It is fair to say that buying your first home and stepping on to the property ladder can be difficult. Buying a home is very expensive and the size of deposit required to obtain a mortgage means many first-time buyers struggle to get involved with the market. This is bad news for buyers but it also bad news for vendors.
If the number of potential buyers in the market is limited, it is harder for vendors to sell. Even though many people view buyers and vendors as being adversaries in the property market, there are times when good news for one party is also good news for the other. In this regard, anything which helps more property buyers step on to the property ladder will also be great news for people looking to sell their home.
First-time buyers need more mortgage options
Therefore, the fact that Lloyds has unveiled a 100% mortgage for first-time buyers should be considered as positive news in the market place. As you would expect, there are terms and conditions associated with this mortgage, so it isn’t freely available for all buyers, but it should help more likely buyers arrange funding to buy a home.
This scheme is the Lend a Hand scheme and it is set to provide support and assistance for buyers looking to borrow up to £500,000 without a deposit. There is a similar offering in the market with Barclays operating a “family springboard deal” but Lloyds claim to undercut this offer. Lloyds has also stated they are offering a £30bn commitment to help first-time buyers but not everyone is happy with the deal.
Family members can help first-time buyers step on the property ladder
This is because to be eligible for the mortgage, the borrower has to have a family member who will place a sum that is 10% of the value of the property into a Lloyds saving account. Many first-time buyers are not in a position where a family member can support them in this manner, which means that many people will not be able to access this welcoming deal.
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.”
Lloyds state that the average size of deposit for first-time buyers outside of London stands at £33,211. This is a lot of money and of course, there are also many other costs which have to be dealt with at the time of buying a house. Purchasing property is expensive so it is important that first-time buyers feel as though there is plenty of support and assistance available to them.
No matter what your property plans are in 2019, you need support from a local expert who has experience in the market. Call on Bond Oxborough Phillips and we will do everything we can to help you move.