First Time Buyers Mortgages Bouncing Back
March 22, 2018
March 22, 2018
It’s that time of year again, Spring is on its way, meaning that there is lots of noise popping up about first-time buyer mortgages. More good news again though, so we can’t complain!
According E.Surv’s January mortgage monitor, 21% of all mortgage approvals went to small deposit buyers. This figure is much higher than it has been in recent months – back in November 2017 this figure was just 17.2%. By contrast, the proportion of loans to bigger deposit borrowers declined from 35.9% to 33.5% within recent months. So there has been a huge shift in both directions, in favour of those who have lower deposits. Which is a breath of fresh air for potential first time buyers.
What is also interesting is that the North-West of the country saw a higher proportion of loans approved for small deposit buyers. 31.1% of all loans went to small deposit buyers in January 2018, which is a huge 3% increase in one month alone. So good news if you are looking for a first home in the Yorkshire area!
Richard Sexton, director at e.surv Chartered Surveyors stated ‘First-time buyers, and those with smaller deposits have experienced a strong start to the year. With a much higher proportion of loans being approved in comparison with the end of 2017.’
He continues to say that raising a deposit is one of the most difficult tasks potential home owners face. Particularly those wishing to reside in London. With the continuous uphill struggle to save up a large enough deposit to buy.
The bad news is that a rise in UK interest rates is set to hit the market in May 2018, following a recent statement from the Bank of England. Since 2017, the rate of inflation has been at 3%, but the banks have confirmed rates would need to rise to tackle high inflation costs.
Unfortunately, this will negatively impact the mortgage market, and mortgage rates are likely to increase over the next few months. So if you are looking to get on the property ladder, if you are in a position to buy a property, we would advise doing this sooner rather than later!
However, we understand that buying a property is not only a huge financial commitment, but an emotional one too. It is not something that should be rushed. Although mortgage rates will be rising, they will be implemented in small increments.