Unless you are born lucky or have been incredibly lucky with playing the lottery since then, the odds are you are not in a situation financially where you are able to simply purchase a home without years of saving, plenty of smart money manoeuvring and a keen eye on the property market. It remains an ever increasingly difficult task for everyone and with the current political situation it has made the propensity for people to take a perceived risk on the ever-changing housing market even lower. This lack of activity has nudged the companies seemingly in control of the publics ability to afford housing, into action.
Recently covered in the Express, and from a recognised source of money advice Martin Lewis, one of the UK high-street banks has recently initiated a mortgage that will “help first-time buyers to purchase a property with no deposit whatsoever”. The large sum of money that a mortgage covers is crucial for the majority of first-time buyers to even consider buying a property, no matter of the location. However, with a regular mortgage, a hefty deposit is needed as “security” and to prove that you are capable of contributing to the repayment of the mortgage. Lloyds Bank have changed this.
Their new mortgage see’s them loan the complete amount for the house to the first-time buyers, on the stipulation that a relative of the buyers agrees to move an amount equal to 10% of the mortgage into a fixed-rate savings account with Lloyds.
The fixed rate of 2.5% on the savings account remains in place for three years and during that time the savings cannot be removed for the account. The family member isn’t giving any money away, merely moving it to a different account. The mortgage rate will be 2.99 per cent for three years.
Despite this mortgage being capped at £500,000, those in all sectors of the market are happy to see this attempt at increasing home-ownership take its first steps in the market. A spokesman for a Mayfair estate agent comments, “With the majority of purchases, no matter how big or small, there is a large chain that usually has a property that would be perfect for a first-time buyer at one end. Increasing the chances for these first-time buyers to get into the market is welcome news”
Great innovative work from Banks such as Lloyds have found new ways for those currently ‘whilting away’ money on renting to be able to pump their earnings into something that works for both the banks and the public. This can’t be said for the housing providers however, as while others struggle to get a deposit, the bosses of large home providers, even when attempting to buy their own companies housing, still benefit from ridiculous discounts that others wouldn’t even get close to.
In a story about Taylor Wimpey CEO Pete Redfern and his attempt to buy one of his company’s newly built luxury Palace View apartments. Redfern, used his position to take a staff discount of 5%, up to £100,000 but “subsidised” his purchase even further with an internal audit taking of a poor performing London Market, which cut an extra £336,000 off the price of the flat.
Although it still remained way out of reach of many and would have cost £2.04 million (originally £2.5 million) it is more the approach of the Chief executive, who will know better than most about the problems the majority of the public are having in purchasing property, that has riled people up and down the country. With the average first-time buyer having to spend his “discount” on their new home, it has the begging the question as to why they should be stumping up this amount in the first place.
It seems that on the face of it, there are new propositions being put in place to increase buyer activity in new build homes, but that the home builders themselves aren’t following the edicts put in place by the government and their own companies.