New rates and mortgage criteria for first time buyers

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Skipton Building Society has revealed this week that it will now remove its current maximum loan size cap of £500,000 for first time buyers completely, in order to greater support those currently struggling to meet lender affordability criteria. This especially applies to the London and Southern housing markets, where house price rises are continuing to increase at an exponential rate, and many first time buyers are left with good jobs and deposits, yet are struggling to secure a mortgage.

The average monthly rent payments for London is currently estimated at £1,500, therefore by removing the maximum loan size cap, Skipton hopes to enable many more onto the housing ladder. This became a more notifiable issue since figures showed UK house prices increased by 20% between 2011 and 2015, whereas London prices increased by 53% across the same period.

In line with this, Leeds Building Society has also refreshed its Help to Buy equity mortgage and added two new 2 year fixed rates. The new products are now available at a rate of 1.69% with a £999 fee or 2.1% with a £199 fee. Each of these offers is now available up to 75% loan to value and includes free standard valuation. Suitable for both home purchase and remortgage, these new rates follow the lender’s range of Help to Buy mortgages since first joining the scheme in 2013.

Although many lenders have been making more effort to support buyers first stepping into the market, however, older borrowers have still witnessed the greatest rate cuts over the past few months, with the average lifetime mortgage rate for those between 85 and 89 having fallen to 5.48%, from 6.7% in 2009.

Lifetime Mortgages have remained below 6% for the second year running, according to Age Partnership, where 2015 also saw the average lifetime mortgage rate fall from 5.73% to 5.48% for the same age group, compared to slight increases seen in other age groups.