We all know 2020 has been a challenging year, and many people’s hopes of entering the housing market have been hampered. However, this isn’t the case for every prospective buyer.
There is good news for some first-time buyers with news that the Nationwide aims to make it easier for these buyers to arrange a mortgage. The building society is keen to offer 10% deposits, and they are on record as hoping to help these buyers “safely go further” with a suitable loan.
The building society isn’t going to lend to customers who are looking for a mortgage term in excess of 25 years. They have also stated they will reject applications for customers who are keen to purchase a newbuild property or flat.
Buyers need to save the deposit themselves
Another element buyers must be aware of is they need to save some of the deposit money themselves. If a buyer receives the full amount from family members, the application will not be processed by Nationwide.
The lender is also looking for ways to alter criteria to help more younger buyers step on the property ladder.
At a time when the housing market is extremely busy, many buyers feel as though they are excluded from the marketplace. There is a need for all buyers to receive support. The stamp duty holiday is effective for many buyers, but not all, and there is a thought that first-time buyers haven’t received sufficient support.
There is a need to deliver confidence in the marketplace
Therefore, anything which helps these buyers to feel more confident about the process has to be seen as a positive thing for the market in general.
Nationwide Chief executive Joe Garner said; “Hopefully we are leading by example, and we constantly challenge ourselves to ask how we can safely go further.”
Garner added: “I think it makes good business sense to be supporting this segment of the market and we will continue to do so. I don’t think any lender would sail through a pandemic without reviewing their lending policy. We are constantly looking at our lending criteria and we’ve made multiple changes and adaptations as we go along.”
This news, allied to many industry experts tipping house prices to fall in 2021 could assist people step onto the property ladder.
Rob Houghton, CEO of reallymoving, said: “The New Year looks set to herald a change in fortunes for the housing market following an exceptional summer and early autumn which has pushed prices to record highs. But it was never sustainable. House prices cannot continue to defy macroeconomic influences such as rising unemployment, shrinking economic growth and the prospect of a No Deal Brexit at the end of the year. While we will continue to see positive growth through to Christmas based on deals already agreed, momentum is now slowing and we expect to see a reversal in the recent spike in house price growth over the first quarter of 2021.”
Anyone looking to arrange informed and up to date guidance regarding a mortgage should speak with an experienced professional.