While the stamp duty holiday has encouraged many people to consider their options in the housing market, by itself, the holiday will not help all buyers step on the property ladder.
There is a feeling that the stamp duty holiday isn’t aimed at first-time buyers. There is a range of measures in place to assist first-time buyers, and the stamp duty holiday isn’t one of them. It should be seen as a way for people buying more expensive property, perhaps in areas where the cost of property is higher, to make the buying process more affordable.
Mortgage lenders have been under pressure of late
It should also be noted the range of mortgage options available to people of late hasn’t been that expansive. There are many reasons for this. The pressure on lenders to provide mortgage holidays limited what lenders could actually do. Also, the mortgage sector, like many industries, has faced restrictions and challenges with respect to their workforce.
Therefore, low deposit options were reduced, and this has hampered many buyers. However, in recent weeks, this has changed, and buyers who can afford a 10% deposit now have a greater range of mortgage options to consider.
The companies who have provided options for people looking to borrow up to 90% of the property value are:
- Metro Bank
First-time buyers need more help when looking for a mortgage
During the lockdown period, a lot of mortgage lenders removed the mortgage options for people with 5% or 10% deposits. This size of deposit is commonly associated with first-time buyers.
According to Defaqto, there was a total of 28 products available for customers looking for a higher LTV mortgage. Katie Brain is the Banking Expert at Defaqto, and she said; “It can be really hard to save for a deposit for a home and high LTV mortgages are often the only way a first-time buyer can get on the ladder. The Stamp Duty Holiday may help first-time buyers but without the finance, home-ownership will be out of reach for most. It is encouraging to see lenders returning to the market and new products coming out for those with small deposits. We are seeing many come onto the market for only a few days and so borrowers will need to act quickly to secure these deals.”
While it is positive to see more mortgage options being made available on the marketplace, there is a need for buyers to be cautious. The mortgage sector, much like the economy in general, is a fluid place, and changes are occurring on a regular basis. In recent months, there have been examples of a mortgage product being available for a short period, and then being removed from the market.
Katie Brain also said; “Buying a home is a huge investment and not without risk, anyone who is looking to take out a mortgage should speak to a professional adviser before committing.” Calling on the services of a trusted professional can minimise many of the problems associated with quickly-changing markets.”
Anyone looking to arrange informed and up to date guidance regarding a mortgage should speak with an experienced professional.