Compared to last year’s summer low, mortgage products for homeowners with a deposit of 10% of their property’s value have risen. The increase, based on figures from financial information service Moneyfacts, could offer some relief to first-time buyers.
But the cost of mortgages still remains an issue for many hopeful homeowners.
Low deposit mortgage packages are a huge help to first-time buyers
In early September last year, there were only 44 mortgage products available for those able to offer a 10% deposit. According to money facts, the choice has now expanded to 197 products.
Mortgage products for those able to offer a 15% deposit has also risen sharply.
“First-time buyers who may have been concerned that with record low savings rates and increasing house prices, their homeownership dreams may have had to be shelved, may have been pleased to note that we are now seeing some providers return products for those with 10% deposits,” said Eleanor Williams, from Moneyfacts.
Aaron Strutt, from mortgage broker Trinity Financial, said lenders were now working more efficiently despite staff still being at home.
Lenders are concerned about the ability of younger first-time buyers to make their mortgage payments
Lenders have been accepting the practical effects of the coronavirus pandemic on their business.
There are concerns among lenders that despite strong activity in the housing market, younger—first-time buyers could find it difficult to make mortgage repayments during an economic slowdown caused by the pandemic.
Many of the existing mortgage-holders who struggled to make their repayments during the pandemic had chosen to defer their payments.
While some new businesses targeted first-time buyers on social media, many traditional lenders withdrew their products from the market.
The latest figures from UK Finance, which represents lenders, show that 130,000 mortgage payment holidays were in place at the end of December 2020, down from a peak of 1.8 million in June last year.