Homebuyers with deposits as low as 5% will now find more deals available after the launch of a government guaranteed mortgage program.
The initiative, which was announced during the budget and aims to enable more people to buy their own homes, was launched as industry data suggested that separate government support for the market was driving asking prices to record highs.
The Rightmove Property website stated that the extension of the COVID-19[female[feminine crisis stamp holiday had pushed the average home price from almost £ 6,733 to £ 327,797 in April as buyers scrambled to take advantage of the tax break.
The mortgage program, which mirrors Help to Buy put in place in 2013, was launched in response to a shortage of low deposit transactions in the market, with lenders worried about the pandemic’s effect on personal finances.
According to financial news site Moneyfacts, there were just five deals for borrowers with a 5% deposit available in March – up from more than 160 before the crisis began.
It had 34 in April, but its numbers suggested there were cheaper options for mortgage customers who could afford a 10% down payment.
The new program aims to help first-time buyers or current homeowners secure a mortgage with just a 5% down payment to buy a home up to £ 600,000.
It works by providing lenders with the collateral they need to provide mortgages that cover the remaining 95%, subject to the usual affordability checks.
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This notice was published: 2021-04-19 06:40:00