100% Mortgages Are Back – Good For Buyers and Vendors?
26th February 2019 posted in Sellers Buyers
Anyone selling their home should try to find some time to consider what is happening to buyers in the market. It is understandable that vendors will focus on their own needs and aims, but a vendor cannot sell their home if there are no willing buyers. Buyers and vendors are connected in the property market and good news for one party can also be good news for other people.
An example of this comes with the news that Lloyds is introducing a new 100% mortgage for first-time buyers. As will be discussed, this mortgage isn’t going to be available for every buyer, so it may not have a massive impact on the property market. However, anything which makes the process of obtaining a mortgage easier for some willing buyers is of benefit. When there are more willing buyers, there is a greater chance for vendors to sell their home.
Anything which leads to more homes supplied to the market is of benefit
In turn, this may persuade some vendors who have previously held off from selling their home to enter the market. It could be that an increase in the number of willing buyers in the property market leads to a greater supply of homes in the market. Given that a shortage in the supply of homes has been cited as one of the leading issues in the property market in recent times, making it easier to obtain a mortgage could have a bigger impact on property transactions than merely helping buyers directly.
If you are looking to sell your home, it is likely that you have a lot of things to contend with. It is perfectly natural for vendors to focus on their needs and circumstances, but if you can consider the entire market, you will be able to make better-informed decisions. There is a lot to be said for vendors considering the needs of buyers and what is happening in their part of the market. This is why the return of 100% mortgages for first-time buyers could be great news for some vendors.
The scheme is called the ‘Lend A Hand’ scheme by Lloyds and it will provide buyers with the chance to borrow up to £500,000 with no deposit. The issue that may prevent many buyers from obtaining this mortgage is that Lloyds require a family member to place a sum of money equivalent to 10% of the property price into a Lloyds saving account.
Will other lenders follow suit?
If a first-time buyer is fortunate enough to have a family member willing to support them in this manner, it is positive news. However, those who aren’t in this position may be unhappy at the way they are being prevented from obtaining a 100% mortgage. Given that Lloyds is deemed to be the largest mortgage provider in the country, other firms could follow suit. It is likely that all mortgage lenders will attach notable terms and conditions to any 100% mortgage they offer, but there could be opportunities for more people to find their way on to the property ladder in the future.
Whatever move you wish to make in the local property market, make sure you obtain support and guidance from the leading local experts. At Hunters Forest Hill, we look forward to assisting you, so get in touch.