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We suspected that help was on the way for first time buyers, but didn’t think that this deal would be available so soon.
First time buyers can benefit from a new ‘fee free’ deal with Yorkshire Building Society. All that is required…..a £5,000 deposit. This deal is available directly to customers via Accord Mortgages, and is available in Scotland, England and Wales.
But there is a catch! This option is not available for either new build properties or indeed flats. This deal will mean that whilst normal first time buyers might opt for a 1 or 2 bedroom flat, they might now be looking at 2-3 bedroom older style houses, so the demand for these types of properties will increase.
What is incredible is that your £5,000 can secure a deposit for a property valued right up to £500,000! Quite a brave and bold move from this Building Society with this offering. Early impressions on the deal suggest that there might be some ‘affordability’ issues and the limitations to qualify as a borrower are quite tight.
Any first time buyers taking this deal would be wise to ‘overpay’ their mortgage to try and reach a lower loan-to-value (LTV) bracket, so that when it comes to remortgaging, it will be easier to obtain a remortgage deal.
Your deposit of £5,000 on a £200K property would equal 2.5% of the purchase price. So the remaining 97.5% becomes what you are borrowing as a mortgage. The deal at the current time is based on a 5 year fixed rate of 5.99%, the maximum borrowing age at the end of the term is 70.
A recent article from Home Truths suggested that the UK is in danger of becoming a nation of ‘renters’ and Yorkshire Building Society have made this bold move to prove them wrong. Let’s see if the other lenders will be bold enough to make a move!
It is suggested this new deal is to try and provide the opportunity for first time buyers who might not have any parental or family support to try and get on to the property market. Previous research suggests that around 2 in 5 first time buyers (38%) require financial assistance from friends and family to make the jump on to the property ladder.
Your other option is to consider Asset backed investment with Murray Property Holdings, a low risk investment and the perfect way to make your cash work for you without any expensive setup costs – find out more from our team today.
*Always seek advice from an independent financial advisor before making any investment decision
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Email: info@murraypropertyholdings.co.uk
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