Compared to 1 year ago first time buyers are now £804 better of due to lower mortgage rates
Genworth’s Moneyfacts LTV tracker has found that first times buyers who purchase a typical £154,599 home with 10% desposit are £804 better of per year due to lower mortgage rates.
Simon Crone, Genworth vice president – mortgage insurance Europe, said: “Competitive rates available for those with just 5% or 10% deposits mean they are able to make huge savings compared to what they would have paid for the same loan in previous years.
“This is important for a group who face numerous challenges to enter the property market, typically facing far higher costs than those with the parental support to gather together a larger deposit.”
This may come to an end as stricter lending criteria is introduced and help to buy scheme come to end.
Crone added: “When HTB2 finishes at the end of the year, appetite for lending to those with small deposits will decline further and many more hopeful first time buyers will be priced out unless they can secure help with a deposit.
“First time buyers are crucial to the health of the wider housing market and failure to adequately support them will have a knock-on effect to other homeowners.
“While the government has put in place a series of short-term fixes, a permanent solution is the only way to resolve the housing crisis.
“Government intervention through Help to Buy has shown mortgage insurance is effective at encouraging high LTV lending without inflating risk or reducing standards.
“The private sector can now offer a longer term solution that removes risk from the taxpayer while boosting homeownership to a wider group.”