The number of buyers in the UK housing market has risen three months in a roll, as lower prices boost interest, according to figures from the Royal Institution of Chartered Surveyors (RICS). But it said first-time buyers were still largely frozen out of the market, as lenders demand high deposits. Existing homeowners are the main source of the increased interest, as well as investors.
Posts Tagged ‘First-time buyers’
Buy enquiries still on the rise
Wednesday, February 18th, 2009Nationwide increases minimum deposit to 10%
Monday, April 28th, 2008
Nationwide Building Society is today reducing its maximum loan to value ratio (LTV) to 90% on all of its products for new borrowers except its three-year fixed rate and three-year tracker mortgages. New borrowers will need at least 10% deposit on all their products except the two mentioned above. New customers wanting to take out the group’s standard variable deal, which it calls its base mortgage rate, will now need a deposit of at least 25%, while the maximum amount the group will lend on any of its mortgages to new borrowers will be capped at £500,000. The two remaining products that Nationwide is offering to people with a small deposit are only available by going direct to the lender and cannot be obtained through brokers. Nationwide described the move, which takes effect from May 1, as part of its ‘ongoing approach of managing the business in a prudent and sustainable way’.
Mortgage criteria getting tighter
Sunday, March 23rd, 2008Several small building societies have been restricting or halting lending as a result of the financial turmoil. With lenders’ funds drying up, higher deposits are being demanded from first-time buyers. The Co-operative Bank now demands a higher deposit by cutting its maximum loan-to-value ratio from 95% to 90%. Bigger lenders, such as the Halifax and the Woolwich, have slightly increased the interest rates on certain tracker or fixed-rate deals, while making other deals available only to those able to put down a 40% deposit. The Cheltenham & Gloucester, part of Lloyds TSB, has also raised the interest rate charged on some deals. More than a million fixed-rate deals, typically lasting for two years, are due to expire in 2008, which will add to demand. As a result, the smaller building societies are withdrawing deals instead of being swamped by demand. Those wishing to move house are being told to act fast on mortgage deals as lenders are changing their deals frequently, sometimes several times a week.
Homebuyers with no deposit are finding it tough
Thursday, March 6th, 2008Borrowers with bad debts are getting better mortgage deals than first-time buyers without a deposit. The cheapest deal for a first-time buyer with good credit history but without a deposit is with Bradford & Bingley - 6.89% with £999 fee. But a sub-prime borrower with missed mortgage repayments (in the past year, one of which is in the last six months), could get a rate of 6.69% with a £995 fee with Chelsea BS. However, those with a 25% deposit could get a rate of 4.75% from First Direct with a £1,498 fee. A year ago, 27 banks and building societies offered 100% mortgages compared with just 11 today at much higher rates. As the credit crunch hits banks and building societies, first-time buyers have been left out in the cold.
Nationwide deposits up to 25%
Monday, February 25th, 2008Nationwide increased the minimum deposit required to secure its best rates from 10% of the value of the property to 25%. With the average price of a London house now more than £300,000, buyers will have to raise at least £75,000 up front. It is a major blow for first-time buyers in particular. The clampdown by Nationwide comes as banks and building societies tighten lending conditions following the credit crunch. Until today, borrowers needed only to raise a deposit of 10% or more to take advantage of Nationwide’s best rates. They now need 25% or more - or face an extra 0.2% of interest. The rise only affects new borrowers and wipes out the benefit they would have enjoyed following this month’s cut in interest rates by the Bank of England. Nervous rival lenders are set to follow suit as they chase margins rather than market share.
Government rakes in £31bn in stamp duty
Thursday, February 21st, 2008Homebuyers have forked out £31.5bn in stamp duty over the past ten years. Last year alone, the figure reached £6.5bn - a staggering 675% increase since Labour came to power. In 1997-1998, just £830m in stamp duty was paid. Increases introduced by Gordon Brown when he was Chancellor, which were widely criticised at the time, are forcing record numbers of homebuyers to pay stamp duty. Before Labour came to power, the tax was charged at just one per cent on all properties sold for £60,000 or more. Today, it is charged at 1% on houses costing between £125,000 and £250,000, 3% on those worth from £250,000 to £500,000 and 4% for those sold for more than £500,000. In London, the average asking price for a home is £402,000, which would mean stamp duty of more than £12,000. The majority of first-time buyers are now forced to pay the tax, which - coupled with the recent property boom - makes finding enough money to buy a home even harder.
