The last few days have brought some excellent news for homebuyers looking for an affordable way to purchase a home in England and Scotland, with two major announcements about the Help to Buy scheme. Since its launch in England in April, the scheme has kick-started a surge in demand for new homes across the country.
Over recent years, the number of low-deposit mortgages has fallen significantly. Lenders have been reluctant to offer high loan-to-value (LTV) loans, especially to first-time buyers, preferring to concentrate their efforts on so-called ‘safer' customers.
So, getting a high LTV mortgage has been tough. Now, though, a specialist lender has launched an equity loan scheme which aims to help buyers with a small deposit. And, you don't pay any interest on this borrowing. We look at whether an ‘equity loan' could be the answer if you're looking to buy with a 10% deposit.
By Marc Da Silva
Chancellor George Osborne today announced new measures to boost mortgage lending in a bid to help more people to buy their own homes.
Over the last five years, parents have provided in excess of 228,000 first time buyers with more than £1.3bn, according to new research from The Equity Release Council.
The future of low-cost home loans has been thrown further into doubt after two of the UK's largest lenders closed their doors to interest-only deals. In a move The Independent described as a ‘watershed moment for the product', Royal Bank of Scotland and NatWest will no longer accept mortgage applications on an interest-only basis.
There was good news for first time buyers this week with the announcement that a sixth lender is to join the government’s NewBuy property scheme. Aldermore is the first non-High Street lender to join the scheme which aims to help first time buyers to get onto the property ladder with just a five per cent deposit. With more choice of NewBuy schemes now available, the government hopes that more people will sign up to the scheme.
The Cambridge building Society has just reduced interest rates on its buy-to-let mortgage products, despite an increase in applications for these fixed- and discounted-rate loans. Available direct from the Society or via mortgage brokers, the reduction of up to 0.25% is set to further increase interest from property investors.
There has been a significant increase in the demand for large family homes, but a lack of mortgage lending is restricting many more people from buying property, according to Knight Frank's 2012 Housebuilding Report, released today.
According to the research, some 87% of the industry reports a current ‘moderate or high demand' in the sales market for four- and five-bedroom houses, up from 77% in 2011.
A recent Mortgage blog on WhatHouse.co.uk, which looked at ‘how to use equity to expand your property portfolio', pointed out that buy-to-let remortgages are currently at their highest level so far in 2012, reflecting the fact that more investors are taking advantage of favourable market conditions and adding to their buy-to-let portfolios.