Return of 95% mortgages for new homes
Published ¤ 14/12/2011 10:56:42
With the announcement of a new Government backed scheme, 95% mortgages are due to return again for most new home buyers.
As part of the Government's national housing strategy, David Cameron announced the reurn of 95% mortgages for buyers of new homes. The new year will see creditworthy local homebuyers offered the best chance since the start of the credit crunch to buy a new home, without requiring a 20% (or more) deposit, as at present.
Katie Yates, Sales Manager at Barratt Homes (West Midlands), said "Even though house prices have fallen since 2007, not everyone has been able to take advantage because of the hefty deposits which lenders have been demanding ever since the credit crunch began.
"Now the banks have agreed to start lending again on new build homes at 95 per cent loan to value, so homebuyers will only need a deposit of five per cent. In practice that means that you could buy a home from Barratt Homes with a deposit of just £7,263.
"Make no mistake - this is a game changing moment for creditworthy buyers who have been understandably frustrated for years about not owning a home of their own. Anyone who doesn't have much equity in their current home but needs to take their next step on the housing ladder also stands to benefit."
The 95 per cent mortgages will be on offer from all the leading lenders in the New Year, are expected to be priced at competitive rates and should not involve any more complications than getting a normal mortgage.
The product is specifically designed for new build homes.
Paul Skinner, from leading mortgage broker, PKS, said "This is great news for anyone looking to buy a brand new home, but particularly for first time buyers. At present, most lenders restrict lending on new build homes, typically to 80% of the purchase price. This new strategy will make it a lot easier for many more people to get their foot on the housing ladder, and for people to upgrade to a new home.
"With many house builders also offering other incentives such as paying the stamp duty, or paying legal fees, this could be a much needed boost to the housing market, especially as the stamp duty relief for first time buyers is to be scrapped in March 2012."
PKS provide "truly" independent mortgage and insurance advice, and can ensure that you get the very best advice possible. If you are considering buying a newly built home, then call PKS on 0845 226 5009, or click here to send us a message.
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