It seems the property market is finally beginning the slow recovery that financially strapped first-time buyers have been waiting for. The final quarter of 2011 has seen the launch of a few deals only requiring 10% deposits, and at rates that won’t leave you in penury. Figures from the Council of Mortgages show that first-time buyer activity reached a 10 month high in July, with falling house prices precipitating a return to wider product choice.
Among the healthier-looking deals out there is from the Post Office, which has reduced the cost of its three-year fixed rate mortgage from 5.99% to 4.75%. Although the deal comes with nearly a grand’s worth of arrangement fees, its open to buyers who have only a 10% deposit to put down.
Equally, Northern Rock launched their clutch of mortgages designed for the ten-percenters, with a two-year fixed rate of 4.95% and a mere 99 pound arrangement fee. They’re also offering a five-year fixed rate of 5.85%, which comes with a 1094 pound arrangement fee, and 500 pounds cashback on completion of the deal.
Santander is also joining the rush to help first time buyers. Up to 90% of the property value is offered and, even better, a free valuation on any property worth up to 2.5 million pounds and 250 pounds cashback when you move in. Their two year fixed rate of 3.99% is one of the best out there, with an overall cost of 4.4% APR. With a maximum loan size of over half a million, Santander provides more choice for a wider range of first time buyers – click the link to see more on Santander mortgages.
Naturally, the best mortgage rates are still open to those with the biggest deposits to put down. ING Direct offer a low two-year fixed rate of 2.49% for buyers putting a 40% deposit down, while the Woolwich will give you the same two years at 2.58% for a 30% deposit.
Saving for a deposit is an ever-more daunting task. In 1990, the average housing deposit was less than 7000 pounds. It’s now more like 70,000. Combined with increasing house prices and a decreased willingness to lend in recent years, it’s little wonder that first time buyers are getting older, with more people struggling to get on the ladder at all. Let’s hope the changing fortunes of the property market continue to alleviate the burden on young buyers.