- Types of Mortgage Explained
- Which Mortgage Type Is Right For Me?
- Mortgage Repayment Guide
- Remortgage Guide
- First Time Buyer Mortgages
- House Price Comparison
- How Much Can I Borrow
- Joint Ownership
Specialist UK Mortgages...
“The Government’s new home buying initiative only scratches the surface,”
says Moneyfacts
Julia Harris, mortgage analyst at moneyfacts.co.uk comments:
“Any initiative which encourages and helps first time buyers onto the property ladder is welcome. But this new government backed scheme seems to be a half-hearted approach to solving the much ‘bigger’ problem of home ownership.
“As with any shared ownership scheme, the complexities may put borrowers off, and with the target audience of this scheme already a niche market, we wonder how many first time buyers will truly benefit. Surely by assisting only a fraction of first time buyers facing affordability problems, for those excluded from this scheme the problem only worsens, with increased demand, however small, stimulating further prices rises.
“With only four lenders participating in the scheme, choice is somewhat limited. Both Yorkshire BS and Nationwide offer a variable rates at 1% above bank base rate for the first five years, not uncompetitive with the current 100% deals on the market.
“For those who qualify for this scheme, it is important to remember they do have other options, and just because the scheme is designed specifically for them it does not always mean it is the only solution.
“Lenders are addressing affordability issues, with many adopting higher income multiples, more sophisticated multiples and ability-to-pay models. Should the monthly repayment amounts be the stumbling block, then why not choose interest only for the short term or use partial repayments, which can be set to a level that is affordable to the individual?
“But what we should not lose sight of is the true level of affordability; indeed many consumers are already balancing their finances on a knife edge. If property prices continue to outstrip the level of pay increases, then we are in danger of reaching a situation where a bigger slice of the UK population will be unable to get onto the housing ladder, even via non conventional mortgage options such as homebuy, interest only or 45 year term mortgages.”
NOTES TO EDITORS:
Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.
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