More affordable housing needed
The recent surge in small deposit mortgage deals for first-time buyers is good news for purchasers, especially first-time buyers but more affordable housing is still needed.
Recently released data from Moneyfacts shows that the number of 95% loan-to-value (LTV) mortgage deals has increased four-fold since June 2012, with 288 95% LTV deals on the market this month, up from 251 this time last year and quadruple the 63 deals five years ago.
What’s more the rates are also becoming more competitive with the average five-year fix in this category standing at 4.57%, down from 4.63% this time last year.
Government support has helped to ensure that the first-time buyer mortgage market has gone from strength-to-strength.
“Prospective buyers today have so many more cost-effective mortgage options available, potentially making their dream of owning their first home much more achievable,” said Rachel Springall, finance expert at Moneyfacts.
The latest mortgage market monitor produced by e.surv supports Moneyfacts’ findings and shows that small deposit borrowers now make up over one-fifth of the mortgage market.
However, Sexton believes that that low rates do not offer a solution for those struggling to save for deposits, especially in light of rising house prices.
He added: “More affordable housing needs to be built in order to balance supply and demand. In turn this will bring down prices and help regain movement in the home buying market.
“With Monday’s announcement of a new coalition government in place, we hope our country’s housing issue will become a priority on their agenda.”