the Bank’s governor, Mark Carney, has told Osborne’s successor, Philip Hammond, that its closure would not affect customers with small deposits. Read more on the Guardian website.