Today sees the first government backed, 95% mortgages become available to prospective homeowners.
With interest rates as low as 3.98%, offered by Coventry Building Society, homebuyers have been given a timely mortgage boost for homes under £500,000 but will be restricted to 4.49 time their annual income and must have clean credit records.
Currently, new-build properties and flats are not part of the schemes remit but as more competition enters the lending market, it is expected that all homes will qualify and the price ceiling will increase to the Government’s £600,000 backing.
Richard Beresford, chief executive of the National Federation of Builders (NFB), said: “With Help to Buy now closed for non-first time buyers, the 95% mortgage will help millions of families out there who may not be able to access mortgage lending but need to move to bigger, more appropriate home.”
However, we would be remiss to not remind the Government that we have been here before and demand side support without supply side measures only heats up the housing market. The ‘planning for the future’ whitepaper needs to be turned into a bill as soon as possible, otherwise, demand will continue to outstrip supply and housing will become even more unaffordable. If it needs short term supply solutions, the NFB is ready with a stack of deliverable recommendations.”