One issue that many vendors don’t spend a lot of time thinking about is how buyers in the market are affected or supported. It is natural that vendors focus on themselves and leave the buyers to care for themselves but the more buyers there are in the market, the better it will be for vendors.
Therefore, news that the leading lender in the country is now offering a 100% mortgage for first-time buyers isn’t just positive for buyers, it should have an impact on vendors too. There are conditions with this style of a mortgage, as you would expect, but it may make life easier for some people looking to step on to the property ladder.
Who needs a hand stepping on to the property ladder?
This scheme is referred to as the ‘Lend A Hand’ scheme and first-time buyers will be able to borrow up to the value of £500,000 with no need for a deposit. Most lenders are looking for at least a 5% deposit when it comes to first-time buyers, so this will grab a lot of attention in the market place.
Barclays offer a similar deal in the mortgage market, which they call the “family springboard” deal but the Lloyds offer looks set to undercut the Barclays offer. Lloyds have claimed they are making a £30 billion commitment in supporting first-time buyers, but not everyone will welcome the new deal.
Getting help from a family member can make all the difference
This is because it is only open to first-time buyers who have a family member willing to provide them with sizable financial support. If a family member is able to offer 10% of the value of the home and place this into a savings account with Lloyds, the 100% mortgage will be made available. An interest rate of 2.5% will be placed on to the sum, which Lloyds states is a market-leading level of interest.
Vim Maru is the Group Director of Lloyds Banking Group and he said; “We are committed to lending £30bn to first-time buyers by 2020 as part of our pledge to help people and communities across Britain prosper – and ‘Lend a Hand’ is one of the ways we will do this. At the heart of this market-leading product is helping to address the biggest challenge first-time buyers face getting on to the property ladder while rewarding loyal customers in a low-rate environment.”
In figures provided by Lloyds, the average first-time buyer deposit in London is £110,182 and for the rests of the country, this figure is £33,211. Therefore, it is vital that first-time buyers receive as much support as possible and even though this scheme will not be available to everyone, it will hopefully help enough buyers to impact on the market.
Anyone looking to make a move in 2019, or who wants to stay in touch with the property market will find that we can help. At Oaks Estate Agents, we aim to provide you with as much support and guidance as we can in and around Streatham.