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Number Of First-Time Buyer Mortgages Up By 17%

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http://www.guardian.co.uk/money/2011/jul/19/number-of-first-time-buyers-up

Article full of buts and caveats, from the sources quoted as well at the hack. There may be more products, but how many FTB's can actually get a mortgage? Even if they have a job that pays enough and they live in a place where they can afford the price of a house.

Anyway, whole article below.

Number of first-time buyer mortgages up by 17%

The number of first-time buyer mortgages has rocketed by 17% in the past month, according to research from Moneysupermarket.com.

It claims there are now 312 products available for those with a 10% deposit – the highest number since November 2008, when the credit crunch first hit.

The website said the average interest rate on a 90% loan-to-value (LTV) repayment mortgage had also begun to fall, dropping by 0.17 percentage points since last month and 0.53 percentage points during the past year to an average of 5.87%.

Although tracker mortgages at 90% LTV are now more expensive than this time last year, in the past month the average rate on them has dropped by 0.22 percentage points to 5.5%.

Clare Francis of moneysupermarket.com said: "There is a severe shortage of first-time buyers at the moment, and one of the reasons is that it's been so difficult to get a mortgage unless you've had a deposit of 25% or more.

"It is therefore encouraging to see an increase in the number of 90% and 95% mortgages available."

However, Francis said the number of mortgages for those with small deposits was still way below pre-credit crunch levels, and borrowers who took them up were still being charged a higher rate than those with more equity.

Moneyfacts said it could find 270 mortgages at 90% LTV compared to 244 in June – a rise of 11% compared to Moneysupermarket.com's 17%, but it agreed that conditions were still difficult for would-be first-time buyers.

Spokeswoman Michelle Slade said: "While there are 35 products available to borrowers with a 5% deposit, all but three require a guarantor, or for you to live within a restricted lending area. The same applies to the 100% LTV deals, where all but one are from Northern Bank, which only lend in Northern Ireland – the other is from Tipton & Coseley and requires you to commit funds as security that isn't accessible during the term of the deal."

Andrew Hagger, from Moneynet.co.uk put the figure for 90% mortgages lower still, with the number jumping from 222 to 246 since the beginning of June – up by approximately 10% – though he pointed out that Moneysupermarket.com's figures could be boosted by some exclusive products Moneynet doesn't list.

"But the number of products is fairly meaningless really," Hagger said. "If you haven't got a good enough credit history to pass the underwriting stage you are still going to get turned down even if there are 100,000 products to choose from."

He continued: "We need more innovation from lenders – a bit like the recent Saffron building society deal announced last week where they look at your record as a tenant, such as making rental payments on time."

The Saffron deal is designed to appeal to people who can afford monthly mortgage repayments, but are struggling to accumulate a 15% or 20% deposit. It comes at a price: a rate of 6.49% fixed until April 2015.

This week Kensington, which specialises in lending to "customers who are overlooked by the high street", increased its maximum loan size for first-time buyers taking out a 90% LTV product (via a broker or intermediary) to £500,000.

David Hollingworth of London & Country Mortgages agreed that the environment had become more benign for first-time buyers in recent weeks, but that would not necessarily mean borrowers would find it easier to obtain a mortgage.

He said: "There has certainly been a gradual improvement in the rates on offer and the number of deals available at higher LTV. But it isn't a straightforward market for first-time buyers and they will still often need to meet more stringent credit scoring requirements for higher LTV rates.

"The bandings have not disappeared either, and so saving for a bigger deposit will help yield a wider choice and better rates along with it."

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So its the number of morgage types, not number of actual people/couples that's up!

:blink:

Yep usual media rubbish really. Just because there are more available does not mean that there are more people to take then up. In fact Skipton withdrew there 95% LTV mortgages a few months ago due to lack of applications.

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More churnalist garbage. Bash out a press release based on a survey of dubious methodology and bam, your brand has got several hundred words of copy in a 'upmarket' rag.

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The Saffron deal is designed to appeal to people who can afford monthly mortgage repayments, but are struggling to accumulate a 15% or 20% deposit. It comes at a price: a rate of 6.49% fixed until April 2015.

Seems fair enough to me - if a BTL landlord can get a mortgage indirectly based tenants ability to pay then it seems reasonable that the tenant should be able get a mortgage themselves.

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Seems fair enough to me - if a BTL landlord can get a mortgage indirectly based tenants ability to pay then it seems reasonable that the tenant should be able get a mortgage themselves.

In fairness if the tenant does not landlord simply gets another.

It is the credit worthiness of multiple tenants not one.

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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