First time buyers could enjoy lower deposits this summer
It has been suggested that first time buyers could finally see some light at the end of the tunnel this summer, as there may be mortgages available that do not demand impossibly high deposits from borrowers.
For the past decade first time buyers have been priced out of the market due to the high value of homes, and many were delighted when house prices started coming down over the past couple of years.
However, whilst house prices are considerably lower now than they were during their peak in 2007, and the base interest rate has come down to its lowest level in the three hundred and fifteen year history of the Bank of England, at 0.5 percent, many first time buyers have still found that homeownership is out of their reach due to more stringent regulations from lenders as a result of the global credit crunch.
Many lenders have been demanding crippling deposit levels for their more affordable mortgages, which most first time buyers cannot afford as they have no previous property from which to take equity.
Moreover, mortgages that were once popular amongst first time buyers have all but disappeared, including 100 percent and even 95 percent mortgages. Many lenders have been demanding deposits of at least 15 or 20 percent of the property value.
However, the good news is that some industry officials have predicted that first time buyers could enjoy access to mortgages that require a deposit of only 10 percent of the property value this summer, as lenders try and ease up on lending a little more.
It is claimed that over twenty lenders are now prepared to consider borrowers with a lower deposit of 10 percent, which is an improvement on the past year or so although it is much lower than the figure before the credit crunch hit.
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