On the flip side, homeownership aspirations do not appear to have faded and the need to move for personal, family, employment or school catchment reasons are still evident for many homeowners. While fear of redundancy in a recession is holding the property market stagnant in some places, many buyers are looking to taking advantage of low purchase prices.
Which leads to the question - how can we mobilise more first and second-time buyers?
Average interest rates at 75% LTV have continued to fall, with 2 year rates down to 1.56%, whereas there has been an increase for 95% LTV borrowers up from 2.95% to 2.97%, according to Bank of England figures. The rate differential has therefore edged up to 1.41% from 1.3% in Q2. This was described as a ‘double-whammy’ for low-deposit borrowers who appear to have been hit far more by the withdrawal of a number of lenders during the course of 2019 than others.
A greater variety of lenders need to be active at the higher loan to value bands – within responsible lending boundaries – in order to generate more options for buyers, especially for those who may sit just outside the strict lending boundaries of high street or mainstream lenders. Maximum loan sizes are also an issue for those higher up the property ladder.
Thankfully, more and more specialist lenders such as Foundation Home Loans are stepping up to the plate to help borrowers who fall just shy of mainstream mortgage choices, for example by opening up their rates to 90% LTV. So, if you would to know more about how we can better support your homebuyer clients who might not quite fit mainstream lending requirements, then why not contact us today to find out more.