This past year has felt a bit like going back in time with Covid 19 and lockdown. The property market was in danger of imploding but the stamp duty holiday and furlough scheme, arguably, saved it.
If you’re old enough to remember the heady days of the 1980s, you’ll know that back then property prices were low and mortgage borrowing rules were relaxed. You could buy a terraced house in 1986 in certain parts of Leeds for say £20,000 and only have to scrape together a 5% deposit of about £1000 (admittedly 2 to 4 months’ salary back then).
Your mortgage was invariably an endowment type, another financial footnote in history, and your repayments were probably little more than £120 per month.
Property prices have risen inexorably though since those days when we all sported mullets and moustaches.
What’s more, as they’ve accelerated, mortgage lending criteria has tightened. 95% or 100% mortgages have not been available for years – until now.
The Chancellor and MP for Richmond, just up the A1 from us, announced new products for the mortgage market. Rishi Sunak brought back 95% mortgages, a stamp duty holiday and this has been a timely boost for property nationally.
Interest rates are at historic lows too, so the cost of borrowing, coupled with lower deposits, means home ownership is now more of a possibility for those in their 20s, 30s and 40s.
The Help to Buy scheme has been a real success, with the builder of new homes investing 20% into the cost, leaving just a 5% deposit on a 75% loan. It was limited though to new builds and they carry a price premium and are in short supply in Leeds and elsewhere.
At Hogan’s, the return of 95% mortgages is welcome. With so many of us choosing or being forced to work from home, it’s good to see a financial helping hand for home ownership.
It’s fantastic too to see that many financial institutions are not levying large fees on 95% mortgages – indeed the Leeds Building Society has gone further.
It has added a 95% LTV (loan to value) mortgage to its product range, increasing choice for first time buyers.
The Society has launched the fee-free five year mortgage at a fixed rate of 4.30% with a free standard valuation.
Matt Bartle, Head of Product and Pricing at Leeds Building Society, said:
We’re constantly refining and enhancing our mortgage products and criteria to achieve our aim of helping people have the home they want.
We work hard to offer a wide range of products that meet the needs of those who are often underserved by the wider market.
“This latest deal will assist homebuyers with smaller deposits, suiting people looking to take the first step onto the property ladder. It also complements our suite of products, which includes Help to Buy and Shared Ownership mortgages and an existing two year 95% LTV product.
Fixed rates remain the most popular choice and a longer-term deal for five years enables borrowers to plan their future outgoings.
If you need any advice on buying, selling, letting, investing across West Yorkshire, contact our team today.
