If reports over the weekend are accurate, it seems, the government is set to give the housing market a further boost when the budget is announced this Wednesday.
During the pandemic low deposit mortgage products have disappeared among nervousness from banks. This apprehension comes from increasing job market insecurity and the threat of falling house prices. Small deposits mean less home equity which potentially exposes banks to negative changes in property prices. In order to alleviate this uncertainty the government are proposing incentives for banks who offer low deposit mortgage products by guaranteeing against loss.
This is great news for banks, but what does it mean for you – the buyer? According to the *Office of National Statistics the average price of a property in England is £252,000. If we take this price as an example, the current lowest entry point to buy a property is 10% deposit, meaning, you will have to find £25,200. If, as we suspect, the proposals are announced it means a buyer will only have to find £12,600 which is a marked difference.
The proposed mortgage scheme is open to all buyers and not restricted to new build properties. This is significant because you may already own a small house or flat but need help to buy a bigger property, owing to the fact, you work more frequently from home and need more space.
The unfortunate reality of the pandemic means many have lost their jobs and businesses. However, in contrast, there are also professionals who have remained employed working from home and have made huge savings from money that would have otherwise been spent on commuting, meals and socialising.
We have already had enquiries from people in this position. With interest rates low, money in the bank and government proposals set to help, this is an encouraging time if you are thinking about buying a property if your employment status has been unaffected by the pandemic.
If you are thinking about buying a property and need help with your mortgage feel free to click here to contact us where we would be happy to spend 10-minutes to explain what is possible.
We offer free advice and do your mortgage application for you online if you have a good credit rating.
References:
*Office of National Statistics – UK House Price Index: December 2020
Please Note: The Mortgage Xchange is a partner of Scott & Goose LLP who are directly authorised by the Financial Conduct Authority under reference 661183. Your home may be repossessed if you do not keep up repayments on your mortgage.