Move now with a 95% mortgage

April 22, 2021

This a fantastic time to get on the property ladder, with the availability of 95% mortgages now vastly increased.

If you are considering buying your first home, living away from your parents or leaving rental accommodation, now is the time to make your move.

Whilst the end of the current ‘stamp duty holiday' looms large for the majority of buyers and sellers come the 31st June, last week’s announcement that the Government has stepped in to underpin lenders providing 95% mortgages can only be good news for anyone looking to buy a home up to the limit set at £600,000.

Banks and Building Societies are widely offering 95% mortgages, meaning you only have to find a deposit for 5% of the value of your desired property.

The scheme has been made possible by Government assurance to lenders, by which the Government guarantees the loan for up to 15%.

People from a variety of backgrounds can benefit from the scheme, which covers properties of up to £600,000 in value. Essentially it is available, but not limited to, first-time buyers, with applicants being eligible as long as they are not purchasing a buy-to-let or a second dwelling.

Without a doubt, as the average house price has risen since we came out of the first lockdown last year, first-time buyers, in particular, have seen the size of deposit required increase accordingly, as the most competitive and attractive mortgage deals required at least a 20% deposit.

So, with the introduction of these larger loan to value deals, I firmly believe that we will see a further increase in demand, particularly from those buyers who are keen to take the first step onto the property ladder in the coming months, as for first-time buyers stamp duty will continue to only apply to purchases in excess of £250,000 until the 30th September, and then the exemption will drop to purchases of less than £125,000, of which, unfortunately, there are very few in the local area.

Of course, this further increase in demand could lead to further increases in property prices, but, as the residential housing market has always been led by a balance of supply and demand, those buyers that have ensured they have their finances, including their deposit, will be those that appeal to the majority of sellers, as a more proceedable option.

As there are currently a great number of properties on the market locally to choose from, ranging from old to modern and indeed brand new, one exciting development, in particular, Fleet Mill, will receive great interest. With current prices and availability, a one-bedroom apartment can be purchased with a deposit starting from £10,000, either based on a 95% mortgage or the current Help to Buy scheme.

If you are one of the many people who will be planning their purchase or the sale of a property in the coming months, please feel free to contact your local Mackenzie Smith branch, where any one of my colleagues will be happy to offer you our advice and recommendations or put you in touch directly with our partners who can provide independent mortgage advice.

For further information or advice, please contact your local branch.

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